Disposal of Residential Property at 1 Invervar Cottages, Glenlyon
Perth and Kinross Council · 2 September 2024
Back to Property Sub-Committee — 2 September 2024 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
PERTH AND KINROSS COUNCIL Property Sub Committee 21 August 2024 DISPOSAL OF RESIDENTIAL PROPERTY AT 1 INVERVAR COTTAGES, GLENLYON, ABERFELDY, PH15 2NJ (Report No. 24/240) Report by Strategic Lead – Economy, Development and Planning 1. PURPOSE The purpose of this report is to seek Council approval for the disposal of 1 Invervar Cottages, Glenlyon by sale at auction. The disposal exceeds delegated officer authority as detailed in this report. 2. RECOMMENDATION 2.1 It is recommended that the Sub-Committee: (i) Approves the sale at auction of 1 Invervar Cottages, Glenlyon for market value in compliance with the Disposal of Land by Local Authorities (Scotland) Regulations 2010. (ii) Agrees that should the property fail to sell at auction, it will be re- marketed for sale either at auction or on the open market. 3. STRUCTURE OF REPORT 3.1 This report is structured over the following sections: Section 4: Background/Main Issues Section 5: Proposals Section 6: Conclusion Appendices 4. BACKGROUND / MAIN ISSUES 4.1 In May 2015 Property Sub-Committee considered and approved a disposal process for the auctioning of surplus properties (Report 15/203 refers). The process established that where auction had been identified as the most appropriate method of disposal, Property Sub-Committee approval is required to proceed with the disposal at auction of properties valued above the delegated authority limit of £100,000 set out in the Scheme of Administration. 4.2 Auction is an established method of disposal for appropriate surplus properties which incurs lower fees than conventional marketing and disposal. It exposes the opportunity to countywide coverage with a binding deal being
Page 2
struck when the auctioneer’s gavel falls. Since 2016, the Council has successfully disposed of various surplus properties through auction with the full legal process of disposal being completed within the following 28 days. 4.3 The property at 1 Invervar Cottages is a two-bedroom cottage with living room, kitchen and shower room, all on the ground floor. There is a garden area to the rear of the property and an area of ground across the road from the property. Plan CRP367 is attached at Appendix 1 showing the outline of the property’s title. 4.4 1 Invervar Cottages is the only Perth and Kinross Council (HRA) owned property in the Glenlyon area. 4.5 The cottage has been vacant and listed as Non-Effective Housing Stock since 27 November 2023. It was declared surplus to the Council’s operational requirements on 9 January 2024 by the Housing Management Team. While the property remains vacant the Housing Service is required to undertake a physical property inspection every thirty calendar days to satisfy insurance requirements. Prior to this the property was let to one family for approximately 20 years. 4.6 The water supply to the property is a private supply which is treated by, and the responsibility of, Caledonia Housing Association (CHA). Throughout most of the previous tenancy there have been issues with the water to the property in terms of water quality and supply, which has been insufficient at times. The water supply is from an open source, a hill burn, and numerous contaminants can enter the water supply such as dead animals and faeces. In the summer months the water has been known to dry up, and in the winter, it is common for the inlet to be damaged by the flow of water and debris. Most recently the Housing Locality Team were providing potable water to the tenant, consistently for a period of 12 months. 4.7 The Housing Compliance Team has completed water sampling and testing monthly, and this has consistently indicated contamination over the last 12- month period. 4.8 Attempts have been made by Caledonia Housing Association (CHA) to address the current issues with the private water supply. CHA has considered the installation of a bore hole, but this was discounted as it was cost prohibitive. CHA was approached in terms of purchasing the property as they own the adjacent cottages. However, following various correspondence, CHA are also looking at the future viability of their own properties. 4.9 CHA have shared estimates for borehole installation costs which have been estimated to be between £7,750 and £29,500 by a reputable private water consultancy firm. This information has been shared with the surveyor who carried out the Home Report. 4.10 The Council had a similar situation regarding a private water supply to a rural Council tenancy in Chapelhill, Logiealmond, South Perthshire some years ago and disposed of the property by sale to the existing tenant. At that time
Page 3
