Tuesday, 6 September 2016

Now Barham Community Library faces difficulties

We have already covered the threat to Preston Community Library and allegations from the volunteers that Brent Council leader Muhammed Butt has broken an election promise, now the Council is in conflict with Friends of Barham Library (FoBL).

Tomorrow the  Barham Trust will consider a report (extract below) which gives details of a dispute over a rent free period and the fitting out costs for a community library:
The Trust Committee decided to grant the lease in respect of Unit 4, The Lounge, to The Friends of Barham Library (FoBL) at its meeting on 8 October 2015 on the general terms set out in the marketing particulars and the specific terms offered in the bid submitted by FoBL. The marketing particulars did not offer a rent free period. Nor did the bid submitted by FoBL propose a rent free period for the first year of the term of the lease.
Subsequently, during the lease document preparation process, the FoBL requested a rent free period. The FoBL argued that the Vets had been offered a 12 month rent free period and therefore in the interests of fairness they should be offered the same terms. The FoBL also relied upon the fact that in order for them to operate their library services they would need to incur substantial fitting out costs.
Consistent with the Trust Committee’s decision, the Heads of Terms prepared by the Council and dated 19 January 2016, and which the FoBL agreed, did not include a rent free period. However, a draft lease prepared by the Council in March of this year inadvertently included a 12 month rent free period. According to the FoBL the inclusion of a rent free period was not a mistake. They argue that they asked for it and it appeared in the lease and therefore it has been agreed and they have relied upon it in good faith and to their detriment ever since.
The Council would maintain, however, that a rent free period has not been agreed. It was obvious to officers that the basis upon which the Trust Committee decided to grant a lease to the FoBL did not permit officers to forfeit rental income totalling £7,000. In the circumstances, there can be little doubt that officers had neither the actual or ostensible authority to do so.
The officers concerned have confirmed that a rent free period had not been agreed and the extensive correspondence between the Council and the FoBL bears that out. The inclusion of the rent free clause in the lease was a mistake and when it came to light, albeit some months later, the FoBL were informed.
The Council’s Heads of Terms were expressly marked ‘without prejudice’ and ‘subject to contract’. Although the draft copies of the lease were not, in accordance with legal convention and general legal principles, they did not need to be. A draft lease, contract etc. has no legal force and is not legally binding during the drafting process. It becomes legally binding upon its completion. If a prospective tenant chooses to incur expenses and changes their position on reliance of a draft lease, they do so at their own risk.
The various Units at Barham Park have been let individually and subject to different letting processes and terms depending on the different commercial and other considerations unique to that Unit. The contention that FoBL should have a rent free period just because it has been approved in respect of a different Unit is not sustainable. Different terms for different Units do not amount to unfairness.
FoBL competed in an open competition in order to realise their ambition to take up occupation of the Lounge. A rent free period was not on offer and no such concession was requested prior to the acceptance of the successful bid submitted by FoBL. In these circumstances, it is incumbent on all bidders to anticipate start-up and running costs in any bid submitted to ensure that bids can be assessed on an equal footing.
In the circumstances, the Trust Committee need to consider whether to grant a rent free period to FoBL and, if so, for how long. This is a matter for the Trust Committee to decide consistent with the Council’s obligations as trustee which include acting in the best interests of the Trust and in accordance with its fiduciary duties. The Council also has to act in accordance with public law principles.
Whatever the technical legal arguments, as the Trust Committee will appreciate, there is considerably more at stake. The letting of the Lounge has already been a protracted process demanding a disproportionate amount of resources both at Trust Committee and officer level. Any further delay will only add to the costs incurred by both the Council and the FoBL.
If the Trust Committee were to agree to the request for a rent free period, the Trust would suffer a loss in rental income. The amount would of course depend on the period. A 12 month rent free period would cost the Trust £7,000.
In addition, the Trust Committee should note that during the lease negotiation period, the FoBL sought permission “to move items in for storage” because they had to vacate their former premises. This was allowed and since then, in preparation of their occupation, FoBL have already incurred fitting out costs. This, they would argue clearly evidences their commitment to complete the lease and ensure they can be up and running without any further delay.
That being the case, it is equally important from the point of view of the Trust that the impasse between the Council and the FoBL is resolved once and for all. It is suggested that the FoBL be given the opportunity to complete a lease of the Lounge on the terms set by the Trust Committee by no later than 16 September 2016. If the lease is not completed, it is suggested that the offer of a lease to the FoBL be withdrawn and that the Trust’s Property Adviser be authorised to review the other bids received in 2015 and return to the Trust Committee with recommendations

You may think fair enough, independent Trustees will be able to adjudicate but all the Trustees are members of the Brent Labour Cabinet and the chair is Margaret McLennan, deputy leader of the Council.

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