Dear Martin
I acknowledge receipt of yours of 24th August. I note that I can't expect a reply to this but send it in case it is of interest.
We seem to be in quite a stalemate where more radical action is called for.
So we are expecting to write to all 36 owners of flats later this week along the following lines (it will vary according to the different background of each owner).
The logic for this is contained in this draft which I hope you will see makes sense.
Nick
To the 36 owners of leases at Prince's Park, Talacre
"We are writing to you as the Land Registry tells us that you own a flat in the "Princes Park" development next to the Talacre Sports Centre and Talacre Town Green. I was probably in contact with you when you originally bought your flat in 2013 - either directly or through your solicitor (xxx) or both.
You may be aware that many local people who have followed this development have campaigned on several issues, the most important of which relate to the full implementation of the s106 agreement and to the payment of "Overage".
What follows concerns Overage and how we believe it affects everyone holding a private ie125 or 999 year lease being the 30 with 125 years leases which have about 117 years to run and 6 with 999 leases. The Overage obligation is in the Land Sale agreements referred to in my penultimate para.
This is our legal advice-
"These documents like the Land Sale Agreements are binding on successors in title which will include future purchasers of the freehold land and leaseholders of the flats. So, all persons who own Talacre whether freehold or leasehold are subject to these agreements.".
We are not in a position to state with certainty what impact this would have for a leaseholder such as yourself, but would expect that for Overage, the freeholder would be primarily responsible and if the Council failed to collect from the freeholder, it would be the leaseholders who would be called upon to pay.
Following much correspondence with Camden, they have stated that an amount of Overage is due. My own estimation is £3.9m or more. Camden say it is substantial but less. The amount should be determined by agreement between the freeholder and Camden or as seems more likely, in the absence of that, the appointment by Camden of a defined "Expert", Camden has told us that due to a weakness in the drafting of the relevant documents, they are experiencing difficulties in collecting. This should mean that, until that is resolved, this debt will hang over all future transactions including, for example, sales of leases or the operation of the Right to Buy legislation.
I don't of course know the extent to which you were made aware of these (incl the s106) obligations by the seller, his solicitors or your solicitor. I can elaborate on that to some extent if you contact me as I made contact when leases were first sold with many of the solicitors and estate agents.
We hope you will bring pressure to bear on the freeholder so that this situation will not hang over your property.
If you are wondering why local people are interested (perhaps disgusted is a better word), the land that the flats were built on was estimated to be worth £651,000 in 2007 and because of the "overage" ie share of profits arrangement, only half (£325,500) was payable and paid. The estimated selling price of the private flats was shown as £8,819,500. We were not as upset as otherwise at the manifest underestimation, as we knew that the overage clause would provide the Camden tax-payer with a share in any excess as defined. The flats were actually sold for £20,757,590 - rather more than the £8,819,500 estimated. Hence my estimation of Camden's share of excess profits being £3.9m.
A certain amount of information can be found on this website which is being written–
https://sites.google.com/view/talacrefacts/talacre facts-2020-update
It includes many relevant pages incl for the Land Sale agreements, the calculation of overage due, local press coverage and more.
If you have any questions or comments, do contact me (in confidence if you prefer) .
Yours sincerely, Nick Harding"
Dear Nick
We have had further internal discussions about this matter and can confirm that there is nothing else to add to the information that has been provided to you already.
I am sorry that this is not what you expected but we are unable to continue to correspond on this matter and I cannot direct you to anyone else in the council.
Kind regards
Martin
Dear Martin, I wonder if you are able to reply to mine of 25th July, below. If not, please let me know so that I can direct my attention elsewhere..
Dear Nick
Apologies for the delay in responding to your two emails, I will discuss the matters you have raised with our legal department and get back to you.
However, as I mentioned in my email of the 13th of May, I do not see what purpose continued correspondence on this matters serves as we really need to divert our efforts and time to other numerous pressing issues.
Regards. Martin
Martin Olomofe
Head of Asset Strategy and Valuations
Telephone: 0207 974 1426
To: Martin Olomofe <Martin.Olomofe@camden.gov.uk>
Cc: Georgia Gould <Georgia.Gould@camden.gov.uk>; Phoebe Morris-Jones <Phoebe.Morris-Jones@camden.gov.uk>; Richard Olszewski <Richard.Olszewski@camden.gov.uk>; Danny Beales <Danny.Beales@camden.gov.uk>
Subject: Fwd: Unpaid Overage on Talacre project
Dear Martin
I refer to mine of 3rd June which followed up on yours of 13th May. I wonder if you are in a position to reply?
It mentions the outside advice obtained and the desirability of it and the briefing that it was derived from being made public although I realise that is not necessarily an obligation of a Council. (Incidentally, when I contacted all Inner London Boroughs to ask about their experience of Overage, at least one who had sought Counsel's opinion, forwarded it to me).
You may have seen that in my Forum piece to the CNJ of 1.7.12 I was able to refer to Camden as having employed (using their words in responses to freedom of information requests) “Independent external consultants” (6.9.16). “The assessment is being carried out with the support of external legal, technical, and professional advice” (23.10.17). “Officers – with the input of lawyers and inquiry agents – have been continuing their active efforts” (6.4.18) and “Further legal advice from external counsel” (3.2.20)". That I gleaned from the research I am carrying out to ensure this Talacrefacts website is complete as possible.
Regards, Nick
Subject: Re: Unpaid Overage on Talacre project
To: Martin Olomofe <Martin.Olomofe@camden.gov.uk>, Morris-Jones, Phoebe <Phoebe.Morris-Jones@camden.gov.uk>, Georgia Gould <Georgia.Gould@camden.gov.uk>, Beales, Danny (Councillor) <Danny.Beales@camden.gov.uk>, Richard Olszewski <Richard.Olszewski@camden.gov.uk>
Dear Martin
Thank you for yours of 13th which was welcome inasmuch as it addressed some of what came out of the zoom meeting 8 months ago. As that involved Cllrs Beales and Richard Olszewski, I am copying them in.
You refer to transparency as being something we needed to be corrected on but from my recollection and notes, the key matter to which you refer (legal charge) was not mentioned. Indeed yours of 13th was the first I had ever heard of this being a failing of the legal department, let alone one that is spoken of as being fatal. The Cllrs said something different ie “that errors and mistakes were made in the drafting of the resolution clauses which means the position now is extremely difficult if not impossible to enforce. Nobody is happy about that”.
One thing we did discuss was the advice (received by Camden I believe on two occasions from outside professionals) that overage would be difficult or impossible to collect. We requested a copy of the instructions given to these outside experts and the text of their advice. No promises were given by them but I understood that our request would be passed on. We have heard nothing further.
It seems common ground that there is a contractual obligation on the freeholder (and perhaps others?) to pay overage. The question of enforcement is the issue and will remain as such until it is settled. There should be no question, I hope Camden will agree, of releasing the obligees from that obligation. Camden also has a right to appoint an expert to determine the amount of overage, assuming the freeholder as seems likely, refuses to act jointly.
Regards, Nick
Dear Nick
Your email below has been passed onto me for a response.
I am sorry if you didn’t receive the further communications that you were expecting.
However I don’t agree the Council has failed to be transparent around the case. Our legal position has been openly disclosed in public statements and has been the subject of open debate in the press. It seems to me that public disclosure of a legal position in a public statement is an exceptionally transparent thing for any Council to do. Additionally, the matter was discussed at great length with you in your own meeting with Cllr Olszewski and Cllr Beales in October 2020.
There is very little that can be added to what Cllr Olszewski and Cllr Beales have already said to you in their meeting. Unfortunately this is not something the Council can “solve” (to use your phrase) -because of the mistakes made in 2008.
As Cllr Olszewski and Cllr Beales told you, when the land was sold in 2008, whilst the terms secured public benefit and met the legal requirement to obtain market value, a fundamental mistake was made by the lawyer who drafted the overage clause in that a charge was not registered. The fact that ownership of the site then passed through a chain of companies registered outside jurisdiction and that the Council effectively consented to this was also very unhelpful but the fundamental error was the that the lawyer dealing did not protect the overage provision through registration of the charge.
We don’t consider the amount of overage was likely to be the figure you quote but nevertheless it was still significant.
However, the essential fact is the overage was not secured in a legally enforceable way.
We can’t retrospectively change or correct the fundamental error from 2008. The officers who dealt with the Land Sale left the Council many years ago so they can’t be “held to account” for the mistakes or even be asked to explain what happened.
Furthermore, at a time of huge pressure on resources, it would be a waste of Council funds (which otherwise could be spent on services to our residents) in pursuing a legal case I am advised we will not win .
But what we can do- and are doing is -is to try to make sure the mistake in 2008 is never repeated. Overage provisions can never guarantee delivery of payment but we do regularly recover significant overage –in 2 recent cases we recovered payments of circa £1,000,000 and £2,000,000 respectively . Furthermore our practice now is to ensure overage provisions on major land sales are checked out by external lawyers.
Even though my response doesn't add to what has already been in the public domain for some time, the case has at least brought the issues around overage clauses into sharp focus –and that is why we are always so careful now in ensuring we do all we can to ensure such clauses actually deliver payment . So I hope this is helpful to you in that sense.
I also hope this is helpful to you in providing further clarification and closure of the issues. Unfortunately we can’t re-open the fundamental error made by the lawyer in 2008 in this case and recover overage on top of the market value sale price. Obviously it is a matter of regret that mistakes were made by the officers who worked for the Council in 2008 but we can’t turn back the clock 13 years. Hence it is very difficult to see what purpose would be served either for officers who are being diverted from very real and immediate priorities (including recovery of overage on other cases) or yourself in engaging in further correspondence revising the same points around the 2008 error.
Regards
Martin
--
Martin Olomofe
Head of Asset Strategy and Valuations
Telephone: 0207 974 1426
To: Gould, Georgia (Councillor) <Georgia.Gould@camden.gov.uk>
Cc: Beales, Danny (Councillor) <Danny.Beales@camden.gov.uk>; Olszewski, Richard (Councillor) <Richard.Olszewski@camden.gov.uk>
Subject: Unpaid Overage on Talacre project
Dear Cllr Georgia Gould.
I am writing again about the failure so far of Camden to collect the Overage due from the sale of the land on which the Princes Park development was built at Talacre. I estimate it to amount to over £3m which Camden has said is more than they reckon it to be. What is common ground is that an amount is owed, the buyers are claiming nothing is due and Camden are doing nothing about it.
You intervened last October by asking the two Councillors copied in here to discuss this and a Zoom meeting took place on 5th October during which they promised very shortly to write to us. In spite of follow up requests we have heard nothing further from them. The last we heard from you was on 8th January when your Executive Assistant wrote that Cllr Olszewski would respond when he returns from his recovery period. On 30th November Cllr Beales who in our discussion had been the one to say he would write, wrote “Richard is currently not working due to recovery from surgery - but I’m sure he will provide a response when he returns”.
Until now we have felt this is something that our Council should and will solve. From when the flats were sold and occupied (2014) until 2020, responses to Members Questions (from Cllr Alison Kelly see here) and FOI requests about Overage (see here), were that Camden was looking into the situation. At some point it became apparent that Camden had given up, in spite of (a) Camden agreeing that an amount is owed and (b) saying that “Any suggestion that this documentation was not drafted to professional standards is not accepted”.
I believe that the time has come for transparency. As it involves the responsibilities and reputation of other Camden Councillors, we expect now to make all or the substance of what follows, available to all Camden Councillors and others including those in and beyond Camden who have shown or are likely to show an interest.
Surely the failure of Camden to pursue a claim for overage when £millions are involved and for the two Councillors not to fulfil their promise even after 5 months is unacceptable?
Regards,
Nick
Dear Georgia
Following the Zoom meeting Brian Lake and I had with Counsellors Danny Beales and Richard Olszewski in October on the above subject and despite my subsequent follow up communications we have received none of the answers to the serious concerns about this matter. It was a common thread at our meeting that the cabinet members would "get back to us" on unanswered questions. This has not happened.
