Our Journey to Securing a 99 Year Lease: Part 2 ACVs, Leases and Co-ops

Yesterday I covered the research and findings into our 130-year-old history. Today I cover the actions we took to secure the allotments future.

ACV (Asset of Community Value) Under the Localism Act 2011 land or property of importance to a local community can be recognised and provided with additional protection from development. Voluntary and community organisations can nominate an asset to be included on their local authority's ACV register.

I had come across this relatively new statute in two other community projects and knew the value of registration. I established contact with the National Allotment Society to enlist their help and learn what experience allotments had with the new law. We were in fact one of the first allotments to seek this status which to date had been mainly taken up by real ale pubs! Today a growing number of allotments have registered as ACVs.

The Act only offers limited rights, but importantly puts a clear stake in the ground, such that the land can’t be sold, developed, repurposed, released without community consultation with the registered group who also have a right to bid. There is also a moratorium period which reduces the risk of being driven by other’s timescales and agenda. Importantly these rights are diluted if obtained after a development proposal has been lodged. It doesn’t impact the allotments rights under the 1925 statute but complements them. For ourselves it was a case of stating who we were, the historic value to community, the usage of the land, the benefits it gave al,l and importantly ensured the land was correctly identified.

Each council will have its own process and any application must pass several tests to be accepted. To say our submission was comprehensive is an understatement. We ensured we ticked all the relevant boxes and supplied a host of supporting material. The detailed ACV evaluation and grant by the Borough is available on our website www.iodadas.com/legal-and-other-refernce

The Lease: I discovered quite by chance that Mudchute Associates wished to extinguish their current 30-year lease early and seek a new and longer term. Our ACV gave us the opportunity to place a foot in the Borough’s door and seek our own lease arrangements and in doing so redress the debacle of 1994. I will spare the meetings, the elongated process that took place, having to explain the Allotment statutes and ACV to some who had not heard of either.

At all stages we were advised and supported by the National Allotment Society. The London Regional Representative also attended several our Borough meetings. The key breakthrough came when others dug their feet in to try to circumvent our involvement. We reminded all of the ACV and that brought everyone back to the table.

It was going to prove fraught and complex to hold out for a totally independent lease and we suggested the use of a Head lease with subleases under it. We had many detailed discussions over some very contentious issues. It was clear that this was a different type of lease with the Borough holding the freehold and certain liabilities directly with the allotments, whilst the head lease covered more of the farm business. Our sublease was to all intent was somewhat an independent lease with stronger ties to the freeholder and the head lessee who could take action against the allotments with the full backing of the Borough, who were still bound by the 1925 statute. To cut a long story short we agreed and signed off on formal terms of contract for a lease. It was to be 99 year minus one day, peppercorn rent, self-managed, recognised our statutory status and as long as we didn’t breach the lease, we were secure. We even got assurances re transfer of the Head lease and in the event that of the head lessee became insolvent, our sub lease would revert direct to the Borough.

The protracted discussions would not have achieved what they did without the free legal advice and support given by the National Allotment Society.

In June last year, the proposed lease framework for both the Head Lease and our lease was proposed to the Borough cabinet by the Mayor and passed. 

The Society mandate: We kept all members informed throughout the journey asked them to vote on the lease terms offered, the move to an incorporated entity, as well as the constitutional changes we needed to make. We needed to explain in detail the options, and specific steps. The votes taken involved all members and easily achieved the 75% threshold required within our constitution.

The Move to a Co-op: To hold a lease we had to be a legal entity. There were several options ranging from a limited Company, to an incorporated Charity, or even a Trust. None of these appealed. Limited companies can become fiefdoms and directors can become once removed from shareholders. A CIO (Charitable Incorporated Organisation) had an appeal over the CIC (Community Interest Company) but allotments aren’t charities and it was felt we would be abusing the ‘charity’ status. This was our opinion and we respected that many allotment Societies have taken these routes.

We were about to give up when the National Society pointed us to the new Cooperative opportunity under the new Co-operative and Community Benefit Societies Act 2014, which comes under the FCA mutual and society arm and not Companies House nor the Charity Commission. Our membership agreed that the mutuality of a Coop was the way to go and better still we could do this by going under the National Society’s sponsorship and template Rules.

However, we didn’t wish to adopt the template Rules agreed between the National Society and the FCA for sponsored entities. They would require several amendments to fit and every line you altered cost money and had to be sanctioned by the FCA. So, we had to get the mandate from the membership to transfer under the template rules then immediately apply to the FCA for our amendments with the associated formal approvals from our membership to be submitted and sanctioned by the FCA. Once a registered company, this two-staged process was free.

Again, we did it and got our FCA seal and formal approval on the amendments. The Rules are important and the FCA scrutinises and ensures that any Rule changes have followed due membership process and are acceptable under the cooperative mutual approach. We also got the new Rules approved by the Borough and Head lessee by adopting an open and transparent approach.

The hardest thing was moving the new Cooperative to a new Bank. Several banks were unfamiliar with the 2014 statute and did not accept our ‘not for profit’ status and wanted to charge us business rates to bank with them. Only one bank recognised our FCA seal and number straight away and after checking our documents, gave us free banking.

