The initial lease from the solicitor was a full commercial lease but as the buildings were to be transferred to the charity only a land lease was required.  These are the notes I proposed to the Parish Council to go to the solicitor.  it is dated 15th  November 2015

Dear all
 
The following notes are for the consideration of the solicitor.  Can you please check and confirm your agreement before Tony and I set up the meeting
Kind regards
Ray
 
1) Where we are
The lease seems to be a lease for a property.  This leaves the Parish Council with responsibilities eg insurance and therefore claims for repayment for costs incurred. The lease builds in limitations and controls which are not in our heads of agreement, eg alcohol. As a result, the lease is overly complex and leaves the Parish Council with on-going responsibilities
2) Where we need to be
We need a lease for the plot of land.  The buildings are irrelevant and should be considered as the property of the charity. If necessary they can be donated to the charity at the same time the lease is signed. The charity is responsible for all legal requirements related to owning a building such as public liability insurance  Only the controls in the heads of agreement should be included.  The lease may not be transferred to a third party. 
3) Benefits
The lease is smaller and simpler.  All references to payments (apart from the peppercorn), VAT etc can be removed.  All controls apart from those identified in the heads of agreement can be removed. The Parish Council has no on-going responsibilities other than the oversight of the lease  Hopefully this will involve removing items from the lease document
4) How we move forward
I do not envisage responding to a 44 page document.  We should meet with the solicitor and agree which sections should be removed consistent with the above statements.  We, the charity and the Parish Council can then review in detail the resulting much smaller document prior to signing.

Cllr Warren replied on the 17th November.

Dear Ray,
Apologies for not replying before but I have been marking time to see what the response of the other trustees might be.
I have seen no responses but knowing the need to move forward I will add my view for consideration at this stage.
1) Where we are – Your view is much as I see it and it is what I have always understood was intended.
2) Where we need to be –     Again we appear to be of a similar view.  I only envisaged the Parish Council retaining freehold ownership of the land.  That will more than cover the value involved.     Somewhere we need to ensure that there is a clause which recognises the ‘5 year’ commitment on the Parish Council as to use and so there must be a mechanism for the lease to be cancelled and everything handed back to the Parish Council in the unlikely event of no community use being achieved during the required period.
3) Benefits – I concur with the proviso I have included in 2) above re ‘use’ and the five year time scale.
4) How we move forward –    Once the solicitor has provided the ‘clean’ document as envisaged it can be reviewed and agreed by the Trustees and then presented to the Parish Council.  If there is any fine tuning needed it can be discussed and agreed quite quickly.  Hopefully it will be so simple and straightforward that there will be no need for the Parish Council to instruct a solicitor unless there is a legal requirement for it to do so. You may find it helpful to carry out work alongside this to firm up the final detail of use and also updating the Charity Business plan.
 
Regards.
Barry

The solicitor stated that as the buildings were on the land, they could not be ignored but that he could remove all of the commercial terms and make it as near to a land lease as possible.  This was agreed and a second version of the lease was agreed.  There were one or two small anomalies left such as how to charge 20% VAT on a peppercorn (I wonder who came up with that one?). Tony Mander and myself were charged with meeting the solicitor and resolving any remaining issues.  The lease was then reviewed by the Trustees (who were the Parish Councillors except Cllr Warren who somehow managed not to become a trustee). The completed lease was circulated again to the Parish Councillors in December 2015 and nothing has been heard of it since apart from the fact that a solicitor was commissioned by the parish Council.

Following the extremely high tenders received by developers for the refurbishment, a meeting was held to work out the way forward.  The decision was that a new build would be the most cost effective and allow us to not be constrained by the limitations of the existing buildings.  A proposal was put to the Parish Council community meeting to move the project forward. .

a) Following discussion it was proposed by Councillor Wilcox that the Parish Council support the
project by commissioning the new round of design and planning directly with the existing architect.
Councillor Mander seconded this proposal. A vote was held and Councillor Grantham voted
against the proposal, Councillor Phare and Councillor Warren abstained. The vote was carried.

b) Following discussion it was proposed by Councillor Mander seconded by Councillor Grantham
and unanimously agreed that Councillor Warren and Ken Wood would manage the relationship
with the Architects. ACTION: Cllr Warren & Mr Wood

c) It was proposed by Councillor Wilcox that Ken Wood would contact MDDC planning to obtain
advice on behalf of the Parish Council on changing the current planning application. Cllr Mander
seconded the proposal and it was unanimously agreed. ACTION: Mr Wood

We have a recording of the meeting and Cllr Warren clearly stated that he could support this proposal and indeed initiated the discussion on item b) and agreed to manage the relationship with the architect.  Why would he give his support and then abstain in the vote?  What is not in the minutes was that he then stated that the decision although passed by the meeting would have to go to full council for ratification.  This was not necessary as the committee had been given authority to manage the project totally.