advice was sought from the Council’s Legal Services and was provided as follows: Repairs or maintenance of dwellings let under a Scottish Secure Tenancy (SST) are dealt with under Section 27 of the Housing (Scotland) Act 2001, which in turn, refers to schedule 4 of the Act. The schedule specifically provides that the landlord in a SST must: (i) Ensure that the house is, at the commencement of the tenancy, wind & watertight and in all other respects reasonably fit for human habitation; (ii) Keep the house in such condition throughout the tenancy. In determining whether a house is ‘fit for human habitation’, consideration is given to the extent, if any, to which by reason of disrepair or sanitary defects the house falls short of the provisions of any building regulations in force in the area. The term sanitary defects includes ‘absence of adequate and readily accessible water supply or sanitary arrangements’. Additional advice was that the property in question did not meet the criteria of being suitable for a SST and reference was made to the repairs provisions within the Scottish Secure Tenants (Right to Repair) Regulations 2002, which set a maximum time for repairs completion of 1 day for loss of water supply and 3 days for partial loss of water supply. 4.11 Legal Services have restated this advice with regard to 1 Invervar Cottages, since the property does not have an adequate and readily accessible water supply. 4.12 This means the property is incurring void rent loss and there is no reasonable solution for this in the medium to long term future. At a time when the demand for social housing is extreme the decision to dispose of this property has been carefully considered. The costs of installing an individual bore hole/water supply and the ongoing maintenance of this would be disproportionately excessive. 4.13 As of 5 June 2024, there are a total of 83 applicants on the Common Housing Register who have requested a two-bedroom property in the Glenlyon area. Since the property consists solely of ground floor accommodation, normal practice would be to consider this for an applicant who had a medical need for accessible accommodation. Previous attempts to match the property removing this requirement have also been unsuccessful. The current weekly rent charge and therefore void rent loss for the property is £89.54 (including a Hard to Heat discount). 4.14 In line with the Disposal Consultation Framework for Housing Revenue Account assets, consultation has taken place with tenants in the locality of the property. Individual letters were issued outlining the proposal to dispose of the
Page 4
asset and asking that tenants contact us with any queries or concerns. At conclusion of this consultation, no further enquiries were received. 4.15 In preparation for selling the property a Home Report has been obtained and is attached at Appendix 2. The Home Report outlines the property’s repair requirements, gives the property an energy rating (EPC) of E, and provides an opinion of Market Value i.e. the price that was considered likely to be achieved on the open market. The Home Report survey does not test services or water, but it does reflect the information that was supplied to the surveyor with regards to the water supply as described in 4.6 and 4.9. 4.16 The Home Report states the Market Value of the property as £125,000. It will be incumbent on the Council as seller to divulge the fact that the water supply is problematic, and this could have a negative impact on buyer interest. 4.17 If the property is sold, the capital receipt would be reinvested into the Housing Service’s Buy Back Scheme. 5. PROPOSALS 5.1 It is proposed that the property is put up for sale by public auction through Shepherd Commercial Property Auctions with a reserve price set at 75% of the Market Value, in compliance with the Disposal of Land by Local Authorities (Scotland) Regulations 2010. 5.2 Should the property fail to meet its reserve, it is proposed it will either be remarketed at auction at a later date or marketed for sale on the open market with agents appointed as considered appropriate, under terms to the satisfaction of the Strategic Lead - Economy, Development and Planning and the Strategic Lead - Legal and Governance. 5.3 The Council is required to fulfil its statutory duties under Best Value as set out in Section 1 of the Local Government in Scotland Act 2003 (“the 2003 Act”). Relevant aspects of this duty include: Making best use of public resources, including land and property. Being open and transparent in transactions. Ensuring sound financial controls are in place to minimise the risk of fraud and error. Assessing the full financial consequences of decisions at an appropriate level before major financial decisions are taken or commitments entered into. Demonstrating responsiveness to the needs of communities, citizens, customers and other stakeholders, where relevant. 5.4 The benefits of disposing of the property are bringing to an end the ongoing costs in terms of inspections, insurance and council tax, and there will be a capital receipt. The property is in Band C for council tax which has an annual charge of £1,247.72. This is currently charged at 200% as the property is vacant, giving an annual council tax cost of £2,495.44.
