In the interests of balance on the issue of the proposed sale of the freeholds of the Downland farms, here is the link to Eastbourne Borough Council website on the answers to many of the questions that have been raised about this proposal, and below is the legal review from Simon Boyle LLB, MA (Env Law), solicitor, on behalf of the campaign to prevent the sale.
Proposed Sale of the Downland Farms by Eastbourne Borough Council
Legal Review for Keep our Downs Public
In 1929 Eastbourne Borough Council (the Council) under powers given by The Eastbourne Corporation Act 1926 compulsorily purchased 4,100 acres of downland (about half of the entire area of the Borough) from the Chatsworth and Gilbert Estates.
Since that time the Council has retained ownership and the major parts of the land have been let on four farm tenancies: Bullock Down, Black Robin, Chalk and Cornish Farms. (See PDF of map Compartment 15 Chalk Farm, Compartment 10 Bullock Farm, Compartment 9 Cornish Farm, Compartment 8 Black Robin Farm.) These together comprise nearly approximately 2,900 acres.
As the freehold owner the Council has worked with the tenants to ensure that good environmental standards are maintained and that farming practices are sympathetic to native wildlife. The Eastbourne Downland Management Plan 2012-2017 shows in 76 pages the degree of management required to ensure the proper protection of these areas.
The Council now propose to sell the freehold of these farms (subject to the existing tenancies) in order to raise cash for development projects within Eastbourne. The Council through Cllr David Tutt, the Leader of the Council has stated, “the use of the land cannot change and is protected by 140 pages of covenants.”
A Land Registry search for one of the farms has shown only seven restrictive covenant s (at just over one page) that together propvide very limited protection for the land.
This paper will review the key legal issues relating to the sale including a review of the rights of preemption that the original owners, the Chatsworth Estate and the Gilbert Estate should the Council intend to sell the farms.
If the farms are sold their future becomes very uncertain. A commercial buyer will only pay the price suggested by the Council if it could obtain a level of income many times higher than the current amount. The value of the land will rise substantially if planning permission is granted for a development, including a change of use and so a commercial buyer would almost certainly wish to develop the land.
- The restrictive covenants
2.1 Obtaining copies of the covenants
The Council has stated that if the downland farms are sold then “the use of the land cannot change and is protected by 140 pages of covenants.”
So the first question is what are these covenants since the Council has not shown these on its website or at its offices.
The best that it has done is make a reference in the local paper, see Eastbourne Herald of 20.01.2017:
Where is the list of covenants available publically?
The information is available via the Land Registry at https://www.gov.uk/government/organisations/land-registry
However unless you are a property professional it is very hard to know what you have to do to find out this information. It is necessary to request office copies that cost £19.95 for each parcel of land searched. (So for a member of the public to get office copies for all four farms would cost nearly £80.)
This demonstrates a complete lack of transparency by the council in failing to put these up on their website.
We have obtained office copies for Bullock Down (Title number EB 3743).
There is a ‘schedule of restrictive covenants, which lists a total of 7 restrictive covenants (and taking up just over one page).
Here are two examples of these covenants:
‘ The Transferees will not do or permit to be done any act or thing on or about the property hereby transferred which shall be or may be or grow to be an annoyance nuisance damage or disturbance to the Transferors or the owner or occupier of any adjoining land and premises.’
Note in this covenant the Transferees are the Council and the Transferors the Chatsworth Estate.
‘ Not without the previous written consent of the Trustees (such consent not to be unreasonably withheld) to erect or build or suffer to be erected or built upon the premises any new or substituted building nor to alter the exterior of or add to the buildings for the time being on the premises.’
Because the Council has failed to provide copies of the covenants to the public, a request under the Freedom of Information Act has been made (on 14 Jan 2017 requesting copies of the 140 pages of covenants.)
2.2 The history and future of the covenants
The covenants, for the most part, were created when the land was compulsorily purchased by the Council from the Chatsworth and Gilbert Estates (together ‘the Estates’). Both of the Estates retained other land and the covenants were given by the Council (the new owner at the time) for the benefit of the Estates, as seen in the above two examples.