Given this I would ask you, as leader of the council, to press both these councillors and the responsible officers to deal with this long overdue investigation as a matter of urgency. We who are interested in the whole overage case will not rest until some satisfactory resolution is achieved.
Regards.
Nick
Dear Georgia Gould
Re Talacre Overage
As suggested to me, I am forwarding what I sent to Danny Beales and Richard Olszewski on Monday.
On the topic of unpaid overage on the Talacre development, there is currently considerable interest and activity (lawyers and so on), some of which of course has been reflected in the local press, but not all.
Regards
Nick
Thank you for your email. I am currently unavailable to access my emails due to personal circumstances. My inbox is not currently monitored in my absence so please contact my Member Support officer directly (Dolly Akin-Agunbiade) for any urgent enquiries requiring immediate follow-up. I will seek to provide a response to non-urgent enquiries as quickly as possible upon my return. Best wishes Cllr Richard Olszewski Cabinet Member for Finance and Transformation Ward Councillor for Fortune Green
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Dear Nick,
Richard is currently not working do to recovery from surgery - but I’m sure he will provide a response when he returns.
Best wishes,
Danny
Dear Danny and Richard
It is disappointing that we have heard nothing from you since our Zoom conversation, especially as on several occasions you said you would summarise it and address the questions we had about the precise question put to Counsel and their response
Things have of course moved on and even as I started drafting this, I have been contacted by the litigation department of a firm of solicitors instructed by leaseholders, for assistance. The discovery that Hazlewood are wishing to sell is causing a considerable stir.
There are two points I would like to make here and which I expect to give much publicity to, unless you feel I have misunderstood what has been said-
1. It has been said and I think you repeated it, that it is very complicated and documentation may have been weak. I have since found the FOIs I sent to most inner London councils in 2016. The two responses that particularly struck me can be found on a web site I am just perfecting so that facts can have as wide a circulation as possible. These were –
- From Southwark, here. They received about £33m from about 19 projects between 2004 and 2016
- From Westminster, here. They collected £3,408,000 in overage and provided the full 168 page report of a member of the RICS (see link "The Chilterns_Overage Schedule.pdf " and at the bottom of their page). It includes how they ensured it was paid (by restricting the right of the developer to permit the occupation of private flats), how the amount was calculated and much more. They also provided details of another successful instance where the developer/owner was a BVI company. On Talacre, not only did Camden have no ability to prevent the occupation of the flats but they have SO FAR failed to exercise what they did have which is the right to have an "expert" appointed.
2. By way of supporting what we said earlier, I attach some of the considerable correspondence involving Aidan Brookes and Andrew Maugham, both of whom are still with Camden [See * below for verbatim correspondence that was attached]. You said that a major problem was that all the main Council Officers who had dealt with these matters had left and It is very disturbing that you appear to have been told that. If you really were, then it calls into question the good faith of those who have spoken to you.
Finally, I beg once again for a response. One effect of the publicity, especially that surrounding the attempted sale of the development by Hazlewood, is that we are under considerable pressure to contact people far more widely such as Councillors, MPs and organisations interested in ensuring the public is protected from what appears to be manipulation of the law.
Yours sincerely
Nick
Nick Harding
Dear Danny and Richard
We refer to our zoom conversation and our expectation from what you said, of a summary and something on the topic of Counsel’s opinion(s) sought and received. We also wrote to you on 12th October in a way which we hope was helpful ,setting out some of the key issues.
We obtained some legal advice from Marshall Levine which we set out here –
Nick Harding to Marshall Levine with his response and comments shown in red font [was highlighted by him in yellow].
Talacre Overage
….. The more we can reduce the legal uncertainties, the better. I therefore thought I would set out what I see as our legal questions, including my amateur opinion, where I have one!
1. Is there a risk that the Statute of Limitations will prevent us from proceeding in the UK?
NO RISK for the foreseeable future because one or more of these apply NO RISK
(a) The debt became due according to an FOI reply on 21.8.15 which is just over 5 years ago
(b) The contract was for the sale of land, and was under seal? Therefore, the relevant period is 12 years and not 6 years? 12 YEARS
(c) Camden has claimed from Hazlemere, since the due date and therefore the start date is later that 21.8.21 or 21.8.26 I don't know
2. Does the fact that Hazlemere is a BVI registered company, (address 3rd Floor, J & C Building, P O Box 933, Road Town, Tortola), affect Camden’s ability to sue in England if an Expert were to award Camden an amount of overage? SUING IS POSSIBLE FOR CAMDEN
NO. Hazlemere has two addresses at least in this country. The Talacre residential block and Nicholas & Co of 18-22 Wigmore Street, London W1U 2RG, their solicitors. If you can’t sue someone, corporate or otherwise, because they are nationals of another country, the rule of law would hardly exist. The issue surely is enforcement. YES I AGREE
3. Enforcement. If an expert awards Camden a sum, Hazlemere fail to pay and the English court confirms it is a legal debt, enforceable in England what can stop Camden going for repossession in the same way as for example, several of the leaseholders who are foreign citizens, can be sued and have their leases forfeit if they fail in their mortgage repayments? FORFEITURE IS VERY UNLIKELY
CAMDEN would have similar rights to that of eg a lender LENDERS WILL DEFEND ANY CLAIM OR WILL TAKE OVER CLAIM- TALKING TO LENDERS IS KEY
4. What is the situation on prior charges and similar ALL CHARGES ARE WORTH INVESTIGATING
NOT a threat to Camden’s rights since Hazlemere’s lender (Santander UK PLC per recent Land Registry search) should have been aware of the content of the sale agreement when they lent. Incidentally, I contacted a number of solicitors and lenders (? I can check if it is important) warning of the onerous features of the contractual situation, albeit mainly to do with the s106 obligations which affect both freeholder and leaseholders. FIRST CHARGE TAKE PRIORITY
5. Is the project that was built, sufficiently similar to the one described in the sales contract, for an expert to be able to opine and award? YES I THINK SO
DIFFICULT. I may have Camden’s opinion around the time of contract start or completion since I was asking questions which probably included this one. But that would at best give us Camden legal dept’s view at the time which may have been wrong.
6. If the Owner/Hazlewood refuses (probably continues to refuse from what it sounds like).to co-operate in the process of appointing the Expert, can that frustrate the appointment of any Expert? YES IT WOULD BE AN OBSTACLE
NO, or if it can, Camden lawyers should be struck off as the disputes clause would clearly be totally useless. THE KEY IS TO GET CAMDEN TO TRIGGER THE EXPERT CLAUSE
7. Does the fact that the contractor, whose expenses are deductible in the overage assessment, was owned by the then owner, make any difference?
NO. Except to make the Expert perhaps more alert than otherwise to dubious claims of costs made by the owner. However, any RICS expert should be aware of the realities of such a situation whoever owned the contractor, THIS IS FOR THE EXPERT TO DECIDE AND CHOICE OF EXPERT
8. Who pays the cost of the Expert?
Surely, if Hazlemere refuse to co-operate and an amount of overage is awarded to Camden, it would be added to that amount? That doesn’t mean there isn’t a risk the Expert wouldn’t require costs to be split. THE EXPERT'S COSTS WILL NEED TO BE FUNDED IN ADVANCE
9. Counsel’s opinion is often quoted to be subject to legal privilege. Does that prevent Camden, if it so chooses from releasing it and its TOR? Or does it need permission from Counsel? If both parties are prepared for it to be released, is there anything preventing itbeing released. WE NEED TO GET IT IF WE CAN
Camden need to be urged to move forward AND DECIDE TO CLAIM ITS OVERAGE
Yours,
Brian and Nick
Dear Danny and Richard
1. Thank you for meeting us on Monday 5th. We hope our dialogue can continue, especially where there are matters of information to be exchanged.
2. We are convinced that Overage should be pursued. Not just “lessons learned” and acceptance that “We are where we are”. The argument that there is no prospect of success must seem very convenient both as a means of escape for those who contributed to the situation and for saving much officer time. But £3m give or take £1m either way, is a huge amount.
3. Re the “Convenient” feature we referred to. It is surely important for this to be scrutinized by those with no baggage. You told us many times that the documentation had been found to be so poor that pursuing enforcement of the agreement would be likely to fail. The request for legal advice from outside lawyers came from Camden officers. Camden officers must have been responsible for the “weak documentation”. Hence our request, strongly made we think you will agree! For the terms of reference given to the outside lawyers to be put in the public domain. Also, the advice which as far as one knows only needs to be treated as privileged if one party wants it to be.
4. This was the first time we heard “weak documentation” being given as the main reason for overage to be irrecoverable and came like a bolt out of the blue especially as the FOI response received as late as 16.6.20 included “Any suggestion that this documentation was not drafted to professional standards is not accepted”. In our conversation we said we would forward this to you. It is actually in Discussion Point One which referred to the difficulty officers might have in being totally objective.
5. But we hear you say that it would be irresponsible to waste money if there were absolutely no prospect of success and because of the weak documentation, there is no prospect.
6. Although one always thought that an “expert” appointed through the RICS as defined in Clause 21.4 of the Conditional Sales Contract would have quite a challenging task, that shouldn’t prevent him coming up with a decision (we are setting out some reasons in 9 below).
7. We need to repeat that the Expert is not appointed as an “Arbitrator” and Clause 21.2 specifically says that. He is appointed as an Expert. There is an important distinction. An expert as defined in the contract is required to come to a decision, having listened to the parties and if one party refuses to engage, then the expert continues to make a decision regardless – we would need to seek further legal advice to be 100% confident on that point. We sensed the suggestion is that if one party refuses to engage, a disputes clause like the one we have cannot be used. If that were the case, a party having nothing to lose from refusing to engage, would obviously follow that route. What lawyer would ever advocate such a clause if that could happen?
8. We also heard from you that if the party owing overage is from outside England and in the BVI (unclear if any country or just the BVI is relevant here), it means that it can’t be sued if an Expert identified an amount of overage being due. That is contrary to our legal advice which I set out in full in my Discussion Point 2. It is also contrary to common sense. If your next door house is not owned by a UK citizen and it causes your house to fall down, are you saying that you can’t sue him? Or perhaps you are saying you couldn’t enforce a judgement against him, but that clearly is not the case where he has immoveable property in this country, as has Hazlewood of the BVI or, in my example, your neighbour.
9. Here are what one sees as the main obstacles an Expert would need to address – none being fatal-
(a). Refusal of Hazlewood to engage. We have dealt with that earlier
(b). The scope of the project in the agreement was slightly different from its eventual scope. The First Schedule of the Contract refers to planning permission 2004/2689/P dated 23 December 2001 whereas, mainly as the access to the Sports Centre changed due to Network Rail refusing to allow Wilkin Street Mews to be used, the number and mix of flats changed and there was a new planning permission, no 2006/4187/P.
(c). The contract seemed to allow the actual cost of building to be deductible from the selling price of the flats, rather than a fixed or otherwise defined limited amount. Although Camden may have been badly advised to clause the agreement in this way, it is not unheard of and doesn’t invalidate it. Likewise, the fact that the developer (Findon) owned the building contractor would appear to make any claim made by the developer as to the cost of building harder to verify. Also, Camden’s failure to enforce any requirement that the amount of overage was established and preferably paid, before the private flats could be occupied. None of these are fatal flaws and the expert might find him or herself resorting to the same means I used when estimating the amount of overage to be £3.7m
10. Paperwork. In our meeting, you asked us if we had read the “paperwork”. We certainly have as I hope would have been evident. Unless you had in mind something in addition to the Conditional Sale Agreement. It runs to 38 pages and can be found here, on a website of mine which I think I drew your attention to. The relevant clauses are few, Overage (12 and 2nd Schedule), Disputes (21), The Development (1st Schedule) and The Development Appraisal (4th Schedule). It was those that were used in the attempt to estimate the amount of overage due, along with the achieved selling price of the private flats from the Land Registry. We would expect these to be the experts first port of call. The Supplemental Sale Agreement dated 6.7.07 here is in practice of no significant relevance to overage apart from increasing the purchase price by £5,500 (£2,750 paid). It updated the planning consent to 2006/4187/P. Did you have in mind any other “paperwork” that we could and should have seen?