The journey was a hard one, took us four years but was well worth it. We are secure from the developers who are building on the land around us. We now have a very productive and new relationship with the Mudchute Farm that is delivering the obvious benefits we never had. We can now seek to build on our sponsorships and funding to help us with our environmental and community outreach projects. Importantly, those members who follow us now have security of tenure for their lifetime.

We just need to issue the member’s shares certificates and re issue member’s packs, but until the virus eases, that is on hold.

I hope these two articles help others understand what can be done and some of the options available. To date its cost us less than £100 in registration fees with FCA and Land Registry. I cannot stress enough the support, guidance and value the National allotment Society has given us.    

Our Journey to Securing a 99 Year Lease : Part 1 No Shortcuts

‘I am a bit confused; may I ask exactly what our relationship is with the Borough? If we pay rent to anyone for the land? And what the position is with our farm neighbours?’

I looked around the table to my fellow Committee members and awaited the clarity I sought. I was new to the Committee and as treasurer I needed to understand whether we had cost liabilities which I had not seen in the accounts. I also knew there was history, but being relatively new to the allotments, I was unclear what was fact and what was urban myth.

My questions received as many different answers as the number of members that sat around the table with me. What was clear was that no one knew with any authority what the answers were. This was some five years ago and since then we have taken a long and often frustrating journey to gain clarity, address the issues identified and be where we are today and in doing so securing our future for the next 99 years.

I realise all allotments are different, have different legal and commercial relationships with other parties, so some of this journey has been taken, or a different path pursued by others. However, I would like to summarise the steps we took and how we achieved what we did. In doing so I hope that some of what I share will help others to open the opportunities before them and have the confidence to take their own or similar journeys. This is not definitive route, nor is it meant to be prescriptive, but just a sharing of lessons learnt.

Research: It is impossible to understand where you can go unless you understand where you are and how you arrived there. Research might put folk off but unfortunately is part of the journey.

Our allotments are over 120 years old and have survived two World Wars where they not only fed many in the East End of London but being in the heart of London Docks, the whole area was subject to considerable bomb damage and lost records. On consulting old committee records and members, I quickly discovered many conflicting stories and many more questions that needed answers. Many of the records themselves were mainly paper and had not been well maintained and time consuming to review. There were many words but little substance to the answers sought. The Borough Archive Library was then searched, and it unlocked lots of information. As departments had changed names and references were often inconsistent or poorly indexed it was again a challenge to plough through Council minutes and papers. Newspaper records were useful but again often only confirmed what had been discovered.

I did unearth a comprehensive Council Administration book of record on the allotments which covered everything from 1947 to 1962. It detailed all minutes, AGMs, plot allocations, disputes, works. A great source of management information but more about day to day administration. I discovered several important council records which detailed department decisions and importantly those relating to the closure of the allotments and their reopening in the 60s and allocation of extra plots in the 70s.

We were able to conclude:

The earliest record was from 1892, the council took active participation in 1913, between 1913 and up to 1962 there were 365 plots covering the whole Mudchute managed by the Borough and under the freehold of the PLA (Port of London Authority). The PLA provided its own policing of the plots, which were surrounded by high fencing and had a manned controlled ticket access gate. 

  

In 1962 the PLA took back the land to extend the docks. However, it was clear from the records that this was not done fully in accordance to the statute and alternative land that was sought but even then could not be found. The rich Mudchute topsoil was sold off by the PLA. In 1965 and thanks to Lord Simon of the PLA and the then MP Dr Ian Mikado a small piece of derelict PLA land was given to the society as allotments. But this only gave us back some 30 plots. By the early seventies, the PLA had realised that containers were coming, and the docks expansion was a questionable move.

In 1978 we were given a further piece of land to accommodate a further 70 plots. This was initially established through the Borough and as part of the exercise we were granted full self-management and allowed to retain all rent collected. A year later the PLA sold the freehold of the whole Mudchute to the Borough and this in turn was managed by the new LDDC (London Docklands Development Corporation) which was established to transform and rejuvenate the whole Docklands area.

In 1994 a lease was granted by the Borough to Mudchute Associates who had established an urban farm on the Mudchute. The 30-year lease covered all the Mudchute including the allotments. The specifics of how this somewhat audacious move happened remain subject to many different viewpoints and what some would refer to as ‘minefield’ of council papers. The result was 24 years of soured relationships and ambiguity between the farm and allotments and what some may described as ‘sloping shoulders’ from the Borough.

The research and a host of formal questions raised to the Borough established that we were a statutory allotment, that they had not disposed of us in 1994 and that the lease they entered was unworkable with respect to the allotments. We could have left it there, but we didn’t want further ambiguity and wished to secure our rights and position going forward. There was no relationship between the allotments and the farm, no financial obligations and the allotments were not even mentioned, nor the land identified within the lease.  

This may have clarified the position of how we got to where we found ourselves and it did not address how we resolved the mess legally, amicably and rebuilt lost opportunities and secured our future.  

Tomorrow; the steps we took; ACV (Asset of Community Value) we were granted, the Society’s constitutional and tenancy rule changes we needed to make, the change to becoming an Incorporated Co-op and the 99 year lease we were granted.