Should the farms now be acquired by either of the Estates under their rights of preemption then they would be entitled to have the covenants removed as specified by the Eastbourne Corporation Act 1926 First Schedule para 20 the property must be offered ‘free from all restrictions’. The Estates would then be free to sell on the farms without the restrictions which would enable them to sell at a higher price.
If either or both the Estates do not exercise their rights of preemption and the farms were sold on the open market then they would be sold subject to the restrictive covenants. However as we have seen the restrictive covenants would be for the benefit of the Estates and it would be up to them to enforce them. Once the Council sold the farms it would drop out of the picture since the covenants are not for the benefit of the Council’s land.
2.3 The Operation of Covenants
As noted if the farms are sold to the Estates under the rights of preemption then the restrictive covenants will be effectively ‘wiped clean’ so that they take them without restrictions.
If they are sold to other parties then the restrictive covenants would continue but the new owner would be able to negotiate their release with the owners of the dominant tenements ie the Estates. In addition the new owners could apply to the court or the Upper Tribunal (Land Chamber) to have them discharged or varied. For example, because the restrictive covenants are obsolete or do not properly benefit the dominant land.
2.4 New covenants under the Local Government Act 1982
As the local authority, the Council does have the powers to create new statutory covenants (both positive and restrictive) under the Local Government (Miscellaneous Provisions ) Act 1982 as part of the arrangements for the sale of its freehold interests.
The Council has not disclosed whether it intends to create any such additional covenants. [Note FOE request made by David Evans, see Eastbourne Herald letters 20.01.2017]. However any additional covenants are likely to impact on the value of the sale (as they would restrict the new owner) and so it is unlikely that the Council would impose any new covenants.
In its response to questions on the downland sale, (Eastbourne Herald 20.01.2017) the response to the question ‘ Will restrictive covenants affect the value of the land?’ suggests that they are not looking to create any additional restrictive covenants.
- The Eastbourne Downland Management Plan
We have reviewed the Eastbourne Downland Management Plan 2012-2017. This document assesses, in 76 pages, the value of the downland owned by the Council and asserts that ‘the whole downland area is considered to be of extreme importance for six main reasons.
One of these reasons is headed ‘Ecologically’ and states that ‘the area is extremely important for migrant and resident breeding birds and butterflies.’
It also states (p6) ‘If features of importance are to be maintained for future generations, then the management practices designed to maintain them must continue.’
The Plan divides the area it owns into 16 Compartments. Each of the Compartments has it’s own Management Actions and Future Aspirations. Here are two examples of such aspirations from the areas that EBC intends to sell:
‘In liaison with tenant, establish a programme for scrub management at Widgens Bottom, including the coppicing of scrub blocks and to limit pioneer woodland succession.’
‘Liaise with the tenant farmer to also investigate creating a backpackers camp site for walkers adjacent to the farm building complex.’
Appendix 3 sets out the Scrub Management Programme. It says that the Council ‘actively seeks to maintain scrub upon the downland and to manage it to provide blocks with a differing age structure and therefore a variety of habitats in a cohesive balance with grassland.’
It will be apparent that if the farms are sold none of these initiatives could be required or progressed by the Council. Approximately two thirds of the whole of the Eastbourne downland would be sold and any such initiatives would be up to the new owners who may have little regard for wildlife and concentrate on maximising the annual profit from the farms.
As these are all positive acts it is not possible in law to have these as binding covenants that will run with the land. (In property law only restrictive covenants ‘run with the land.’)
- The Aarhus Convention, public participation and the provision of information
The UK is a signatory (through the EU) of the Aarhus Convention (1998), a United Nations Economic Commission for Europe (UNECE) treaty.
The ‘Three Pillars’ of Aarhus are:
Access to information: all UK citizens should have the right to get a wide and easy access to environmental information. Public authorities must provide all the information required and collect and disseminate them and in a timely and transparent manner. This is primarily enacted in the UK under the Freedom of Information Act 2000 and the Environmental Information Regs 2004.
Public participation in decision making: the public must be informed over all the relevant projects and it has to have the chance to participate during the decision-making and legislative process.
Access to justice: the public has the right to judicial or administrative recourse procedures if there has been a breach of the Convention.
