Disposal of Medina, 26 Seale Street, St. Helier.

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A decision made (20/10/2008) regarding: Disposal of Medina, 26 Seale Street, St. Helier.

Decision Reference: MD-PH-2008-0081
Decision Summary Title :	DS - Medina, 26 Seale Street, St Helier - Disposal		Date of Decision Summary:	09/10/2008
Decision Summary Author:	Paul Griffin – Principal Valuer		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	WR - Medina, 26 Seale Street, St Helier - Disposal		Date of Written Report:	09/10/2008
Written Report Author:	Paul Griffin – Principal Valuer		Written Report : Public or Exempt?	Public
Subject: 1484/1-3 Medina, 26 Seale Street, St Helier - Disposal
Decision(s): The Minister - accepted the recommendation of the Minister for Housing for the sale of Medina, 26 Seale Street, St Helier on the open market in accordance with those other properties being sold under Appendix C rather than in accordance with P6 2007 Appendix D1 “Planned Shared Equity and Outright Sales to Social Housing Tenants”; and approved the sale of Medina 26 Seale Street St Helier for the sum of £380,000 to E T Developments Limited.
Reason(s) for Decision: 1. Under Standing Order 168 (1) (a), 168 (2) (a) and (b) and 168 (3) the Minister hereby notified the States that he had accepted the recommendation of Property Holdings to agree to the above land transaction. 2. Under Standing Order 168 (5) the Minister hereby authorised the Attorney General and the Greffier to pass any contract which is required to be passed on behalf of the Public.
Resource Implications: The Housing Department will receive a capital receipt as identified above, whilst foregoing a rental in respect of the above property.
Action required: 1. In accordance with Standing Order 168 (3) this decision must be presented to the States at least 15 working days before the contract is passed. After the expiry of 15 working days following presentation to the States the transaction may be concluded. 2. The Director of Property Holdings is to instruct the Attorney General and the Greffier to pass the necessary contract, and to copy this decision to Chief Executive of the Housing Department, the Minister, Treasurer and Deputy Treasurer.
Signature:		Position: Deputy J A N Le Fondré Assistant Minister* MD-PH-2008-0081
Date Signed: 20/10/08		Date of Decision:

Disposal of Medina, 26 Seale Street, St. Helier.

TREASURY AND RESOURCES DEPARTMENT

PROPERTY HOLDINGS

Property Transaction for Ministerial Decision - Minister for Treasury and Resources

Proposed Sale of Medina, 26 Seale Street, St Helier

PG 1484/1

Purpose

To seek approval from the Assistant Minister for Treasury and Resources for the Public to sell Medina 26 Seale Street, St Helier in accordance with the Minister for Housing’s Decision MD-H-2008-0102.

Background

On 17th July 2007 the States approved the Social Housing Property Plan 2007 – 2016. In doing so the States adopted the proposition, part (i) of which required that ‘… a number of non-core, prime location properties, as detailed in Appendix C of the Social Housing Property Plan 2007 – 2016, should be sold on the open market’.

Further at part (ii) the States agreed that ‘the Housing Department should make arrangements to enable States’ rental tenants to apply to buy one of the properties listed in Appendix D of the Plan, according to the 10 year timetable specified, on a shared equity basis or at full value, and with first-time buyer conditions attached ……’.

Financial Implications

The property listed above requires expenditure in order to make the individual units fit for sale to States’ tenants; the Housing Department undertook only to sell homes that meet the decent homes standard to States rental tenants so as not to risk passing on large maintenance commitments to buyers. This is particularly important with flats where parts of the building structure might need to be owned in common or at least have legal processes and Articles of Association in place to take care of long term maintenance. A conservative estimate, undertaken on behalf of the Housing Department, of necessary expenditure for this property might be as much as £75,000. It is unlikely that existing States rental tenants who have expressed a desire to purchase will be able to consider this property. If sold on the open market, the property could be sold in their present condition avoiding the cost of unnecessary refurbishment.

This property has been valued externally both as potentially refurbished homes sold to States’ rental tenants and without any refurbishment for sale on the open market in present condition as follows:

ADDRESS

Value for

Shared Equity

Sale

Assuming Full

Refurbishment

And 100% paid

Sale on Open

Market

Assuming no

refurbishment

Cost of

Refurbishment

(estimated) to

meet Decent

Homes Standard

Difference

(benefits of open market sale)

Medina, Seale Street, St Helier

£430,000

£360,000

£75,000

£5,000

Preliminary advice from the Conveyancing Section of the Law Officers’ Department has indicated that the contract contains no restrictions which would create a barrier to open market sale.

Medina has been valued at £360,000 in accordance with the approved valuation policy MD-H-2007-0057. The valuation set is therefore valid until 12th November 2008.

On 23rd May 2008 (MD-H-2008-53) the Minister for Housing recommended that the property be put on the open market for sale at offers in excess of the valuation.

On 1st September 2009 (MD-H-2008-0087) the Minister for Housing recommended the sale of the property to Emma Jane Short and Thomas Muirhead jointly for the sum of £380,000. Miss Short and Mr Muirhead have since indicated that they wish to purchase the property in the name of E.T Developments Ltd. The price remains the same at £380,000 which is £20,000 over the valuation and will be a cash purchase, with no onward chain.

Conclusion

There is appears to be no benefit to the Public in the Housing Department incurring costs in refurbishing this property nor is it likely that any States’ tenant would be in a position to undertake the refurbishment. As such the most viable option is for its sale on the Open Market to allow the units in accommodation to be refurbished and brought back into use. The Minister for Housing seeks the acceptance from the Treasury and Resources Minister to the sale.

Recommendations

It is recommended that the Minister for Treasury and Resources approves:

The sale of Medina, 26 Seale Street on the open market in accordance with those other properties being sold under appendix C rather than in accordance with P6 2007 appendix D1 “Planned shared equity and outright sales to social housing tenants”;
the sale of Medina 26 Seale Street for the sum of £380,000 to E.T Developments Ltd;
and authorises a suitable contract to be passed before the Royal Court

Accordingly it is recommended that the decision of the Minister for Housing is accepted.

Written By: Paul Griffin

Signature …………………………

Authorised By: David Flowers

Signature ………………………… 09 October 2008