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Lease Negotiations Update with HFC

Background

When HFC last applied for planning permission (with Croudace) to build houses on the land at the far end of the Holbrook Club sports field, we had agreed a lease with them (in 2013) to come into effect if both planning applications (at The Holbrook Club and at Hop Oast) were successful.

Included in that lease was the provision of a £200k contribution from HFC towards The Holbrook Club (THC) maintenance fund. The primary reason for this was acknowledgement from HFC that under the new lease THC would be taking on considerable maintenance obligations.

Unfortunately the planning applications referred to above were unsuccessful.

 The current dispute

Years later, HFC are now in a position to submit planning applications for what is effectively a similar scheme to the one proposed previously, albeit with some changes to the Hop Oast solution, as detailed in the County Times last week. Consequently, HFC entered into fresh negotiations with us about a new lease, as the land required for the houses is currently demised to THC.

From THC’s perspective, HFC’s new solution is effectively the same as their previous plans, therefore the lease we’d agreed with HFC just needed to be ‘dusted off’ and minor changes made to the detail such as the new developers name being inserted etc.

After much negotiation, HFC finally agreed to offer THC the 2013 agreed lease with one major exception. They were no longer prepared to fund the agreed £200k contribution towards the maintenance fund, citing inability to pay this, as the financials had changed with the new developer in place.

Clearly, it was unacceptable to THC to lose this contribution completely, as our maintenance obligations have not been removed. In an effort to bring this outstanding issue to an amicable conclusion, THC offered the following compromises:

  1. If HFC really couldn’t afford the £200k, then THC would be prepared to accept the contribution to be spread over the term of the lease, by a rent reduction of £8000 per year.
  2. Or THC would be prepared to accept joint responsibility (with HFC) for major repairs on the main pavilion.
  3. THC would be willing to negotiate on the amount of maintenance fund contribution (e.g. If HFC were getting 10% less from the new developer, then THC would accept a 10% reduction on the fund)

Disappointingly, HFC rejected all of these compromises, withdrew from negotiations and has purported to serve a Notice to Quit on THC (in relation to which THC’s position is reserved).  Notwithstanding the action HFC have taken, THC remains willing to continue negotiations with HFC to try and find an amicable solution.

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