What happened in practice was that he then proposed in the Full Council to pass the decision to a different meeting and we have never heard of it since.

b) Ratification of decisions made at Community Sub Committee 7 April 2016
Councillor Warren proposed that item 7b) also be deferred to be dealt with at the meeting on 15 April, Councillor Grantham seconded the proposal and all were in agreement.

This is called kicking it into the long grass.

A tale of 2 leases - lease 2

As stated earlier, the heads of agreement is an instrument to allow solicitors to communicate to meet an achieved goal whilst providing as much protection as possible for their clients.  Once the lease is signed, the heads of agreement become obsolete.

On (date) the Trustees were served with a new lease.  On examination, it was found to be a full commercial lease full of controls and with a demand that the Trustees sign away their Tenant rights. This was a complete U turn and had a large number of concerns for the Trustees.

• There was no discussion with the Trustees.
• The word "served" does not speak of an agreement - the word is normally used for legal notices such as County Court Judgements.
• It did not match in any way the heads of agreement which had been used to in the application to set up the charity.
• It was obvious that the Parish Council Solicitor had been given a different set of instructions.
• The lease was full of controls.
• There was a legal notice enclosed with the lease which was required to be signed so that the tenants rights would be removed and the lease would become non-renewable.
• On checking, the Trustees were advised by several legal people - two solicitors, one Barrister and a specialist legal advisor to the supreme court with extensive trust and charity law knowledge. Their advice was that they would be in breach of charity law if they signed the lease and that some of the clauses would put the Trustees at personal risk
• There are no references in Council minutes about the change of mind apart from some obscure references to changes to clauses.

The standoff

Despite all the requests to remove these clauses, the Parish Council have refused to change the lease.  There were some suggestions that the trustees paid a market ground rent rather than a peppercorn, the Parish Council might be able to "see it's way" to removing the non renewal clause.  It seems that the Parish Council has hijacked the project to turn it into a business opportunity for themselves. 

The trustees meeting with the Parish Council  9th January 2017

The following are commented extracts from the transcripted recording.  The full transcript will be made available

The partners of the Willand Pharmacy have clearly stated that they will require a renewable lease with an agreed term, and will not accept the exclusion clause.

Bramblehaies Surgery Practice has also informed the WH&CC that they will require a renewable lease with an agreed term, the details would be as advised by their legal advisor.

Ken Wood (KW) felt keeping the lease as it is could put the charity at odds with the charities commission and could be breaking the rule which in chapter 2 due diligence and verifying the end user. The Charity must not put their assets under any due risk. KW felt by signing the lease it would effectively signing the charity’s assets over to the PC at the end of the lease in 100 years. He felt this is out of scope with the charity’s rules and regulations. KW asked why the clause included.

(RU) so what is the problem with the lease?

The intent was to transfer the buildings to the charity and have a land lease only as seen above.  What has been provided is a draconian (Solicitor’s words not mine) full commercial lease  with tenant rights removed which means that the lease cannot be renewed.  A new lease could be drawn up to follow on from the first one but the termination of the old lease means that anything on the land would be transferred to the Parish Council even though it was an asset paid for by the charity. A renewable lease does not have this requirement and the assets revert to the Parish Council when the Charity has no further use for them and terminates the lease.
 .
It presents a number of problems

• It attempts to control the trustees by removing every possible decision they can make.  Compare with independence of trustees statement sent to the charity commission assuring them that the trustees would be truly independent and the control statement which follows further down
• If the charity needed to take out a mortgage, the requirements of lenders is that there must be between 75 and 85 years remaining on the lease with around 30  years remaining at the end of the mortgage.
• Conflict with Charity Law.  There are strong restrictions on charities transferring assets.  The transfer has to be to another charity and normally needs the written approval of the charity commission. 
  If the charity signed  a 5 year non-renewable lease with the Parish council, built a health and community centre, at the end of the 5 years, the building, erected using charity raised funds would become the property of the Parish Council.  This would not be allowed under charity law as the Parish Council is not a charity.  There is no difference in law between 5 years and 99 years.  Some Parish Councillors/Trustees took the view that we should sign the lease because "they would have to dig me up to prosecute me”.   This is hardly the moral high ground!

(Asked why the Parish Council had inserted the clause) Barry Warren(BW) advised it was because of legal advice. BW reminded everyone that we are a local authority so different to business. The constitution that was written for the charity means they are have no legal responsibility however Parish Councillors do have a legal responsibility. When dealing with a public property you must retain public ownership of it at all times.

