talacrefacts 2020/22 overage update
talacrefacts 2020/22 overage update
This is our view of the situation.
1. Overage is owed, the question is whether or not the liability is enforceable whoever is liable (see 3)
2. The CNJ report of 6.8.20 here said that Camden informed the CNJ that it is not enforceable. Not that it is not owed. We were told, in effect, that if a way could be found to enforce, it would be collectable. See my notes here of what was said at the Zoom meeting between Cllr Danny Beales and Clr Richard Olszewski, Nick Harding and Brian Lake.
“Nick. 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. 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.
Danny. I think that so far, no formal decision has been taken and we are reluctant … legal advice .. if circumstances did change due to …? If there were other examples … different legal opinions. The whole.. there might be a different … At this stage, the information that we have … at this time.”
Much play was made by Camden officers and executive members, of the fact that they had received Counsel’s opinion that overage would be so hard to collect that it was not in Camden’s interest to try. Those are my words. We requested time and again, for the terms of reference given to Counsel and the text of their reply/advice. Camden would not provide it. Our experience has been that for very many years Camden has either supported the private sector body involved or just given in to it.
3. Those who may be liable include the Freeholder, the Owner/Freeholder at the time of completion (or a defined time thereafter), the Developer (often the same as the freeholder) the current leaseholders. Our legal advice is that Leaseholders may be liable for overage.
4. Current leaseholders are not known for certain as HMLR has not been updated (see 6) since March 2021.
5. The suggestion made to those leaseholders whose addresses we had from the Land Registry, was for them to press Camden to carry out the terms of the Sale Agreement by appointing an “Expert”. Failing which, to request Camden to in effect change that agreement so that leaseholders could not possibly owe overage.
21.6.2021
This web page covers Overage payable on the Talacre development (called Prince's Park) and is usually the Landing Page for a web site that was created many years ago. Information on the scandal surrounding Overage with supporting information and on other aspects of the Talacre development are on links 1 to 12 in red font below For details of all that is on the web site, go to the Home Page click on the lines towards the top on the left to find the complete menu.
If you failed to bookmark this site, you can do a Google search of Talarefacts and you should find the first or second result is the original Talacrefacts site which with one click will get you here.
Where a Council sells land to a developer, Overage is often a condition in the sale agreement requiring any profit made by the developer/owner over a defined amount, to be shared according to a defined formula. An Overage condition existed for the Talacre project. Following years of seeking information from Camden about payment of Overage due from the developer/owner, it became apparent in mid 2020 that Camden might be giving up on its attempts to collect it and so we decided to make the situation public.
Up until then, all Freedom of Information and other requests to Camden had been answered saying the topic was “complicated” and being pursued. It didn't become due until about 2016 as under the terms of the agreement, it wasn't due until then, although the building was completed and all the private flats sold by 2014.
THE VERY LATEST IS COVERED BY 8 BELOW.
This page is intended to contain the main documents that are relevant. In particular-
1. The Freedom of Information requests and responses from start to current
2. The Sale Agreement for the land which contains the Overage condition
3. Sales of private flats
4. Calculations showing our estimate of over £3m for the Overage due from the owner of the land
5. Recent press coverage – comment and letters
6. A more complete description of Overage and the timing of events between 2005 and 2014
7. Overage experience of other London Boroughs
8. Recent and ongoing correspondence with Camden's leadership. This is intended to be kept up to date unless we feel it is in the interests of recovering this overage to delay or otherwise not publish it. Earlier correspondence is being entered onto this separate page Correspondence with Camden Officers and its 3 sub pages.
1. The Freedom of Information requests and responses from start to current
It is hoped that anyone skimming through this page, will see why we have decided that the time came in mid 2020 to publicise the situation.
2. The Sale Agreement which contains the Overage conditions
Camden’s Freedom of Information reply on 26.6.09 confirmed that it is the Conditional Sale Agreement between Camden and Trac Properties Ltd dated 19.4.2005 that sets out the Overage conditions. See-
Clause 12 on page 12
The Second Schedule "The Overage Payment". It runs to only 3 pages (24-26) and is essential reading for anyone seeking an understanding of what this is about.
The Fourth Schedule "The Development Appraisal". It is stated at the bottom to be Copyright © Shaw Corporation 2005 but we believe it should be a public document. Christopher Shaw was the Chair of Camden Town Unlimited, a quango partnering the Council and the private sector. At 3.3.20 he was shown on a Companies House document as having significant control of Trac Properties 2 Ltd. We mention that in the interests of openness, without any suggestion of impropriety. The Development Appraisal shows –
The land value to be £640,000 with half ie £320,000 payable by Trac before completion. A further £11,000 (£5,500) was added in the Supplemental Sale Agreement. The other half was not payable because it was in exchange for the developer entering into the overage agreement.
