Is the Council liable?

Question

My PC owns land with a stables. The unprotected lease was due for renewal for 1st June. In April's PC meeting, the Council resolved the terms and another unprotected lease was drawn up by a solicitor. In July's PC meeting, the Council was asked to pay a further fee to the solicitor in it's entirety (until now, the fees had been split 50:50 with the tenant). The Council asked why there was an additional fee and the Chair announced that on the 24th May, the tenant made demands to change the terms of the lease which they agreed to. These changes demanded installation of CCTV. The solicitor originally informed the Chair to tell the tenant they had no right to remain passed 31st May, but was instructed to draw up the lease in line with the demands - a stipulation for a "suitable" CCTV system.

The Chair believed the PC could get away with installing a cheap home security set up. To make matters worse, we're trying to get change of use planning permission to lease the stables, which means we can't find a new tenant (but the old one is allowed to continue on) and if the change of use fails, obviously the CCTV system is totally redundant. There may even be a stipulation in the planning rules that while the tenant is in place, no development of the site can happen, just maintenance of what's already there.

In the cold light of day, it's pretty obvious the deal is going to cost us at least what the rent brings in - money needed to pay for the loan used to purchase the land. Can the Council be liable in a breach of contract case if the lease was signed unlawfully? Technically, it's just as injured a party as the tenant. However, as I can't find anything online about a Council suing a Councillor, I guess this isn't possible and the buck unfairly stops at the Council.

Obviously not expecting proper legal advice here, just opinion and experience.

Answer 1

I’m no expert on this but in my experience of Councils it’s the tenant that pays the costs of drawing up the lease

Were the changes to the lease regarding CCTV voted on and agreed by Councillors?
Was the rent increased to cover the cost of the CCTV and data protection issues ?

Comments

Check the wording of the minutes of each PC meeting since the issue first arose. As Jules has highlighted, if the changes to the lease and the installation of CCTV are not included as an agreed resolution of the Council, the decision has not been made, and you can still change your minds. The solicitor can only act upon the instructions of the Council and the Chair has no authority unless previously delegated by an agreed resolution of the Council.

I'm not sure why you need change of use planning permission, but I presume you have a valid reason for this. Was this something you considered when you bought the land and what would be the implications of failing to obtain it?

Finally, I see no reason why a Council should be prevented from suing a Councillor who has acted illegally, resulting in financial loss to the Council. The petition to the County Court would be against the individual acting in their own capacity rather than as Chairman of the Council.

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Hey Jules,
Yes, I'm aware that typically in a commercial lease the tenant pays the full costs. Let's just say it's tradition for the council to pay half - I've got enough issues to solve with this! No, there was no agreement from any other councillors and no increase in rent for the CCTV. Councillors found out about this in the middle of July, the lease was signed 31st May. There was time (just) to call an extraordinary meeting between the demands coming in (24th May) and the date the lease was signed, so it has been done unlawfully.

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I know it’s not pertinent but out of curiosity what benefit is there to the residents in owning the land and stables
Also is there any connection between the tenant and any Parish Councillors’s

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Hey DavetheClerk,

100% for sure the terms were not agreed. The tenant only came up with them 7 days prior to the lease expiring. I've just had sight of the signed "side letter" which contains the provisions for the CCTV and the Chair has lied on this to say that there was a meeting on the 26th May in which the provision was agreed. There was a committee meeting on that date, but that committee had no authority to make that decision and such an item couldn't appear on the agenda if the new terms were only two days old. The tenant has therefore been duped into signing the lease themselves.

The reason for the planning permission was because it was previously a charity-run shelter, not a working livery. It was brought a couple of years back, before my time living in the village, but I doubt any thought was given to it at all. The loan repayments are £75k a year, £50k coming from the precept and £25k (just) coming from the rental of the stables and a couple of other buildings on the land. The stables are the single biggest income generator.

Thanks for the advice and thoughts on the Country Court.

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Good luck
I know a Parish where after “the powers that be” were overthrown it was discovered that some years ago they had committed to a 120 year lease  on very poor terms and can’t find any trace that it was ever agreed by the Councillors

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Hey Jules,
The stables are part of a 36 acre estate. The charity that owned it previously had a lot of interest in from developers, but all the plans got turned down by the District Council. The Council originally sold the idea as having a new "hub" to the community where there was a little bit of commerce, a little bit of ecology preservation and a handful of affordable homes and to prevent it being developed on. I have no doubt in my mind some 20 years from now, it'll be sold off by the councillors of tomorrow who won't want the expense and commitment.
Personally, I think it should be sold off in a highly controlled way in plots to residents for investment purposes. No build rights permitted, only sold to residents/with council approval etc. The money raised can then be invested to pay off the loan and kick start development and those that own a slice get a share of the profits. It's the only way I see it not being compulsory purchased or being sold off when money's tight etc. At the moment it's too difficult to get everyone to agree what size screws are needed for the bolts on the stable doors. It'll be interesting to see what will happen after next May's elections.

And "ouch" for that council with that lease issue!