Decision details

The Cabinet considered a report of the Director of Economy that sought to confirm settlement to a Notice that had been issued by ForHousing on 28^th September 2022, notifying the Council of purported breaches of the environmental warranties in the Transfer Agreement between the Council and Villages Housing Association in 2004. 

Members were advised that the Cabinet had approved the disposal of land at Fitton Hill to Countryside in March 2020.  The land was being sold in partnership with ForHousing who owned 43.28% compared to the Council’s 56.72% holding.  Sales proceeds were split accordingly. Countryside had reserved the right to complete further Site Investigations and to revise the offer accordingly.  An independent report by Savills was commissioned by the Council and ForHousing which confirmed these additional costs were reasonable and justified.

Part of the land which ForHousing had sold was formerly owned by the Council. This land was acquired by The Village Housing Association Limited from the Council in 2004 via a small-scale stock transfer. In the relevant transfer agreement, the Council had provided a warranty to The Village Housing Association Limited which effectively confirmed that there was no contamination in the relevant land. In 2019 The Village Housing Association Limited merged into City West Housing Trust, which was renamed ForHousing Limited.

Options/alternatives considered:

Option 1 – Settle the Claim. Based on the information above, the Council provided a Warranty when the land was transferred to Villages in 2004. Now that the sale to Countryside has been completed, the claim against the Council has been crystallised. The quantum of this claim had been independently verified as accurate.

Option 2 – Challenge the claim. The Council had no grounds to defend the claim and would only incur additional legal costs should this option be pursued. 

Resolved:

That the Cabinet would consider the commercially sensitive information contained at item 17 of the agenda before making a decision.