The estimated selling price of the private flats to be £8,197,629 and
the estimated profit to the developer to be £1,987,180.
This is the relevant "Conditional Sale" agreement here on [LINK2]
A later agreement, the Supplemental Agreement has no impact on Overage except to increase the purchase price for the land by £11,000 to £651,000 (of which 50% ie £325,500 was payable by Trac as described above.
This later agreement dated 6.7.07, the Supplemental Sale Agreement, is here on [LINK3]
3. Sales of Private flats.
£20,757,590 was obtained by the owner/developer from the sale of the 36 private flats shown on the Land Registry at 4.12.2014.
Originally the names of the buyers were on the schedule but, in spite of them being available for anyone to find and therefore in the public domain, the Land Registry objected to them being put onto a publicly available website. The schedule below therefore only contains flat numbers, beds and selling prices. [Link4] "Private Flat Purchases at start .." linked here provides more information.
Princes Park, Talacre Private flats sold per HM Land Registry at 4th December 2014
# Fl Beds Price £ # Fl Beds Price £
1 2 1 340,000 19 5 1 389,500
2 2 2 670,000 20 5 3 900,000
3 2 1 350,000 21 5 1 395,000
4 2 2 730,000 22 5 2 720,000
5 2 1 300,000 23 5 1 435,000
6 2 1 363,000 24 5 1 470,000
7 3 1 400,000 25 5 1 369,840
8 3 2 700,000 26 5 1 403,750
9 3 1 357,000 27 6 2 825,000
10 3 2 700,000 28 6 3 1,100,000
11 3 1 430,000 29 6 1 400,000
12 3 1 465,000 30 6 1 550,000
13 4 1 362,500 31 6 1 445,000
14 4 2 680,000 32 6 1 445,000
15 4 1 382,000 33 6 1 445,000
16 4 2 765,000 34 7 3 1,185,000
17 4 1 415,000 35 7 3 1,290,000
18 4 1 410,000 36 7 3 1,170,000
8,819,500 11,938,090
8,819,500
Total £20,757,590
4. Calculations showing our estimate of Overage due from the owner of the land
We calculate in Link 5 below an estimated amount of £3,877,798 to be owed. The amounts in the left column come from the Development Appraisal being the 4th schedule in the Sales Agreement (see 2 above). The amounts in the right hand column are those in the left hand column adjusted for inflation in the case of some costs and, for the actual price obtained for the sale of the private flats. The very substantial amount of Overage estimated is mainly due to the increase in the value of the private flats from the amount of £8,197,629 in the Development Appraisal to the amount of £20,757,590 actually achieved
See spreadsheet "Overage Talacre Estimated" here on [LINK5]
5. Recent press coverage – comment and letters
However what concerns us more here are recent articles and letters that relate to Overage, starting 9 July 2020 when the Camden New Journal (CNJ) had learnt that we felt Camden was about to give up. On that day an article by John Gulliver in the CNJ started things off and was followed by a very detailed article by him on 6th August. Those and other articles and letters are in
"Press from July 2020 in Word format" here in [LINK7]
The Forum article on 20.8.20 introduced two additional Issues which are not connected directly to Overage but intended to demonstrate how the behaviour of Camden's officers fell below what would be expected.
Issue 1 was an officer telling Sport England that access to the Sports Centre after dark was fine because the park was lit at night. The park had always been locked at night. This prevented Sport England from objecting to the stopping up of Dalby St and the Mayor of London approved it before this lie could be corrected.
See letter from Rachel Stopard, Director, Culture and Environment of 24.7.08 here in [LINK8]
Issue 2 was scrapping the required marshaling scheme on the grounds that there was little traffic going up New Dalby St to the Sports Centre, based on a
8 day survey carried out by the developer's associated company, Citidwell here in [LINK9]
By chance, some clips were taken by us during that period that contradict that survey. Using a survey produced unsought by an interested party also seemed unusual.
To view the clips you have to click on the yellow highlighted links in the left column. See, for example the album of 3 clips for the evening of 15th October and compare it with Citidwell's survey and see the commentary that comes up comparing the clips with the survey.
Clips we made from 10 to 17 October may be found here in [LINK10].
A more complete description of Overage and the timing of events between 2005 and 2014 shows the contractual history and describes many of the anomalies. Perhaps not for the faint-hearted. It is on the
Land Documents page here in [LINK11]
7. Overage experience of other London Boroughs
In 2017, We decided to look into some of the experiences of other inner London Boroughs that might have included Overage clauses in contracts. See the separate pages for each of 16 boroughs under London Boroughs' Overage. It is rather incomplete as we stopped doing follow up requests etc but it could be a starting point for anyone wanting to see how some other Councils addressed overage. It demonstrates how some other boroughs included and collected overage in contracts in other
London Boroughs - in particular Westminster and Southwark.see [LINK12]