History/current position

· In 2008 Countryside approached the HRA and other parties to explore bids for taking over the freehold and thus responsibility of running the leisure centre and maintaining the open spaces

· The recession removed any interest by other parties

· It also prevented Countryside paying the dowry necessary for residents to maintain the land and thus complete the transaction

· HRA has become increasingly concerned about the escalating costs and seemingly poor management of the club

· The HRA has investigated and established the case for transfer and continued to pursue a means to effect this.

· At the same time and recognising the difficulties and time transfer might take, HRA has instigated a ‘Target £1000’ to improve efficiencies and control costs with the objective of securing an annual rent charge of circa £1000

 

 

Why effect a transfer?

· We need to protect the value of our properties:

· Well run and affordable, the open spaces, setting and amenities will add up to £50K to our properties – Christopher Russell

· People move here because of the club

· Without control and badly run, costs escalate and the opposite is true

· Owning the land removes the threat and uncertainty of any development proposals

· We control our future rather than face the inevitability of uncontrolled cost increases in the event of a major unforeseen expenditure

 

What are the options?

 

Do nothing

· If Countryside don’t transfer, strong possibility that maintenance will deteriorate, costs increase and club will become a financial liability

· Countryside sell club &/or land to someone else. Unlikely but makes the future uncertain.

We take it over

· Transfer negotiated poorly or run badly worse off & becomes a liability!

· Transfer negotiated well and run well everyone is better off

 

How do we ensure success?

 

Requirements for a successful transfer

· Financially advantageous

· Legally sound

 

Structuring the new company or trust to meet our needs.

· Financial stability

· Legally watertight

· Improve service to all residents at lower costs

· A positive asset when selling your house

· Exit strategy in the event of exceptional circumstances

 

Obstacles to the transfer

 

· Countryside will not transfer the club or grounds separately

· Whilst unable to currently pay the dowry Countryside are preparing an option to agree the dowry sum sufficient to maintain the land in perpetuity.

· Transfer of the club and land will take place subject to Countryside maintaining the land themselves at their expense until the dowry can be paid

 

Preparation for the transfer

 

· HRA has completed a detailed breakdown and analysis of income and proposed running costs to establish viability of running a new residents’

· management company

· A previous bid will be the basis of new negotiations

· Transfer of residents liability to pay to new company.

· Legal enforcement of payment

· Interest added for non payment

· All legal fees of transfer paid by Countryside

 

Requirements for land transfer

 

· Detailed breakdown and analysis of annual maintenance and other costs (PL insurance etc) based on 3 quotations

· A ‘dowry’ sufficient to yield amount to cover this and any anticipated costs

· All legal fees paid

· Legal responsibility accepted by Countryside for any future legal challenge relating to the transfer

 

Key Prospective Benefits

 

· We control the future

· Protected from risk of further building

· Separate club and open space

· Improved maintenance of land

· Control of annual rent charge

· Club becomes an asset

· Remove obstacles to selling house

· No additional liability

 

Summary

 

· The work we have done and the proposed structure ensures improved running of both the club and land

· Target £1000 introduces a focus for management for the first time

· Club fees will be less over time than under alternative ownership

· Holding shares in HRA Ltd does not create any liability

· You can refuse your share/s but by doing so you forgo any say in the running of either the estate or club

· Shares will only be re offered on the sale of a property

· Compulsory members rent charge is payable regardless of share uptake