11.We were surprised to hear you say that you had been told that all officers who had been involved at the relevant earlier times had left. Because of the way Camden was obstructing the public from understanding what was happening, I (Nick) kept a very sharp eye on all the aspects I was aware of and hence was convinced that it was the legal department that was the most important decision maker. That was headed by Andrew Maughan from before 2008. Under him for planning and other matters, including everything that affected Talacre, was Aiden Brookes who seemed to effectively make all the decisions. Brookes was the instructing solicitor to the Leading Counsel at the four day public enquiry 15–18.1.2008, ordered by Ken Livingston to decide whether Dalby St could be “stopped up”. I had a lot of contact with Brookes following the enquiry (which was when I got seriously involved). I can provide ample evidence of that. Here, for example, is an extract from a letter received 3.4.08-
“Dear Mr Harding
Thank you for your letter dated 11 March addressed to Andrew Maughan, Head of Legal
Services. Andrew has asked that I respond on his behalf. I shall deal with the points you raise in turn. (a) Review Mechanism for the Plans. Whilst I do not agree with you that the text in the current draft of the agreement is "inadequate" I, will explore with my clients the possibility of further wording being included in the draft Agreement making it clear that for the avoidance of doubt the results of the review mechanism may result in the Developer incurring further.….”
So how can it be that you are being told there is no one still employed by Camden? Does this failure to be told this not justify one questioning all you have been told and motives, or have we missed something?
12. You said that the sale of the land achieved market value at the time. The land surely was manifestly worth more than £300,000 to £700,000 when it had planning permission such as was given. However, the relevance now is surely that it was not of great importance as the overage clause allowed for Camden to receive half of any profit over a defined amount so if the original price was low, the overage would be that much higher. Also, you have been told that it achieved 49% affordable content. That by a long way is not the case and if you wish us to elaborate, we will.
Yours sincerely
Nick Harding and Brian Lake
Njhnw5@gmail.com and Brian@jarndyce.co.uk
Notes etc of discussion in separate confidential file'
One note made was of the following towards the end, verbatim
NIck Harding. "Can I ask. Have you formally given up or is the way still open, for Camden its interests for example, by using the disputes mechanism clause. Is that something that is under consideration".
Richard Olszewski. "Its not a formal decision. The assessment is that we tried to pursue the overage by means that are unlikely to prove successful. If something came to light to unlock it, but so far it hasn’t."
Talacre Project
Discussion points for meeting of Councillors Beales and Olszewski with Nick Harding
All the links here can also be found on this page of my Talacrefacts website. The Talacrefacts page attempts to summarise what I believe to be particularly relevant at this time and I hope that anyone looking at this can at least skim through it. A search of the single word Talacrefacts should also reach the page, provided you insist that Talacrefacts is one word!
1. Can current officers be both totally objective and loyal to the past (Councillors and officers)?
I believe there is a need to supplement what officers give councillors and the public since officers may see their job as being to support past and present colleagues by emphasising some things and ignoring others. Especially considering the FOI response of 16.6.20 that included “Any suggestion that this documentation was not drafted to professional standards is not accepted.”
2. “We are where we are”
One view I have detected is that what has happened in the past is unacceptable, but that nothing can be done about it now. That should not be so. The disputes clause is there to be applied. If the owner Hazlewood refuses to co-operate, an “expert” can still be appointed. If the expert concludes an amount is owed, Hazlewood can, if they don’t pay, be sued in England and if they then don’t pay, the property can be seized. To confirm this point, legal advice just received on 14.9.20 from Marshall Levine Associates reads-
“We have read the Conditional Sale Agreement under which Camden sold property adjoining Dalby Street on 19th April 2005 to Trac Properties Ltd.
We note from a Freedom of Information response dated 26.June.2009 that ‘The overage provisions are contained within the Conditional Agreement for Sale dated 19 April 2005’.
We are of the view that should any overage be due to Camden, the liability rests upon the existing owner regardless as to where it is domiciled. Further that should the existing owner fail to pay such overage, Camden would be able to sue in the English courts and, in the event of the defendant failing to pay any sum awarded to Camden, Camden would be entitled to take steps to recover it, including foreclosing on the property.”
The property has a value due to: income from the ground floor (currently a medical practice), its value when its lease expires, income from ground rents of the private flats and their residual value.
3. Failure to operate the disputes clause in the sale agreement
The disputes clause should allow Camden (with or without agreement from Hazlewood) to appoint a defined Expert to decide how much if any overage is owed. However, a very recent FOI has confirmed that Camden has not sought to use this clause. This is the disputes clause:
“21. Disputes
21-1 Any dispute or difference between the parties in connection with this Agreement will be referred to and settled by an impartial chartered surveyor ("the Expert") whose decision in relation to such matter is final and binding upon the parties
21.2 The Expert acts as an expert and not an arbitrator and the provisions of the Arbitration Act 1996 shall not apply to the Expert, his determination or the procedure by which he reaches his determination
21.3 The party wishing to appoint the Expert will give notice in writing to that effect to the other parties together with details of the matter which he wishes to refer to the Expert
21.4 The identity of the Expert will be agreed by the parties in writing or, failing such agreement, the Expert will be appointed by the President for the time being of the Royal Institution of Chartered Surveyors ("the President” and the Institution" respectively) on the application of any party. If the President is not for any reason available or is unable to make the appointment at the time of the application, the Expert will be appointed by the Vice President or next senior officer of the Institution then available and able to make ths appointment. Any reference to the President includes a reference to the Vice President or other officer of the Institution as appropriate. If no such officer of the Institution is available or able to make the appointment the Seller will designate an impartial chartered surveyor to be the Expert
21.5 A person can only be appointed to act as an Expert if at the time of the appointment he is not:
21.5.1 a director, office holder or employee of; or
21.5.2 directly or indirectly retained as a consultant or in any other professional capacity by; any party to this Agreement or any company or person associated with any such party.
2l-6 Within fourteen Working Days from his appointment he Expert will call the parties to a meeting at which he will give directions as to the future conduct of the matter and will from time to time give such further directions as he shall see fit, The Expert will allow the parties to make written representations and written counter-representations and will rely on his own judgement
21.7 The parties will give to the Expert such assistance as the Expert considers necessary to carry out his function
21.8 The Expert will give notice in writing of his decision to the parties within four weeks of his appointment within such extended period as the parties may agree in writing
2l-9 The costs of the reference to the Expert will be borne as he directs and failing any such direction will be shared equally between the parties. If any party pays the whole or part of the Expert's fees the other party will upon demand repay to the paying party the whole or part of any fees so paid, insofar as the Expert awards such fees against the non paying party
21.10 If the Expert ("the Original Expert"):
21.10.1 fails to determine the matter referred to him;
21.t0.2 fails to give notice of his decision within the time and in the manner provided for in this clause;
21.10-3 relinquishes or does not accept his appointment;
21.10.4 dies; or
21.10-5 it becomes apparent for any reason that he is unable to complete the duties of his appointment;
any of the parties may apply to the President for a substitute to be appointed (but not after the Original Expert has given notice of his decision to the parties in dispute).ln such event the Original Expert is no longer the Expert, the provisions of this clause apply as if the Original Expert had not been appointed and will be repeated as many times as necessary. Any reference to the Expert in this clause is deemed to include any substitute appointed pursuant to this sub-clause 21.10 “
4. Outside advice sought by Camden
The disputes clause should have enabled resolution of any disagreement over the amount of overage. However, Camden still felt the need to seek outside advice, as shown in the extracts from FOI responses copied below. Given, for example, the point made in 3 above, it would be interesting to know the questions put to these outside advisors. Furthermore, is this information and advice available to the public or councillors? Here is what FOIs have revealed (my highlights):
From FOI dated 6.9.16
“As with other overage clauses, the mechanism for payment of overage in this case is extremely complex, depending on assessment of multiple factors, many of which are commercially sensitive and that require in-depth expert analysis. The Council is currently undertaking this assessment with the aid of independent external consultants, with a view to assessing the amount (if any) of overage that may be payable
From FOI dated 23,10.17
“The current situation is still being assessed. The assessment is being carried out with the support of external legal, technical, and professional advice because of the complexities and the number of variables that need to be considered” and in response to “Also please provide me with the report of the independent external consultant who was appointed to advise on this”, this “All external advice forms part of an overall package of advice prepared by an external legal advisor and is exempt from release under the Act”.
From FOI dated 6.4.18
“The Council do not have anything definitive further to report. Officers (with the input of lawyers and inquiry agents) have been continuing their active efforts to resolve an extremely complex situation, both in terms of identifying quantum of any overage payable, and the party by which it would be payable”
From FOI dated 3.2.20
“We are in the process of obtaining further legal advice from external counsel and may be in a position to provide further clarification after receipt of that”.
From FOI dated 16.6.20
“the matter is still subject to internal review service.”.
5. Playing the system
The split between the sale of land and the access issues created huge problems, open to exploitation. See, for example, this note - which was not a public document but was found to have been sent to the inquiry inspector.
6. Impact of applying for an undeliverable scheme and capitalising on its approval
Access down Wilkin Street Mews was probably never agreed with NetWork Rail, perhaps never even discussed. Planning approval was obtained for an application which said, in effect “assuming as we expect” Wilkin Street Mews will become a one-way street, available for access to the Sports Centre. It should have said “if we can persuade NWR to convert WSM into a one way street”.
Presumably anyone can request planning permission for anything regardless of whether it is possible at the time. However, surely the planning authority, having given approval, should not then allow the approval to be used for what is in effect a different project?
7. S106 Obligations (especially marshalling)
All the above has been about the sale of the land. However, there is another matter which should be addressed, which is the officers’ failure to support the interests of the Sports Centre through the S106 agreement. This is an ongoing failure, capable of being remedied for the future.
The most high profile s106 obligation is for marshals to be on duty while the sports centre is open.
Shortly after the project was completed, the then owner/developer, Findon and its BVI subsidiary, Cornwall claimed to a Camden officer that this was not necessary.
They supported their contention with an 8 day survey of traffic. The survey was carried out by Citidwell Ltd, a subsidiary of Findon that had had its name changed from Findon Property Management Ltd. During that 8 day period, I took some video clips which are still available and which indicate that the survey did not reflect the situation.
For this to be demonstrated, please see Citidwell’s “survey” here. And compare it with video clips from my Traffic log 10th to 17th October 2014 included here (click on the yellow highlighted dates on the left of that page, especially that on 15 Wed).
So even if using the survey of an interested party were acceptable, there is some proof that it was inaccurate. Surely an extraordinary failure by the Camden officer.
Marshalling was regarded as making it acceptable to reduce access to the sports centre, the subject of the four day enquiry ordered by the Mayor of London. As a result, Camden should still be holding £1.1m cash to guarantee that the obligation would be fulfilled.
Nick Harding 20th September 2020
Dear Georgia Gould
I would be grateful if you were to put me in touch with the two councillors (Beales and Obszewski) whom I understand from the CNJ are to be briefed on this overage situation.
I live close to Talacre and throughout my career, specialized in property and project finance. Hence, I took a particular interest in this project from early on going back many years.
I have just put a summary of the situation on this web page – Talacrefacts Overage Update- which has 13 links. It contains the relevant contracts, FOI responses, recent press comment and letters and much more.
I have been in correspondence with Camden officers over many years and, possibly, no doubt you are aware that I have my differences with them as to the nature and development of the Talacre project. At this stage, as I have said, matters can make progress, in my opinion, if you were able to put me in contact with the two above mentioned councillors.
Yours sincerely
Nick
This was not asked as a formal FOI and it didn’t receive a reply with a date for response. However, I think an acknowledgement was sent.