Page 5
5.5 The sale of the property at auction, after a competitive bidding process, will comply with the Council’s requirement to fulfil its statutory duties in respect of Best Value and Best Consideration, and complies with the Council’s Disposal of Land and Buildings Policy. The property will be advertised by the Auctioneers to expose the opportunity to a wide market and the auction process will take place under the direction of a qualified Chartered Surveyor, ensuring good governance. 5.6 The date of the next auction is 17 October 2024. 6. CONCLUSION 6.1 1 Invervar, Glenlyon has been declared surplus to operational requirements by the Council due to the ongoing issues with the private water supply. It is recommended that the Council approves a sale at auction for market value in compliance with the Disposal of Land (Scotland) Regulations, and that if the property fails to sell at auction, it is remarketed at a future date for sale either at auction or on the open market under terms to the satisfaction of the Strategic Lead - Economy Development and Planning and Strategic Lead - Legal and Governance. Author Name Designation Contact Details Katherine Farmer Estates Surveyor (01738) 475000 ComCommitteeReports@pkc.gov.uk Elaine Ritchie Strategic Lead - Housing and Communities Approved Name Designation Date David Littlejohn Strategic Lead - Economy, Development and Planning 23 July 2024 APPENDICES Appendix 1 – Deed Plan Appendix 2 – Home Report pack
Page 6
ANNEX 1. IMPLICATIONS, ASSESSMENTS, CONSULTATION AND COMMUNICATION Strategic Implications Yes / None Community Plan / Single Outcome Agreement none Corporate Plan none Resource Implications Financial yes Workforce yes Asset Management (land, property, IST) yes Assessments Equality Impact Assessment none Strategic Environmental Assessment none Sustainability (community, economic, environmental) none Legal and Governance yes Risk none Consultation Internal yes External yes Communication Communications Plan none 1. Strategic Implications Community Plan/Single Outcome Agreement 1.1 Not applicable. Corporate Plan 1.2 Not applicable. 2. Resource Implications Financial 2.1 The net proceeds of the sale will accrue to the HRA fund in compliance with the Disposal of Land by Local Authorities (Scotland) Regulations 2010. A successful disposal will remove the corporate maintenance and running costs of the property. 2.2 The Strategic Lead for Finance and Business Support has been consulted. Workforce 2.3 There will be a saving in workforce resources and associated transport costs.
Page 7
Asset Management (land, property, IST) 2.4 The Strategic Lead, Property Services has been consulted on this report. 3. Assessments Equality Impact Assessment 3.1 Under the Equality Act 2010, the Council is required to eliminate discrimination, advance equality of opportunity, and foster good relations between equality groups. Carrying out Equality Impact Assessments for plans and policies allows the Council to demonstrate that it is meeting these duties. The Equality Impact Assessment undertaken in relation to this report can be viewed clicking here. This section should reflect that the proposals have been considered under the Corporate Equalities Impact Assessment process (EqIA) with the following outcome: (i) Assessed as not relevant for the purposes of EqIA. Strategic Environmental Assessment 3.2 The Environmental Assessment (Scotland) Act 2005 places a duty on the Council to identify and assess the environmental consequences of its proposals. This section should reflect that the proposals have been considered under the Act and Option 2 no further action is required as it does not qualify as a Plans, Programmes and Strategies as defined by the Act and is therefore exempt. Sustainability 3.3 Not applicable. Legal and Governance 3.4 The Strategic Lead, Legal & Governance has been consulted on the issues contained in this report. Risk 3.5 There are no direct risk implications arising from this report other than those reported within the body of this report.
Page 8
4. Consultation Internal 4.1 Colleagues in Property Services, Legal Services and Economy, Development & Planning have been consulted in the development of the proposals. External 4.2 As detailed in para 4.14. 5. Communication 5.1 Not applicable. 2. BACKGROUND PAPERS 2.1 Not applicable.