(RU)  It would have been useful to know what the advice was and which of the heads of agreement it responded to. BW managed the charity application on behalf of the Parish Council and made the declarations he did so how can the above be true?
Trustees answer to the Charity Commission and there are well defined responsibilities and severe penalties for not following them.  If Trustees make decisions in good faith and things go wrong, there is some protection in the limited liabilities.  Additionally, the charity has the full business responsibilities defined for a Limited Company.  
BW and his solicitor need to understand the difference between legal ownership and beneficial ownership, the former being on the legal entry in the land registry and the latter the rights to enjoy benefit from the property.  The land is and was always intended to be legally owned by the Parish Council and no lease can remove the ownership of the landowner.

All the clause does it not allow an automatic right to renew. None of the comments received have said it is wrong they have all said it is unusual. It was even agreed that the PC solicitor acknowledged it was unusual.
   
(RU) The removal of tenant rights is intended for the temporary leasing of property  when there is a plan for the premises in the short term future.  This could include demolition and redevelopment of a site..  The charity spoke to a number solicitors who confirmed that this clause is very unusual in long leases.

BW expressed concerns of the current proposals of government funding for pharmacy’s how far this will go and if the NHS will continue to support the funding for a pharmacy in Willand. However the local plan clearly shows the shortage of doctors surgery’s in the area already adding in the proposed development of 259 houses in the village will increase the need. The freehold now belongs to the community of Willand and the PC have been advised to look after the asset. The lease provided by the pharmacy is a commercial property lease which is not what we are entering into.

(RU)  The asset has been given to the village not the Parish Council.  If the charity had been in existence, they would have purchased the site and got on with the building of these facilities long ago.

Nick Bartlett(NB) questioned transfer of assets KW clarified that the buildings the charity and built and managed at the end of 99 years would transfer back to the PC.

BW said the PC went to great lengths to make sure that the lease was right, because the PC want to see it go ahead. In March 2016 BW sent out a document headed reality check time. Stating what should be done since then not much has happened except we have spent £27,000 of public money got a lot of architect’s drawings and then the realisation that the figures that had been put around were unachievable. BW said on information the PC has received there is no reason for the trustees not to sign the lease.

(RU)This is a flippant piece of misinformation.  I don't recognise these numbers but for what we spent we purchased the site, designed the buildings, submitted an application for planning consent which was approved and then gained building regulations consent.  Only then could we go out to tender.  Yes, the quotations shocked us and that is because there were many new build activities in the area and developers did not want to take the risks associated with refurbishment.  You could infer from the comment that the money was frittered away – if that were so, then the Parish Council failed badly in managing the process.  In reality,  the parish council reviewed carefully every expense and Cllr Warren was part of it.  Why therefore is he trying to ridicule a Council of which he was a key part? 

There was a clause in the constitution keeping the PC in control overall. There is nothing wrong with PC being charities and BW has several documents as evidence of this. If someone left the PC then after 6 months they ceased to be a trustee unless they were voted back on for expertise etc. BW has been told that this clause has been removed even though WPC was not consulted on it.

(RU) This is untrue - there is no such clause in the constitution. Comparing the statement by Cllr Warren to the Charity Commission with the statement above, I believe that he knowingly provided false information to the Charity Commission on behalf of the Parish Council..  He knows that the Parish Council is not allowed to control the Charity but states above that he built the control into the constitution.

BW said we must do what we think is right for the community. Things need to be done right. He expressed concerns that if things are not done right then MDDC, DCC and Westhaven homes who entered into the S106 agreement would not go after the charity but they would go after the PC and we are therefore in the firing line for any breaches. It was always the wish that the PC would have an office in the new building.

(RU) Had the lease been signed as planned, the trustees would be liable if things had gone wrong as it was stated in the legal paperwork that all the conditions in the S106 agreement would be passed to the Charity.  Interesting that there appears to be great fear about being "gone after"
I don't know where the comment about the parish office came from!  In the new much reduced community centre which  we have had no sight of, I suspect that it will be a meeting room for the Parish Council.

BW questioned why the trustees moved the meetings away from the hall when they could be using the hall annex under the halls arrangement with the PC. FW said she did not think the hall would consider the charity to be the PC and the only reason it was moved was to save money as the Methodist church had agreed to let the charity use the facility free for a period of time.

(RU) What does it matter where the Trustees meet?  Are they not independent? 

KW said he would not like the charity to be a majority of trustees. KW read part of an email which was sent to the charity commission. BW said had been taken out of context and has since sent the whole email. The email was sent by BW on the instructions of the trustees he was only the scribe.

(RU)  This is a very serious comment - "I was only the scribe!  BW prepared all the documents including the charity submissions and the constitution which he claims to have added control clauses. Hardly the action if a scribe.  They were approved by the Parish Council, including BW, who made the application.

Just a few questions now...