Dear Mr Williams
I refer to your FOI response of 16.6.20 Ref. FOI 14205 (CAM2) I am reluctant to respond with a separate FOI request and hope this can be taken as a follow up to this. If that is not acceptable, please advise and I will draft a separate FOI request.
1. My FOI asked what the current situation is on the overage debt and I hoped for a response which would address (a) the amount of overage and (b) the situation on payment of it. However, the response only says “the matter is still subject to internal review service” which I don’t find meaningful. Responses for nearly 4 years have been saying “its very complicated” and that, outside advisors, enquiry agents etc have been appointed. Surely after all this time, the public is entitled to know more? The following are extracts from responses to illustrate my point.
In a response to an FOI request around 6.9.16, Camden said they were independent external consultants ie
“As with other overage clauses, the mechanism for payment of overage in this case is extremely complex, depending on assessment of multiple factors, many of which are commercially sensitive and that require in-depth expert analysis. The Council is currently undertaking this assessment with the aid of independent external consultants, with a view to assessing the amount (if any) of overage that may be payable “.
In October 2017 a request for an update was refused on grounds inter alia that responding would prejudice the Council’s ability to enforce the overage agreement (my words). Nearly three years later, the situation must have changed? In April 2018 the situation was reported to be ongoing with inquiry agents being employed. Two months later the Council wrote
“The Council have been continuing their active efforts to resolve an extremely complex situation, both in terms of identifying quantum of any overage payable, and the party by which it would be payable but this complex situation has not reached resolution”.
In April of 2019 the Council wrote
“The Council has continued to explore whether any payment of overage is due under the contract and if so from whom. However, this is not proving straightforward given the complexity of any overage documentation and the legal structures of relevant parties”.
And in September 2019
“The Council has continued to explore whether any payment of overage is due under the contract and if so from whom. However, this is not proving straightforward given the complexity of any overage documentation and the legal structures of relevant parties”.
On 3.2.20
“We are in the process of obtaining further legal advice from external counsel and may be in a position to provide further clarification after receipt of that. We recommend submitting a further request in 3 months time”.
And the latest from you to which I am responding here
“the matter is still subject to internal review service. For the record the Council does not accept your estimated figure of £3m in respect of overage owing. Section 106 agreements in relation to this development were drafted by in house lawyers with input/ clearance from Peter Harrison QC of Counsel.
Any suggestion that this documentation was not drafted to professional standards is not accepted”.
2. You have said that my estimation of the amount as £3m is not accepted.
I attach my estimate which is of £3,877,298 to show how it is made up [27.1.22 now linked]
In view of the lack of clarity in the key document, I have had to make some assumptions which I see as reasonable and make them so that the three key variables of Freehold Sale Value, increase in “Build Cost” and decrease in Interest shown can be changed if those assumptions are not seen as reasonable. In the estimate used to justify the very low value of the land sold to the developer, the assumption was made that the private flats would sell for £8,197,629. They fetched £20,757,590. That will not surprise those who recall the massive increase in house prices in the years before they were sold. Even allowing for inflation, £8m increasing over four years to £20m is huge and if the Overage agreement failed to justify over £3m “profit share” to the Council, then something is seriously wrong and whoever drafted it, needs to be called to account. Construction costs have, of course, also been increased in my computation. Please inform me if I the amounts above of £8,197,629 and £20,757,590 are incorrect as the difference is huge causing the Overage to be so considerable.
3. It is not clear to me why it is implied that Overage is always complex. I checked on several inner London Councils’ overage clauses etc and what you say was not confirmed by what I read. If you wish I can forward you the information I obtained.
In view of the lack of progress over a long period of time, I believe the situation should be more widely known and I therefore have in mind circulating what I have gleaned not only to all Councillors but also to those known to me who might be interested. I would therefore welcome your response to the above even if it is to say that you have nothing to add to what you have already said.
Regards
Nick Harding
Correspondence attached in NJH to Danny Beale and Richard Olszewski above
5.2.08
Nick Harding (NJH) to Aidan Brookes (AB)
Dear Aidan
Dalby Street Development
I refer to our telephone conversation concerning in particular the document submitted by the developer to the public inquiry on its last day which sets out current values and service charges for the flats.
This is one of the documents whose official number I was able to note. It is AP19 and runs to 13 pages. I attach two of the pages relevant to my current concern in case they are not to hand -
1. A3 schedule listing each flat with the current assumed selling price for the 36 private flats together with service charges for all 55 flats.
2. A letter dated 2.1.08 from Paramount Properties Investment 2000 Ltd of 150 West End Lane supporting the prices, service charges and ground rents shown in the schedule.
I have taken a closer look at these figures and have compared them with those of the luxury flats recently completed 100 metres east on Prince of Wales Road, called “Hampstead Gates”. The prices and service charges being asked there show the Dalby Street developer’s figures as being so different from those of the Hampstead Gates that we visited Mr Steven Oliver of Paramount who wrote the letter to check with him that there hadn’t been some typing or drafting error or some other reason for the huge discrepancy which I describe below. We also drew his attention to his reference to Dalby Street being close to Primrose Hill and he confirmed that he knew the Prince of Wales Road area well. He said that he stood by the entire contents of his letter.
You will see what I mean from the following-
Service Charges
Hampstead Gates £2 per sq ft
Dalby St private £5.47 per sq ft
Dalby St “affordable” £3.66 per sq ft
Prices ie today’s value
Hampstead Gates £530 per sq ft
Dalby St private £846 per sq ft
The Hampstead Gates flats I understand all have a parking place within the grounds and there are large communal areas. The prices shown for them come from the Internet and discussions I have held with local estate agents who have them on their books.
I attach also a spreadsheet I have written showing the developer’s figures (shaded or yellow) with sub totals, totals etc and, at the bottom, comparisons with the Hampstead Gates including how I have computed the above figures.
I think you will agree that these figures show a difference of scale and indicate that there are grounds for concern lest the public sector parties to these agreements are being invited to base their calculations on false assumptions.
Service charges for “affordable” ie SR and SO flats vary between £1,812pa for a one bedroom flat and £3,585pa for 3 bedrooms. The developers informed us at the public inquiry that the affordable flats are to share, with the private flats, in the cost of marshals who have to manage the access routes passing on either side of the flats to the Sports Centre. I don’t know if that share is included in those figures. What will definitely not be included for any of the 55 flats is the open ended potential future costs that owners would have to pay in the event of changes to the operations or structure to those affected by the access road.
This has led me to wonder why the developer should want to show such high figures and I recall that they were somehow intended to justify the £1.1m bond or bank deposit account. This was not of interest to us at the time. Then, as now, we regarded the whole scheme as having so many flaws that this topic was a distraction. If I allow myself to be drawn into the topic, I would say that £1.1m is trivial compared to the obligations involved and any business in the developer’s situation would regard £1.1m as part of its cost. The arguments put forward concerning the unlimited costs liable to be borne by the owners if the word “reasonable” means what the developer’s barrister said it did, makes the amount to be deposited have to be infinitely more.
However, I think the developer was maintaining that the amount should be low due to the expected future value of the freeholds which would secure the obligations. If the ground rent is the test of this, then, again, the amounts shown are greatly in excess of those at Hampstead Gates. In the last of the Results section of my spreadsheet, I show how I reckon that if a comparison can be made between Dalby St and Hampstead Gates, on the information available, it shows average ground rent for Dalby St as £0.9345 per sq ft and for Hampstead Gates as £0.21875 ie Dalby St being over four times more. Before any such figures are used, however, I would feel more comfortable if they were checked by someone with a closer knowledge of the situation and trade to ensure that I am not comparing chalk with cheese..
I would be happy to discuss this further and to elaborate on any of the figures. Should you find any flaws in my maths or logic, please inform me!
Finally, I must comment on a concern that Camden might feel obliged to sign a S106 agreement prior to all approvals being obtained and the Inquiry report. Presumably, the agreement with its four plans would be the one that was given to Objectors at 5.30pm on the second day of the Inquiry. It superceded an earlier one that was delivered to the Objectors the previous day and that superceded a previous one. Not only did this provide totally inadequate time for Objectors but those not registered as Objectors had no sight of them. If the changes had been small, then that might be ignored. However, they related to the most important features of this, commonly agreed to be, unique scheme.
Yours sincerely, Nick Harding
11.3.08. NEEDS FINDING
31.3.08
NJH to Michael Cox LBC cc Aidan Brookes re affordable flats, service charges etc. Of interest so below.
Dear Michael
Dalby Street Development
I refer to our telephone conversation concerning the above development and the “affordable housing” aspects of it. I hope you were able to read the email I sent you on 28th which should go some way to explain the background. I am not well versed in the topic of affordable housing, housing corporations and so on so you must forgive my ignorance.
From reading the key relevant documents, it is clear that planning permission was given for this scheme partly due to the inclusion of 19 affordable flats out of the 55 flats in the scheme. The scheme is unique in that it has turned out to be on top of the road that joins a busy public highway (Prince of Wales Road), to a busy public leisure centre (Talacre Sports Centre). To replace the road and thus to provide access to Talacre Sports Centre, a narrow road without footways, controlled by marshals is to be built. That replacement road and, on the other side of the flats, a pedestrian route, will be the responsibility of the developer, followed by the owners of the flats for all time. Marshals are required to be on duty to control the narrow road for some 14 hours a day – again, for all time. The costs of marshals and the upkeep of the access routes are a cost to the developer during the construction phase and to the owners of the 55 flats, thereafter. It is the latter aspect that is the reason for my contacting you.
The scheme received planning approval subject, amongst other things, to arrangements for access being sorted out. Accordingly access plans, to be in effect appendices to the S106 agreement, were written. It is these plans that specify obligations on the developer and later (since the obligations are in perpetuity) on future flat owners. Because the GLA who have a final say on planning approvals were dissatisfied about the consultation on the access plans, they required there to be a public inquiry – only the second time ever that the GLA has used this power.
At the public inquiry, held two months ago, it was commonly accepted that, following completion, the costs of marshals, upkeep of the access routes and any other costs resulting from the change in access arrangements would come out of the service charges paid by the flats. The developers asserted that these costs would be born by ALL the flat owners and not just the 36 private owners. In the last few hours of the inquiry, they tabled schedules (formally inquiry document AP19) which I enclose here, showing the expected service charges. The private ones are higher than the affordable ones solely we were told because the concierge service would not be paid by the affordable flats. The marshalling and access upkeep costs would be shared by all.
As you will see from the schedule, the service charges payable by the affordable flats (also, the ground rent) is extremely high.
As an objector to the scheme (being one of the many users of the sports centre and a member of the community who recognises the damage this scheme would do to it and the park it is in), I am concerned about the many flaws in the scheme and one of these flaws seems to be the use of affordable housing to obtain planning permission, when the resulting costs to the flat owners are unaffordable.
Hence my interest in establishing the rules and laws that operate in this area. I realise that the key parties at this stage are LBC, One Housing as the RSL and the Housing Corporation. What is not clear to me, is the extent to which the service charges born by “affordable” householders (and ground rent) is limited and what, if any, agreement exists to define this, either generally or specific to this scheme.
Looking through the various committee reports and section 106 agreements, I see the following references to this subject-
General Purposes (Development Control) sub com 30.9.04. Item 9 (1) and (2)
1.8. Proposal jointly submitted by CHA and TRAC
5.5 Comments from Housing Dept says CHA have secured funding allocation from the HC for the scheme. Overall affordable housing content sadly below 50% but there are additional costs associated with the scheme
Section 106 agreement dated 10.1.06 between LBC, TRAC and CHA (the RSL)
2.29 “Registered Social Landlord” defined as “means CHA or a RSL registered as such by the HC who has entered into an agreement with the Council to secure the Affordable Housing Units created as part of the Development as accommodation for people nominated by the Council through its social rented and shared ownership housing allocation schemes”
2.33 “Shared Ownership Units” defined as “the 5 Affordable Housing Units within the Development.. to be managed by a RSL who has entered into a nominations agreement in respect of the Development with the Council and shown coloured orange and hatched red on Plan 3”
2.34 “Social Rented Units” defined as “the 14 Affordable Housing Units … to be managed by a RSL who has entered into a nominations agreement in respect of the Social Rented Units with the Council and shown coloured orange on Plan 3”
4.5.2 “RSL … to ensure that the Affordable Housing Units are used, occupied and retained in perpetuity for no purpose other than for the provision of Affordable Housing of occupation by tenants at rental levels being in accordance with the prevailing Housing Corporation rental structure.”