It is clear that throughout the Council has completely failed to adhere to the requirements of the Convention. The Council has been secretive and failed to make available information to the public, for example in relation to the restrictive covenants.
Indeed throughout the process it is hard to see how the council could have been more secretive in its approach. In October 2015 [check not 2016] the council made its initial decision to look at the sale of the downland farms but the report has not been made available to the public on the grounds that it contains ‘commercially sensitive information’.
We will be looking at making a reference to the Information Commissioner for the council’s complete failure in this regard.
The decision to sell the downland farms is of the utmost importance to the people of Eastbourne and indeed across the UK. A petition set up by Friends of the Earth currently has over 6,500 signatures.
- The need for proactive management
The State of Nature Report (Second Report, Sept 2016) shows that the UK’s wildlife is generally in a state of decline. For example 15% of 8,000 of our native species are now facing extinction. As owner of these four farms totaling nearly 3,000 acres, the Council is in the position where it can, by adopting good practices, play it’s part in stopping this decline and actively help native wildlife.
By not engaging in this vital process, the Council will be neglecting its moral responsibility to look after its local wildlife.
Even if the Council was to have restrictive covenants in force, that were adhered to by successive owners, it could do nothing to ensure that positive measures were taken for the benefit of wildlife or the people of Eastbourne.
This is particularly important now as climate change starts to take hold. In the whole of the UK, it is the South East that will be the most affected as temperatures rise and rainfall decreases. To prevent further loss of species active measures will need to be taken. One example would be the planting of certain drought resistant trees. The Council can only take such measures if it continues to own the freehold.
- Preemption Rights and Commercial Considerations
As noted above, the Chatsworth and Gilbert Estates have rights of preemption (essentially the right of first refusal), since they owned the farms before they were compulsorily purchased. The Council claim that the value of the farms is £15-30 million however this seems a very high figure given that all four farms combined give a net income of less than £60,000 (Eastbourne Herald 20.01.2017). This would indicate a realistic value far lower than that given by the Council. (The general rule of thumb for property value is 8 times the rental value that would give a total value of £480,000.)
Under the rights of preemption the Chatsworth and Gilbert Estates will only be required to pay the market value and they could surely argue that the real value was way below the £15-£30 million.
Commercially it would make sense for the Estates to buy the farms under their rights of preemption and then remove all restrictive covenants (which in any event were in their favour) and sell on for a substantial increase in sale from which the Eastbourne citizens would not benefit.
If a buyer were to pay the amount suggested by the Council (and it is likely that they would buy from the Chatsworth and Gilbert Estates) then such a buyer would seek a return on its investment far higher than the current return. Therefore any buyer will need to make fundamental changes to the way the farms are run to see a return on their investment. They would almost certainly look for changes of use. Likely examples would be the installation of a solar farm and/or planting a vineyard.
Because the farms are within the South Downs National Park there would be some additional planning restrictions but the protections afforded by National Parks are often much less than people realise. (I write this as a long term member of the Friends of the Lake District and the ongoing battles against developers that we have had in the Lake District.) All planning policy is of course now subject to the National Planning Policy Framework NPPF with its overriding objective of sustainable development.
The Council is proposing to sell off the public’s four downland farms. It claims that this will not affect either the people of Eastbourne or local wildlife primarily because there are ‘140 pages of covenants.’ The Council has not disclosed these covenants and its general approach has been secretive without transparency and contrary to the principles of the Aarhus Convention.
Under the preemption rights the farms must first be offered to the original owners, the Chatsworth Estate and the Gilbert Estate. Any restrictions on use such as restrictive covenants must be ‘wiped clean’ of the conveyance. These Estates could then sell on the farms without any restrictive covenants if they chose to do so. Given the poor return currently provided by the farms any commercial buyer would be looking to make substantial changes to the farms and a major development is a likely outcome.
The Council appears only to be thinking over the short term and disregarding the interests of the people of Eastbourne and the local wildlife.
We shall continue to work with the members of the public who are opposed to the sale of the downland farms as well as looking at legal options available.
Simon Boyle, LLB, MA (Env Law), solicitor
20 January 2017