Buyer for PC land decided upon - then a new and higher offer comes in

Question

The Parish Council is selling a small patch of land. It basically came down to a fight between two neighbours. Neighbour B offered the most and it was agreed by a majority vote at a full Parish Council meeting (in a private session) to accept her offer. Neighbour A have now come in with another offer above the one that the PC had accepted. Neighbour A claims the PC is legally obliged to accept the highest offer. Neighbour A also demands to view the (Zoom) recording of the extraordinary meeting at which the issues were debated in an open session. This was the meeting preceding the one at which the decision was taken to go with Neighbour B. What should the PC do a) about the new offer and b) the demand to view the recording?

Answer 1

Not being an expert I would have thought that the whole thing revolves around the terms attached to the sale by the PC's direction. Was it a publicised as a tender to buy in sealed bids with a stipulation of accepting the highest offer.If so then there would be no need for PC discussion over who got the land as this had already been discussed and decided by the PC before tenders were sought. The PC has an obligation to obtain best value when disposing of assets. On the other hand if it was handled as an auction with invitations to offers then a time limit would have to be imposed by which time several bids can be made by parties involved with the final bid would be winner.

As with most things the devil is in the detail and a smooth trouble free transaction can only be achieved by the PC doing their homework before hand.

Answer 2

I agree with Mentorman, how was the sale advertised and what was the deadline?  otherwise this is gazumping.

Comments

Thanks for those replies Mentorman and MrsAbster ...the situation has moved on. We set a deadline for yesterday noon for sealed and final bids. Before that Neighbour B dropped out claiming they were appalled at the process. Neighbour A offered an amount less than they had a few days before and less than B had offered originally. It could be argued that through their manoeuvrings A has engineered a situation to bring the price down so the Parish Council would have been justified in going with B's offer and ignoring the higher offer from A that came in after B had been informed that they had been successful.  Incidentally the advice I've received is that even after a sealed bids process and a deadline, should a higher offer come in after the deadline the PC is still obliged to accept it !! The law is not at all helpful in this situation.

Answer 3

I have quite a bit of experience of these types of situations.

Firstly you absolutely do not have to provide Neighbour A with any recordings or information. The meeting was correctly held behind closed doors. Even if a FOI request was submitted you can simply reject it for the reasons above. The only action open to Neighbour A is to take the council to court, but in order to do so they must have a case to argue and the onus is on them to prove there’s a problem. If this doesn’t happen the case is unlikely to be heard.

In relation to what do going forward is a little muddled, here’s why.
You’ve voted at a full council meeting to accept the offer from Neighbour B. This means the vote is legally binding. The only way to change this is for 2 or more Cllr’s to call an extraordinary meeting or wait for the next full council meeting and call the vote back in. There should be clear justification for this though.

The council should also be aware that it should be obtaining the best price possible for any assets and services. Therefore the higher offer from Neighbour A should perhaps be considered and form the opinion whether or not you wish to call the previous vote back in to.

However if you have had the land appropriately valued and you have achieved at least the value of the land from the current offer then that is justifiable, you are not obliged to accept a higher offer.

Essentially though until any contract is signed you are permitted (subject to the council retracting the vote) to accept some gazumping someone else. For anyone who’s gone through gazumping it’s a heart ripping process and can be seen as brutally unfair but it is not illegal.

Comments

Thank you ChloeWright ....your comments are very interesting.The situation has moved on and become very messy and contentious. You say that we do not have to provide a recording of the meeting but my soundings indicate that we have to when the discussions took place in an open session. Obviously anything that takes place in a confidential session we don't have to make available. Incidentally it's worth being aware that any member of the public attending a Parish Council meeting can livestream the meeting on Facebook and does not even have to seek permission from the PC or other members of the public attending!

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Hi Clerker

Thanks for the update. The information that would have been discussed is likely to have been considered sensitive information and therefore should have been done ‘behind closed doors’.

It’s worth seeking some legal advice on this because it can be redacted I’m sure. Obviously if someone external did view the meeting then it’s kind of pointless.

However you categorically do not need to bow to pressure from the secondary bidder to provide information.

Your local association should be supporting you on this and a legal advisor.