If there is no limit to the service charge and ground rent borne by the occupiers of affordable housing or the amounts envisaged are well within what is currently acceptable, then there will be little point in my pursuing this. Perhaps you could let me know the situation both as it relates to this scheme and what the rules are.
There is a related issue that I would like to bring up now as it is connected though it may be of more interest to Aidan, to whom I am copying this. The reason that the ratio of affordable to private flats is below the target of 50%, was due to the relatively low value of flats in the area. In the report to the General Purposes (Development Control) sub-committee of 30.9.04, it was said to be £360 per sq ft. However, in AP19, the amounts shown are between £731 and £936. The latter document was tabled, in part, to justify the amount of the security provided by the developer. While recognising that there is a 40 month gap between these figures, they are totally out of scale. This should be of concern to the council, who were party to the schedule as they were joint proponents of the scheme at the public inquiry.
Yours sincerely, Nick Harding
3.4.08
Letter Aidan Brookes on behalf of Andrew Maughan to NJH
Dear Mr Harding
Thank you for your letter dated 11 March addressed to Andrew Maughan, Head of Legal Services.
Andrew has asked that I respond on his behalf. I shall deal with the points you raise in turn.
(a) Review Mechanism for the Plans.
Whilst I do not agree with you that the text in the current draft of the agreement is "inadequate" I, will explore with my clients the possibility of further wording being included in the draft Agreement making it clear that for the avoidance of doubt the results of the review mechanism may result in the Developer incurring further expenditure. I do not think there is any purpose served in including wording to the effect that no part of the park will be made available to assist the developers in fulfilling its obligations in respect of the plans there is no suggestion that this would happen in any event.
(b) Service charges on the residential units.
As discussed in our telephone conversation of 26 March the obligations on the Developer have been secured through the Section 106 which besides the usual unqualified legal obligations on the Developer contains additional safeguards (in particular the requirements regarding the bond). These arrangements have been scrutinised by officers by our own Leading Counsel and by the lnspector during the course of the Inquiry. As long as these arrangements are in place and validly entered into there is little gained by looking behind the status of the owner that provided the owner is a properly constituted company with the power to enter into t he agreement.
Etc etc
7.4.08 31.3.08 NJH to MC RESENT WITH ENCLOSURE AP19.
11.4.08
NJH to Aidan Brookes cc Andrew Maughan. Reply to his of 3.4.08. Looks important.
Dear Aidan
Dalby Street Talacre
Thank you for your letter of 3rd April on behalf of Andrew Maugham. I am copying this reply to Andrew since we see the legal issues as concerning the Council as a whole, including several departments in addition to Environment and Culture – presumably with different legal advisors for each?
Dealing with the four issues in turn, plus the one in the last paragraph of mine to Michael Cox, copied to you of 31st March.
1. Changing Land Uses. In circumstances where, by common consent, we are in uncharted waters it is imperative that all parties should be made aware of actual and potential planning hazards. Accordingly, I am reassured that you now seek to ensure that the Developer, and by implication in due course his unknown successors, are fully aware of current and potential longer term financial responsibilities. In the field of town and country planning, change is a constant factor and the experience at Talacre over the past 30 or so years shows how dynamic it has been. The Objectors consider that the Sports Centre will not be immune from the pressure for change and it is probably fair to say that the defence of public open space land will force any changes involving roads and buildings to be kept outside such cherished areas as the park
The test of the wording for the draft agreement must be whether both:
the developer and his successors (eg freeholders) understands its full implications and
it covers all circumstances where additional costs could arise in order for the Sports Centre (or indeed any successor as provider of public amenity) to operate and adapt as it would otherwise.
The best way of satisfying these criteria would be to provide some examples and test them against both (a) and (b) above. I gave some in my last letter but that was very much off the top of my head.
The flats and the reduced access to the Sports Centre are there for all time. Yet no public facility lasts unchanged for ever and one only has to look back 25 years within Camden to see a constantly changing scene – let alone 50 or 150 years. The uniqueness of the access plans was recognised at the inquiry but the long term consequences were brushed aside.
2. Service Charges. Service charges on the residential units is a related issue to 1 above. If both (a) and (b) are satisfied, then the council is in danger of being accused of colluding with the developer in the misleading of the buyers of freeholds. Who would buy a freehold in the knowledge that they could suffer unlimited costs and inconvenience so that the Council’s rights can be maintained?
3. Temporary Pedestrian Access during Phase 3 of Construction. Paragraph 13 of the Temporary Access Plan states “Pedestrian access will only be available to/from the Leisure Centre via existing routes across the park during this stage [ie Stage 3, weeks 23 to 34]. The Owner shall ensure that … marshals …shall be on duty to direct/manage traffic at all times that the Leisure Centre is open, in addition to an hour before it opens and an hour after it closes each day, during Stage 3 to ensure that pedestrians do not use the vehicular route.” The park closes at dusk eg 4pm in the winter. The Leisure Centre is open until late so there is no explanation as to how pedestrians will get to and from the Leisure Centre.
4. Housing Association involvement. I note what you say about the omission of the Housing Association from being a party to an agreement but this surely defies common sense. The RSL must be a part of the supplemental agreement just as much as they were to the “original” agreement. Whichever way they have been involved it is imperative that they fully identify with the supplemental matters. It may be that this is all covered in the agreement between the Developer and the RSL which was referred to in the schedule of prices and service charges that was tabled on the last day of the Inquiry ie AP19. I would be grateful if you could let me have a copy of that agreement since it is essential to understanding how the long term interests of the community are safeguarded.
5. Affordable Housing, Valuations etc. In mine to Michael Cox of 31st March, copied to you, I drew attention to very large differences between the figure (£360 per sq ft) provided to the Council by the Developer when he was pleading for relief from the 50% affordable housing target and the amounts of between £731 and £936 provided by him on the last day of the Inquiry, to justify a low figure for security. If I have misunderstood this, please let me know. Otherwise there would seem to be grounds for concern.
This contributes to our deep unease that the Council as “joint proponents” is party to a scheme of events where relief from affordable housing targets of 50% has been agreed and yet acknowledges a yawning gap between the estimates given at the outset and those now proposed by the Developer. How can our representatives be a party to an “anything goes” financial planning strategy? Should not the full Council be made aware of these startling disparities and be given the chance to decide whether or not they wish to remain in the role as “joint Proponents”?
It is our expectation that the Council lawyers with their unique overview of matters relating to this issue, will see fit to alert the entire Council to the desirability of examining the full implications of the Developer’s (and Council’s) plans that only emerged at the January inquiry held in public. Failure to do so would leave a huge “democratic deficit”.
Yours sincerely, Nick Harding
23.5.2008 NJH to AB, AM, DJ, Michael Cox
Dear Aidan
I rang today to check whether you were replying to mine of 11.4.08 to Andrew Maugham and yourself. Since I gathered that you are not back until next Thursday, I thought it best to set out what I was hoping to discuss.
1. The first of the matters we continuously brought up still appears to be outstanding. That is the need for clarity in the text of the S106 to ensure that the developer and later the freeholders cannot avoid the obligation to pay whatever it takes to "safeguard public amenity". It is clearly the intent and, from what we all heard the Developer's counsel say at the Public Inquiry, the Developers accepted it, that whatever is needed to ensure access for whatever is needed, will be paid for by them and later the freeholders. I gave, as best I could, examples then and later. However, the S106 text is extremely weak with the word "reasonable" an invitation to them to escape this obligation if the costs were high. You told me on the telephone that you were trying to do something about this, but we have heard nothing further. It is common ground that the scheme is unique in handing over access to a public facility to private interests FOR ETERNITY. Yet the text of the agreement setting out the obligations that go with it, is inadequate.
2. Related to the above, though not in my letter, are
(a) The £1.1m which as you know we think bears no relation to the amounts in question, would be used up within a few weeks of delay in stage 3 of construction. Is there an obligation to top it up if and when drawn on for whatever reason? And if so, what security exists to ensure that happens (this would normally be a bond but since the developer is not a household name and the obligation is long lasting, they might have a problem raising one).
(b) There is no mention of a parent company guarantee so the council is relying upon this £1.1m and the signature of what are likely to be shell companies. Or will Findon Urban Lofts plc guarantee the S106?
(c) The text of the escrow account conditions and the name of the bank to be used would be of some interest to me.
(d). I cannot recall seeing anything that protects the Sports Centre against residents in the flats successfully objecting to changes being made to the Sports Centre (or, indeed, to its existing activities if they were to cause inconvenience).
These are all matters that arise due to the exceptional nature of the scheme.
3. The absence of the RSL as a signatory to the "supplemental" S106 seems more and more inappropriate the more one looks at their role in the early stages when they were exploited (no criticism intended) by the developer, in order to get planning permission.
4. In the light of the extraordinary letter from Paramount which is part of AP19, one wonders if there is any credence to be given to the rest of that document. For example, the cost of marshals. That is not a topic any of us are expert in but one is aware that it was in the developers interest to show the sale values of flats as high and his interests could have been served by showing the marshalling costs as low. Presumably, the council has an ability to make a comparison. At the ESG meeting, the importance of marshals having the right qualification was stressed so presumably, we are not talking about any old marshal. You may have noted that the Inspector was impressed by that document.
Finally, we are aware of similarities with other contentious planning decisions such as Little Green Street and Fitzroy Road. In all three cases, the issue of access is critical. However, in the case of Dalby Street, we are talking of access for eternity and not just for the construction period. That unique aspect needs to be properly reflected in the arrangements and it hasn't yet been.
Regards
Nick
2.6.2008 AB to NJH cc AM, DJ, Michael Cox, Anne Doherty
Subject: FW: Dalby Street, Talacre
Dear Mr Harding
Thanks for your e-mail below.
I apologise for not responding earlier.
I think your e-mail supersedes your letter of 11 April as the issues largely overlap. The exception is the point raised in your letter about Temporary Pedestrian Access during about Phase 3 of the construction . For your information this is still under discussion with the Developer.
I set out below my response to your e-mail and I hope this is of assistance in clarifying the situation.
Introductory point
As an Introductory point I would reiterate that both the Inspector at the Inquiry and Counsel considered that the protection offered by the Section 106 in the form presented at the Inquiry was sufficient to safeguard the Council's interest (and the broader public interest.) The Inspector based his recommendation upon that draft so it is implicit that the Inspector considered that the specific wording contained therein was sufficiently robust. Counsel also cleared the wording of the draft Agreement. I shall now respond to each of your points in turn.
1. Notwithstanding my Introductory point, as I mentioned to you before, we are
negotiating strengthening the Review mechanisms in the Section 106 with the Developer's solicitor to make it even clearer that the obligations on the Developer could be amended by the Council in order to safeguard public safety and amenity. I am happy to share the final wording with you once it has been agreed.
2.
(a)The sums to be paid to the Council in the event of delay in Stage 3 are entirely separate to the £1.1 m to be secured as a surety which the Council can call on in the event of breach. As noted above, the Inspector was happy with the wording of the Inquiry draft S106. I've also reviewed the wording of the relevant clauses again with a critical eye and it seems totally clear to me. However I will adopt a similar approach as to 1 above, i.e. raise with the Developer inserting further wording into the agreement for the avoidance of doubt.
