Agenda item

The Committee considered a report of the Estate Team Leader which sought the Charity Commission’s authority to sell the long underleasehold interest in439 Middleton Road to remove a liability and generate a capital receipt for the Charity (in respect of the value of the long leasehold interest held by the Charity) and for the Council (in respect of the freehold reversion). The property was currently vacant, in a poor state of repair and was being targeted by vandals and needed substantial investment before it could be occupied.

Members were informed that 439 Middleton Road comprised of the freehold interest in a significant three-storey semi-detached building with associated land. The property was of a brick construction with part hipped slate roof and part flat roof. The rear elevation had a rendered finish, and the building was sub-divided into several smaller rooms on each floor accessed from a central staircase. The property had an internal area of 270m2 and sits within a site area of 345m2. The property was situated opposite Chadderton Town Hall in a mixed-use area approximately 1.7 miles west of Oldham Town Centre. A plan showing the location was attached at Appendix 1 to the report and photographs was attached at Appendix 2 to the report.

Members were advised that in 1946, Chadderton Urban District acquired the long underlease in 439 Middleton Road for a term of 927 years. According to the Minutes of a meeting of the Chadderton Urban District Council this leasehold property was acquired by the Chadderton Urban District Council as a result of one Mr Archie Brown providing the consideration as a gift to the Council for the transfer to the vendor of this property. It was also stated in the Minutes of Chadderton Urban District Council at that time that Mr Brown required that this property was to be used by the Council specifically for “old age pensioners and people of a like age as a meeting place for reading and conversational purposes”. As a consequence, the property was considered to be a charitable gift to the Council to be afforded the status of charity asset. The Council in its capacity as landowner then acquired the freehold interest in 439 Middleton Road and the adjoining property, 437 in or around December 1968. At the time of the acquisition, the Council as charity trustee ideally should have registered the underlease at the same time as the Council registered its own freehold but failed to do so it was believed to be an oversight. The Council would now seek to register the underlease at HMLR with the appropriate charity restriction.

Members noted that part of the property had been let as a minicab office, however it had been vacant since the end of the tenancy in April 2019. As the property was no longer generating an income, it generated annual costs of £7,400 in holding the property. There was no requirement for the property and the poor condition meant an estimated £500,000+ in investments required. It was therefore proposed that the property be disposed of via auction at the earliest opportunity. The Council also sought authority to sell 437 Middleton Road at the same auction to maximise the sale price in both cases.

However before the long leasehold interest can be sold the Charity Commission needs to be approached with all the background information in relation to the acquisition, occupation and use of this long underleasehold property in order to obtain a Scheme to confirm that the Property can be sold, in addition to endorsing the proposed method of sale and to alter the objects of the charitable trust to enable the net proceeds of sale of the underleasehold interest to be used for the purpose of grant funding and/or donations to local voluntary organisations who provide services or assistance to people or pensionable age. The Committee agreed to meet for an update on 20 April 2023 to approve in more detail the nature of the submission to the Charity Commission.

Options considered:

Option 1 – Dispose of the asset via auction at the earliest opportunity.

Option 2 – To retain the property.

RESOLVED that:

1.    the assets be disposed of via auction at the earliest opportunity.

2.    An update be provided to the Committee following the registration of the underlease.