(b) There is no parent company guarantee but I would refer once again to my Introductory point. Counsel's view was that the inclusion of the owner as a party to a Section 106 plus the provision of the Bond provided sufficient comfort to the Council. This view was endorsed by the Inspector through his positive recommendation. It may be worthwhile noting again that a Section 106 is a landownership agreement-it binds land and the obligations contained therein would run with the land provided they are entered into by the owners of the land. Hence planning authorities are not generally concerned about the identity of such parties so long as they are legally valid entities at the time the agreement is entered into. This is the approach adopted by the Planning Inspectorate at Planning Inquiries where I think any Council would be at risk of being held to be unreasonable if it were to insist upon other supporting "guarantees" beyond requiring owners of land to sign up to obligations through a Section 106.
(c) The Surety has not yet been nominated by the Council. Under the Section 106
the identity of the Surety and the precise terms under which the Bond will be held by the Surety have to be agreed by the Council before occupation of the Development can take place. Also occupation cannot take place until the bond figure has been paid to the Surety. This gives the Council a high degree of protection -the Council would seek injunctive relief were occupation to take place in breach of this requirement.
(d) The Council could not use the Section 106 (or any other legal agreement) to seek to interfere with a person's statutory right to make representations about a planning scheme.
3. Section 106 of the Planning Act is a power for a planning authority to enter into agreements with land owners in its borough. Hence the Section 106 is a land ownership document. In order for it to be enforceable it needs to be concluded with all parties who own an interest in the land . The RSL do not currently own an interest in the land so there is no necessity for them to be party to the Supplementary Section 106 agreement. This approach was endorsed by the Inspector at the Inquiry. So for example he took representations on service charges and their impact on the RSL into account but he did not appear to see them as central to his decision.
However the Council does recognise that the issue of whether or not the RSL is prepared to sign up for the scheme is an important one for yourself and Mr Cummins . In summary your argument is that service charges will have to be at such a level that no RSL will sign up to the scheme. Hence for the sake of clarity we have asked the Developer to obtain written confirmation from Community Housing Group that they are still committed to the scheme. This could then be presented to the members at the Sub Group meeting in June.
4. Dave Jenkins the Council's Highways Engineer considers the costs put forward in
respect of the Marshals to be reasonable. As i said above, I hope this is of some assistance.
Regards
Aidan
Aidan Brookes
Principal Lawyer
Culture and Environment Section
London Borough of Camden
10.6.08 NJH to AB cc AM, Ann Doherty. DJ, Michael Cox
Subject: RE: Dalby Street, Talacre
Aidan
Thanks for yours of 2nd June below. Could I ask you to let me have something on the last (new) point as soon as possible so that I avoid misquoting the situation. Using your numbering plus the additional point (5)
1. Your “Introductory point” and numbered para 1 about safeguarding public amenity has to be strengthened a very great deal for the community to be fully safeguarded. I have often suggested changes the Sports Centre might need in the future (ie all time) but really the list is endless. The most recent one that has been suggested to me is what happens if patronage of the Sports Centre reduces (or fails to maintain its increase) and it is thought that the reason is fear, especially after dark, on the pedestrian route? Security men at either end is the only viable contribution to reducing the problem? Or on the other hand, patronage could go up, or have a different mix, so that the vehicle route only works with marshals at both ends. And those are only examples that assume no structural change (ever) to the Sports Centre. I believe you are relying on clause 30 of the Service/management plan which says “That it is acknowledged that the council reserves the right to make amendments to this plan if required to safeguard public amenity and the reasonable access requirements of the Sports Centre”. I know it sounds arrogant for me, a non lawyer, to challenge the wisdom of the legal department of the borough and its counsel. We don’t ourselves have the resources to obtain formal legal advice from planning lawyers. However, from less formal advice, our view that this clause is totally inadequate, is very strongly supported. It is even suggested that if the council imposed very expensive obligations on the owners or the developer, he might put up the argument that that clause couldn’t possibly mean what the council is claiming because no one could have been expected to enter into such an onerous obligation. The Inspector was not a lawyer and as far as I know had no recourse to legal advice so I am surprised that approval of such wording is seen as coming within his terms of reference.
2. (a) It would certainly seem right for it to be made absolutely clear that the £1.1m is not available for stage
3 damages. Were you aware that the version of the S106 that was delivered to us the day before the public enquiry ONLY covered the construction period according to the definition of the security. I refer to clause 2.7 being the definition of “the Bond” which says “means the bond referred to in this Agreement to be agreed
by the Council such to be substantially in the form of the draft attached at the Sixth Schedule being a bond for the sum of [] (“the Bond Figure”) to act as security for the Owner’s obligations in respect of clauses 4.6 and 4.12 hereunder”. 4.6 refers only to the “Agreed Temporary Access Plan” ie “until the Permanent Access Way Completion Date”. 4.12 merely said “Upon acquiring a registerable interest in the Travellers Site and part Dalby Street the Owner covenants to re-execute this Agreement”. There was a clause 4.13 which then referred to 4.6 to 4.12 albeit appearing to be an afterthought. I recall this well as I was endeavouring to scrutinise the document (in the very short time available) to establish just what were the developers obligations. When the next version of the S106 arrived after the end of the first day of the enquiry, the security arrangements had changed and the bond definition referred to clauses 4.6 to 4.12 ie still including the Temporary access period but at least covering the all important post completion obligations.
2. (b) A parent company guarantee might be of little value so my suggestion of the need for one probably has little merit. However, I find your response disturbing when you say Counsel’s and the Inspector’s view was that the £1.1m Bond was sufficient comfort to the Council. Again, I am surprised that his terms of reference were so wide but, if they were, he would have been relying upon the notorious AP19. Given that that document was tabled in the last hours of the inquiry, that there was a half hour adjournment to consider it and Camden officers were present and the Council was a “joint proponent”, the Inspector could
reasonably assume that the Council endorsed it. Its figures and statements are ludicrous so I am surprised that you would see it as showing that the security is “robust”. The Inspector and Counsel may not know the area but Camden officers present should and the Inspector, if that was in his terms of reference, could assume that AP19 figures were reasonable eg 3 bed private flat above a Doctors surgery, next to a railway line worth £1m, paying service charges and ground rent totalling £7,500 (assuming the affordable flats pay their share of marshalling etc), next to Primrose Hill? 2 (c) Given that there was no security until the S106 draft agreement we received the day before the inquiry and that at the end of the first day of the inquiry it switched from being a surety bond to something that is a sum of money defined as a both a bond and a bond figure, with text that is gobbledygook (where on earth did it come from?), I hope that the developer is not walking all over the council. If it is money in a bank account that the council can draw on without contestation, then all well and good.
2 (d) I can see that this would be the law but I wonder where this was drawn to the attention of the public and Councillors when the access plans were being considered. If I understand it right, it means that the owners of the flats would be in a position to veto any planning application that might be made to enhance or maintain the Sports Centre (forever, of course) if it could lead to higher service charges. Where does that leave the requirement to “safeguard public amenity and the reasonable access requirements”?
3. I appreciate that a S106 agreement goes with the land. However, it does have parties who take on obligations at the time it is entered into and the RSL is a party to the only current signed S106 agreement. The main reason for Councillor support for the development was the Affordable Housing. If the RSL had been a party to the updated draft S106, presumably he would have been involved with the public inquiry and the discussions concerning such matters as the extent of liability for changes and other requirements on the access routes and their impact on service charges. That would all have come up at or before the public inquiry. As it is, I am at a loss to understand how it was that the Council’s representatives at the inquiry didn’t at least bring the question up then or immediately after the inquiry. It seems to have been left to us to make all the running on this and its now 9 days before a critical meeting of councillors and the question may still be open.
4. Although I doubt if it affects matters of substance, there are arithmetical and formula errors in the pages of AP19 that concern marshal costs and the future value of the “security” – which I assume means funds in a Trust bank account.
5. Read the Temporary Access Plan, I feel there could be merit in strengthening the text to ensure that the developer is not able to start on site within the time constraint (of 10.12.09), complete Stages 1, 2 and 3 in the time specified (34 weeks) and then do nothing, for example, until the market improves which could be years. Stage 4 ie week 35 to 62 shows him as having to complete by week 62 but it doesn’t specifically say so and define completion. His costs to complete to the end of Stage 3 would not, in the context, be very great so it must be important for there to be no possibility of completion (including of course occupation of the Affordable flats) not being within the timetable. Or have I missed something?
Regards
Nick
NJH to AB CC AM, Anne Doherty, DJ, Rachel Stoppard, Matt Sanders
Subject: FW: Dalby Street, Talacre
Dear Aidan
I would be grateful if you could respond to mine of 10th June (below). While the changes made to the Supplemental S106 and the report to and draft minutes of the Executive (Environment) sub-group have intervened, the matters requiring response are essentially the same except for what follows: 1. Introductory Point. Since mine of 10.6.08 there have been two changes made to the section in the Supplementary S106 that deals with Monitoring and Change (now clauses 28 to 31 of the Servicing and Management Plan). I obtained legal advice since 10.6.08 to the effect that the text then and following each of the changes leaves the Sports Centre (which in layman’s terms is a public amenity which should be safeguarded) in a position where its future is restricted. You and at the public inquiry, the Developers counsel, used this section to claim that the Sports Centre would be protected. In looking at the public inquiry documents, I find my point well illustrated by the paragraph in Camden’s Counsel’s closing submission (inquiry document AP20) where Mr Harrison says”28. The ability to review and impose changes – the final paragraphs of the service and management plan make clear that it will be under “continuous review” and that the council have the power (not just the ability) to make changes if necessary. If it turns out that the plans need to be adjusted. For instance that two marshals need to be provided at particularly busy times this can be done.” In other words, the monitoring text was just seen as dealing with minor changes.
2. The revised text of the Sup S106 reiterates that the £1.1m security is not required until the new routes are up and running and there is a marshalling regime. There appears to be no security covering the obligations of the developer to develop the site and, given that he has provided figures (AP19) which even in January 2008 were ludicrous, and given that the date of Stopping Up has suddenly been brought forward from the time the new routes are completed to at or even before the start, this is surely of grave concern. What protection has the public from the risk that this important piece of land will not be stuck in limbo for years and years?
5. (the date in mine should have been 10.1.09 and not 10.12.09 – apologies). See under 2 above with regard to the front end of the development. The question I raised of the extent to which the development has to be completed in 62 weeks also remains.
Regards
Nick
0780 180 2344
Nick@hpf.org.uk
29.9.08
NJH to AB cc AM, Doherty, Anne; Jenkins, David (Engineering); Rachel Stoppard; Sanders, Matthew (Councillor)
Subject: FW: Dalby Street, Talacre
Page 1 of 7
Dear Aidan
I would be grateful if you could respond to mine of 10th June (below). While the changes made to the Supplemental S106 and the report to and draft minutes of the Executive (Environment) sub-group have intervened, the matters requiring response are essentially the same except for what follows:
1. Introductory Point. Since mine of 10.6.08 there have been two changes made to the section in the Supplementary S106 that deals with Monitoring and Change (now clauses 28 to 31 of the Servicing and Management Plan). I obtained legal advice since 10.6.08 to the effect that the text then and following each of the changes leaves the Sports Centre (which in layman’s terms is a public amenity which should be safeguarded) in a position where its future is restricted. You and at the public inquiry, the Developers counsel, used this section to claim that the Sports Centre would be protected. In looking at the public inquiry documents, I find my point well illustrated by the paragraph in Camden’s Counsel’s closing submission (inquiry document AP20) where Mr Harrison says”28. The ability to review and impose changes – the final paragraphs of the service and management plan make clear that it will be under “continuous review” and that the council have the power (not just the ability) to make changes if necessary. If it turns out that the plans need to be adjusted. For instance that two marshals need to be provided at particularly busy times this can be done.” In other words, the monitoring text was just seen as dealing with minor changes.
2. The revised text of the Sup S106 reiterates that the £1.1m security is not required until the new routes are up and running and there is a marshalling regime. There appears to be no security covering the obligations of the developer to develop the site and, given that he has provided figures (AP19) which even in January 2008 were ludicrous, and given that the date of Stopping Up has suddenly been brought forward from the time the new routes are completed to at or even before the start, this is surely of grave concern. What protection has the public from the risk that this important piece of land will not be stuck in limbo for years and years?
5. (the date in mine should have been 10.1.09 and not 10.12.09 – apologies). See under 2 above with regard to the front end of the development. The question I raised of the extent to which the development has to be completed in 62 weeks also remains.
Regards, Nick
28.2.10
NJH to AM
Dear Mr Maughan
I refer to the Refusal Notice under the FOI Act sent to me by Michael Warby. Since it emanated from Legal Services, I am attaching the Complaint letter I have sent to the Information Commissioners Office as this is evidently the only method of appeal open to me.
I am shocked that Camden should regard my FOI requests as vexatious. Having read the FOI Act and the various guidance notes of the ICO, the meaning of that word seems to accord by and large with what one would expect. I have reread all that I have sent and cannot understand how the Council could take the view it has. If Camden believes that I have wasted my time on requests that have no serious purpose, value and justified cause, then I am afraid they have misunderstood the situation.
Yours sincerely
Nick Harding
2.3.10
AM to NJH
Dear Mr Harding
I am not personally acquainted with this matter but have asked to be briefed on it.
Andrew Maughan
Head of Legal Services
20.6.12
Marshall Levine to AM
Dear Mr Maughan,
There has you know been a lot of concern expressed over the residential project next to the railway line in front of Talacre. However recently, I have been asked by clients concerned over the Dalby St, Talacre project as investors to look into the development and I was told to contact you about reference( or lack of it) to the Supplementary s106 agreement dated 30.9.08 at the Land Registry.
It appears that this important document is not and has never been registered with the Land Registry in spite of being effective and registering it being a specific obligation per clause 6.5.This is a mistake by the developer and unmonitored by the Council.
“6.5. The Owner hereby covenants with the Council that it will within 28 days from the date hereof apply to the Chief Land Registrar of HM Land Registry to register this Agreement in the Charges Register of the title to the First Property and will furnish the Council forthwith on written demand with official copies of such title to show the entry of this Agreement in the Charges Register of the title to the First Property and further that the Owner will within 28 days of being registered as Owner of the Property (comprising all of its parts including those currently owned by the Council) re-execute this Agreement and apply to the Chief Land Registrar of HM Land Registry to register this Agreement in the Charges Register of the title/s to the Property and will furnish the Council forthwith on written demand with official copies of such title to show the entry of this Agreement in the Charges Register of the title/s to the Property”
The only s106 agreement registered under the relevant number (NGL637463) is the original one dated 10.1.06. The Supplementary s106 contains new clauses which should be of major importance to anyone concerned with the development including in particular buyers of the private flats and lenders who take security from the land and its development.
I am advised that between 10.1.06 and 30.9.08 the Supplementary s106 including its schedules which deal with access to Talacre Sports Centre and the park was the subject of a public enquiry and much correspondence involving the Mayor of London and Sport England. The result was a document which purports to protect the public amenity. Anyone having a future interest in the land would be likely to be particularly concerned with the impact of many of the clauses not least those which require marshals to manage access to the extent required by the Council for all time.
IN MY VIEW, THOSE OBLIGATIONS ARE SO ONEROUS THAT A SOLICITOR WOULD HAVE DIFFICULTIES IN ADVISING HIS CLIENT TO BUY A FLAT, LENDER TO LEND ON THE SECURITY OF A FLAT/PROVIDE A MORTGAGE LOAN OR SIMILAR WITH RESPECT TO MASS PURCHASE OF FLATS.
Unless I have missed something, this omission is extremely serious. At the very least, it means that persons may obtain an interest in the development who are not aware of these onerous obligations and therefore who will attempt to resist the impact which is likely to be in the cost of marshalling being recovered through service charges. Those service charges are estimated to be substantially higher that would apply to any development anywhere in Camden.
One is aware, of course, that anyone impacted by these onerous conditions should eventually become aware of them through their solicitor checking Camden’s Charges Register and/or the information pack provided by the developer/freeholder. However, that is late in the day and by that stage, a buyer or lender will already have made non-binding commitments.
The need for the situation to be very transparent and clear to anyone is especially important due to the exceptional nature of these obligations. At the public enquiry, it was common ground that using marshals, paid for by the owners of the land to ensure access to a public area was unique. The obligation was usefully spelt out by Peter Harrison QC in his closing submission where he said “31. LBC rely on the Section 106 agreement. It has to be remembered this provides some important safeguards for Camden-
A. These obligations run with the land.
B. Anybody who buys the land from the current owners or in any other way is a successor to them (eg a land leaseholder in the flats, the owners of the Dr’s surgery or a housing association running the affordable housing) will be liable to keep the marshal on site and to maintain and footpath and the access road...”
The history behind this development was that it was originally to have the access on a one way route which required the applicant to procure that Network Rail allowed the whole of Wilkin St Mews to effectively become available for public use. When it was found that NWR were not willing to co-operate, the developer came up with the existing scheme which involves fitting the development into a much smaller area with a two way road which they persuaded Camden could work provided it was managed by marshals. It has always been the conviction of opponents that it was totally unfeasible unless Camden reduced the marshalling obligations which arise from the Sup s106. Unlike other developments, where one would expect relatively minor issues to arise from the due diligence work carried out in the late stages of a transaction, here there are fundamental aspects which should be known well in advance.
I would be most grateful for a reply to this letter
Marshall Levine
Marshall F.Levine & Associates
20.6.12
AM to Marshall Levin
Dear Mr Levine
As you will imagine I am not close to the specifies of this matter and therefore have asked a college (Aidan Brookes) to deal with this on my behalf. He will be in touch shortly.
Andrew Maughan
5.7.12
NJH to AM
Dear Andrew Maughan
As you are aware I have taken a very close interest in the Dalby St, Talacre development including publishing the www.savetalacre.co.uk website.
I have become aware in the last fortnight that the developer’s publicity and his quoted service charges do not reflect the agreement between him (and therefore subsequent private flat owners in particular) and Camden.
Accordingly, on a new page on the website (for the Prince’s Park development as it has been christened by the developer), I have included extracts with some commentary from the agreement.
I don’t know whether the Council will welcome this – as far as I can see, it helps to ensure that it is less likely that a buyer or lender will fail to appreciate the full consequences of buying or lending at an early stage.
Be that as it may, I would welcome any comments or corrections. I am not a lawyer but find there is little need than to stress the text of the Supplementary S106 agreement and to draw attention to its existence (as it is not on the Land Registry). From what little experience I have of buying flats in a new development, I find that it is only at a very late stage that anything unusual (eg car capping) becomes known to the buyer if the agent has not informed him. In this case, the obligations are extremely significant.
Because the web page changes as I find it can be approved, I will copy in the current text relating to the s106s below:
EXTRACT FROM PRINCE’S PARK PAGE ON THE SAVETALACRE WEBSITE AS AT 4.7.12
“In June 2012, the developer started to market, off plan, the 36 private flats including holding open days. See Attachment #1 at the bottom of this page.
These are some of the facts anyone interested should know:
SERVICE CHARGES. A "Fact Sheet" states that Service Charges will be about £4 per sq ft. We calculate that to mean the charges for the average 1, 2 and 3 bedroom flat would amount to about £1800, £3,300 and £4,600 pa respectively. These are amazingly high even for London. However, we estimate that they need to be much higher, perhaps two or three times that amount.
This is due to the development being unique because the flats are build on top of the road which until 11th June 2012 provided access for vehicles and pedestrians to the Talacre Community Sports Centre (TCSC). The TCSC is very popular, having roughly a third of the number of visitors as the London Zoo.
The development has to provide a new road to replace the one that is occupied by the building. The new road is so narrow (4.8m wide for most of its distance) that it has to have marshals to manage it for all time. That road has no pavements and is crammed in between the building itself and a mews with arches containing businesses including a brewery. Pedestrians are meant to use a route which is also part of the development so has to be managed, on the other side of the building. The cost of employing the marshals and of the upkeep of the road and pedestrian route falls on the owners of the private flats and therefore has to be included in their service charges. (Because the developer has an obligation to enter into a contract for marshalling for three years prior to the flats being occupied, it might be possible for the service charges for those years not to reflect some or all the marshalling costs but it would mean a dramatic increase would take place in year four)
ONEROUS S106 OBLIGATIONS. An agreement known as a s106 agreement sets out the planning conditions. Owners of flats will take on extremely onerous obligations which will apply for all time and which are open ended. To appreciate this, you should read the Supplementary s106 agreement, “s106” dated 30.9.08. It is attachment #2 at the bottom of this page. It is 86 pages long. Below we give extracts of the more important sections and explain what they could mean in practice. That agreement contains all that had to be added to the original s106 in order to include for the special access arrangements mentioned below.
The obligations in a s106 agreement fall on all those with “an interest in the land”. The following is an extract of Camden's submission to the public enquiry
"31. LBC [Camden] rely on the s106 agreement. It has to be remembered this provides three important safeguards for Camden. A - the obligations run with the land. Anybody who buys the land from the current owners or in any other way is a successor to them (eg a long leaseholder in the flats, ...will be liable to keep the marshal on site and to maintain the footpath and the access road...".
In practice, the responsibility will rest upon the 36 private flats and if they don’t fulfil it, their owners will face legal action and possession from Camden.
As as 26.6.12 there has been no reference to it on the UK Land Registry website (Title Number:NGL637463). Only the original s106 agreement is shown there and that is out of date.It can, however, be found on the Camden Planning site reference 2005/4187/P. It is part of a number of separate postings on the site which makes it less accessible than the attachment at the bottom of this page. This Camden site contains the original s106 agreement separately and the Re-Executed s106 dated 30.9.12 joined with the Sup s106. For an explanation of the relationship of these three s106s, see the final posting listed (mistakenly twice)
WHAT FOLLOWS IS A DRAFT GUIDE TO SOME OF THE MORE ONEROUS CLAUSES IN THE SUP S106 AGREEMENT. IT CONTAINS OUR COMMENTS WHICH ARE NOT A SUBSTITUTE FOR LEGAL ADVICE. ANYONE CONSIDERING BUYING A FLAT OR FLATS OR LENDING TO A PURCHASER SHOULD READ THE FULL SUPPLEMENTAL S106 AGREEMENT OF 30 SEPTEMBER 2008 WHICH IS ATTACHMENT 2.
INTRODUCTION
The following are some of the clauses in the Sup s106 agreement which are understood to protect the public amenity, together with our understanding of their purpose and background.
The Sup s106 is the main legal agreement between Camden and the “owners of the land” as defined in planning law and understood to be anyone with an interest in the land which would, according to Peter Harrison QC, include owners or leaseholders of the private flats.
The Sup s106 largely or entirely supersedes the Original s106 agreement which is the only s106 agreement registered at the Land Register at 29.6.12 in spite of the obligation in Clause 6.5 in which the Owner (ie the developer) covenanted to register the agreement at the Land Registry
Extracts from Supplementary s106 agreement (Sup s106) dated 30.9.08 related to the obligations of Leaseholders, Freeholders of Flats etc, arising from the access requirements
SOME CRITICAL CLAUSES AND THEIR BACKGROUND AS UNDERSTOOD BY US
2.20 “The Paramount Objective”
The overriding objective underpinning this Agreement (which both parties shall have regard to and give effect to carrying out and enforcing the obligations of this Agreement and the plans/briefs incorporated herein) such objective being the absolute requirement to safeguard secure and guarantee public amenity and safe free marshalled properly maintained and commodious access for the public at large to and from the Leisure Centre (either in its current built form or in any later rebuilt form which has been granted planning permission) and specifically over the Pedestrian Access Way and Permanent Access Way
[This clause was added along with several references to the defined term, due to the desire to see more clarity that the public amenity was not to suffer as a result of the existing road being sold, stopped up and built on top of and new accesses being provided.]
4.23 The Owner covenants that it will give full effect to the overriding requirement to secure the Paramount Objective in carrying out its obligations under this Agreement and agrees to do nothing that will conflict with or impede the Paramount Objective and in the event that the Council in its reasonable opinion (after taking into account any representations made by the Owner and balancing the need to secure the Paramount Objective (having regard both to the past operation of the Plans/Brief and arrangements under this Agreement and to any changes or proposed changes in the built environment I highway network/ open space in the vicinity of the Development) against the reasonable operational requirements of the Owner) concludes that the Paramount Objective is being breached (or fundamentally compromised or impeded) by any action or inaction on the part of the Owner it may serve notice on the Owner to this effect setting out the steps that the Council reasonably considers would remedy such breach or fundamental compromise and in the event of receipt of such notice the Owner shall at its own expense comply with the requirements of such notice as soon as reasonably practicable
[This describes the Council’s rights to enforce the Paramount Objective]
4.25 In the event that in the reasonable opinion of the Council the Owner at any time after the Occupation Date is in material breach of the obligations in this Agreement to the extent that the Paramount Objective is seriously compromised the Owner covenants that upon receipt of written notice from the Council it shall as soon as reasonably practicable dedicate any areas of land specified in the notice (being any part of the Permanent Access Way or the Pedestrian Access Way) as highway within the meaning of the Highways Act 1980 upon such terms as the Council considers reasonably necessary (including terms as to future maintenance) to secure the Paramount Objective ALWAYS PROVIDED THAT the parties acknowledge that the right of the Council to serve such notice is without prejudice to the Council's right to enforce the obligations of this Agreement on the Owner and shall not in anyway be taken as diminishing or altering the requirements on the Owner under this Agreement for the Owner to comply with such obligations.
[The development including the flats is on top of the road “Dalby Street” that was owned by the Council. It agreed to sell the road and an adjacent plot of land and to assist in getting the road stopped up in order for the planning consent to be exploited.]
5.6 The parties hereto and their successors in title agree to meet (in accordance with the requirements set out in the Agreed Service Management Plan and the Traffic Marshalling Brief) on at least an annual basis unless both parties agree such a meeting is unnecessary to consider the Agreed Permanent Access Plan and the Agreed Pedestrian Access Plan and the Agreed Service Management Plan and the Traffic Marshalling Brief to make any amendments which they may agree are desirable at that time for the safe and efficient operation of the Permanent Access Way and the Pedestrian Access Way.
[Similar to what is in more detail in Schedule 5 clause 28 below]
Schedule 5. The Agreed Service Management Plan
MARSHALS
6 That a marshal will be employed at all times that the Leisure Centre is open and also for one hour prior to the Leisure Centre opending and one hour after the Leisure Centre closes, in order to maintain the free of traffic along the access road for all vehicles and manage servicing/delivery activity. The marshal shall ensure the following: ….
[The duties of the marshals are set out at length in what follows the above extract and demonstrates their essential role in ensuring that access at the optimum level is secured. At the public enquiry in 2008, the developer tabled AP19 which can be found as attachment 3 on the Prince’s Park page of www.savetalacre.co.uk. It includes an estimate of the cost of one marshal for that time as £82,768 at 10.1.2008. It is possible for the extent of marshaling to be increased or reduced due to these schedules of access plans being defined as capable of being changed. It has frequently been publicly stated that at busy times, there could be a need for an additional marshal at the junction with the main road (Prince of Wales Road). It is the contention of local observers that the need is for an additional marshal full time at that critical junction. Camden has recently stated that they have no plans to change the above obligation ie one full time marshal at the start. £82,768 , 4 ½ years ago, could be £100k at the time the flats are completed. There are 36 private flats understood to be the only source of funds, through service charges, to finance that amount which means that an average flat would have to bear nearly £3k. Advertising of flats seen in late June 2012 state that service charges are estimated to be £4 per sq ft. The AP19 document showed the total area of the private flats to be 23,314 sq ft. That would only provide £93,256 and then there would be the other costs of maintaining these special access routes. None of these costs provide any benefit to the private flats. On top of that, the service charge of course have to cover normal costs for concierge etc. Thus there appears to be a major discrepancy]
MONITORING
28 The Council as highway authority has agreed to the Stopping Up Order and the
Further Stopping Up Order on the basis that the Paramount Objective shall be secured in perpetuity through the effective operation of the Agreed Permanent Access Plan, the Agreed Pedestrian Access Plan, the Agreed Service Management Plan and the Traffic Marshalling Brief (“the Plans/Brief”). The parties agree that the operation of these Plans/Brief shall be subject of continuous review by the Council to secure the Paramount Objective on an ongoing basis - this review to take place at least annually (or at shorter intervals If the Council reasonably considers that such review is required in the interests of securing the Paramount Objective.) In determining whether the Paramount Objective is being secured, the Council will have regard both to the past operation of the Plans/Brief, but also to any changes or proposed changes in the built environment / highway network / open space in the vicinity of the Development. As part of that review, the Council may require the Owner to produce such reasonable information on the operation of the Plans/Brief as the Council may reasonably require.
[Gives the Council the right unilaterally to review the terms of the access agreements at any time. Representations made prior to this clause being inserted pointed out that the Sports Centre is a place where changes in its operation and requirements for maintenance and even rebuilding constantly take place. If the damage to its interests is to be reduced, the marshalling and other access features have to be capable of speedy change and without there being any risk of objection]
29 In reviewing the operation of the Plans/Brief, the Council may require the Owner to make amendments to the operating arrangements for such Plans if the Council reasonably considers this to be necessary to safeguard the Paramount Objective (Whether these changes are in the reasonable opinion of the Council required in light of the past operation of the Plans/Brief or in response to any changes or proposed changes in the built environment / highway network / open space in the vicinity of the Development). For the avoidance of doubt, the Owner shall comply with the Plans/Brief as amended by the Council even if this requires increased expenditure falling upon the owner.
[This follows the concern expressed that a loose wording might cause there to be doubt as to the obligation to provide whatever is needed in the event of operational, maintenance (routine and major, planned and unplanned). The Council’s right to unilaterally impose obligations is again stated]
30 For the avoidance of doubt, the Council shall act reasonably in requiring any amendments to be made, taking into account any representations made by the Owner and balancing the need to secure the Paramount Objective against the reasonable operational requirements of the Owner. For the avoidance of doubt, the Owner shall comply with the Plans as amended by the Council.
[This requires reasonableness in relation to the operational requirements of the Owner. The Owner is anyone with an interest in the land including the freeholders or leaseholders of the private flats, the RSL and the NHS. Their operational requirements in this context would not seem to be significant but might include ability of cars entering and leaving the car park not to be unduly hindered, recycling etc not to be obstructed]
31 That if following a review, the Plan requires updating it shall only be done so with the prior written approval of the Council. For the avoidance of doubt if the written approval of the Council is not obtained the previously agreed arrangements shall remain in place.
[This remained in from earlier versions before it was decided that, although the Council reckoned it was protected, it needed there to be the clarity which can be seen in the other clauses]
32 That it is acknowledged that the Council reserves the right to make amendments to this plan if required to safeguard public amenity and the reasonable access requirements of the Leisure Centre and for the avoidance of doubt in the event of the Council making any such amendment the Owner shall comply with the Plan in its amended form.
[This puts it beyond all doubt that the Council has a right to impose its decisions as to what is needed to protect the Paramount Objective defined in clause 2.20 of this Sup s106]
See also in particular:
Schedule 3 Agreed Permanent Access Plan
Schedule 4 Agreed Pedestrian Access Plan
Schedule 6 The Traffic Marshalling Brief
Nick
Nick Harding
11.7.12
Julie Baum for AB to NJH
Dear Mr Harding
Further to your e-mail below addressed to Andrew Maughan, Borough Solicitor, Mr Maughan has asked I respond on his behalf.
However given the past history of communications, neither Mr Maughan nor other Council officers are willing to enter into correspondence with you on this matter
Thank you for your cooperation.
Aidan Brookes
Principal Lawyer
12.7.12
NJH to Julie Baum
Dear Julie Baum
The e-mail below refers to “your e-mail below” but there was no e-mail below (hope that makes sense).
I would be grateful if you would resend it so that it is complete
Regards
Nick Harding
12.7.12
Julie Baum to NJH
Hers of 12th with NJH’s copied
12.7.12
NJH to Julie Baum
Thanks
4.8.12
NJH to AM
Dear Andrew Maughan
I have now established that the Supplementary s106 and re-executed s106s for this development have at last been registered at the Land Registry and have scrutinised them.
Because of the importance of the sup s106, I have put what follows onto the Latest News page of www.savetalacre.co.uk. It is obviously an amateur effort and I have included a clumsily worded health warning – not least because the developer has in the past threatened me.
What I have omitted because they seem pedantic in the context, are the following in case they are of interest:
1. The drawing referred to in clause 2.12 of the Re-executed s106 bears no resemblance to the Plan X drawing provided. It was and is clearly an error. I pointed this out in two FoI requests but Camden, in its wisdom, decreed that they and five other requests were “vexatious”.
2. The date of the planning consent letter is wrongly shown as 10.1.2005 when it should be 10.1.2006. Usually that has been changed in longhand, but not in the versions on the Camden web site or the Land Registry. I mention this for completeness – I can’t imagine it being important.
In view of your department’s unwillingness to respond to what I have sent in the past, I am not expecting anything of substance in reply. I can only hope that this gets read and any relevant action is taken..
THIS IS WHAT IS ON THE LATEST NEWS PAGE OF WWW.SAVETALACRE.CO.UK
“Saturday 4 August 2012 Update
This follows our update of that of 27 July. We have now received from HM land registry copies of the documents which should have been registered there by the developer in October 2008, following the signature of the Supplementary s106 and Re-executed s106 agreements. They reached the Land Registry around 19th July 2012.
Unlike most s106 agreements, this Supplementary s106 agreement contains conditions which we believe are hugely important for anyone contemplating buying a lease of one of the 36 private flats (eg adding £,000s to annual service charges) and for others who have what is termed “an interest in the land”. Hence the detail provided here. What follows is not written by a lawyer and, of course, is no substitute for the due diligence work usually carried out by a buyer’s solicitor shortly before completion. What we hope is that no purchaser will reach a late stage in his decision making without being aware of what he is potentially taking on.
Any member of the public can obtain copies of these agreements by completing Form OC2 and paying a total of £12 for which you can ask for any or all of the documents referred to on the Land Registry site for NGL637463 by ordinary mail (snailmail) – usually arriving within three days in the UK. The completed form needs to be sent to HM Land Registry, Croydon Office, Trafalgar House, 1 Bedford Park, Croydon CR0 2AQ. To find out what documents are available, a search of NGL637463 on the web check site with payment of £4 provides an extract of what is on the Land Registry and available. An extract at 19.7.12 can be found as an attachment at the bottom of this page ("19.7.12. NGL637463-1.pdf").
Our request for these new documents has produced basically what we show in attachments at the bottom of the Planning Agreement page of this site. In addition, the Memorandum and Articles of Association of Cornwall Developments Ltd (reg. In the British Virgin Islands) is provided by the Land Registry. Unlike in the version on our Planning Agreement page, the drawings for both agreements were not collated in the version sent from the Land Registry though the meaning is clear enough in the copies we received.”
Nick
10.9.12
AB to NJH
Dear Mr Harding
I have been passed your e-mail of 31 August 2012 by the Borough Solicitor .
As you are aware a decision has been made that the Council will not enter into any communication with yourself in relation to the Dalby Street Scheme and you were declared a vexatious correspondent for freedom of information purposes on 25 January 2010 in relation to the matter.
That being the case the Council will not be responding to your e-mail.
For the avoidance of doubt please note
(i) any correspondence between yourselves and any third party is entirely a matter for yourself and the Council does not wish you to forward it any such correspondence. However given the nature of the correspondence we would suggest that if you wish to contest the matter you seek independent legal advice.
(ii) the Council will not (as you may be suggesting in your e-mail) provide you with what would amount to any form of legal advice on the matter.
I trust this clarifies the situation
Aidan Brookes
Principal Lawyer
Legal Services
London Borough of Camden