Purpose

This report concerns a request by the
Council’s joint venture partner Related Argent (RA) for their
plot development subsidiary RACAL IUK BXIP2 PLOT 202 Limited, to
grant under-leases on individual residential units within the Plot
202 development ahead of full Practical Completion of the new
building.
The Plot 202 head-lease dated 17 October 2022
between (1) London Borough of Barnet (2) RACAL IUK BXIP2 PLOT 202
Limited and (3) the Related Companies L.P prohibits the head tenant
from granting under-leases until after full Practical Completion
(PC) is certified, without consent of the Landlord (i.e. the
Council as freeholder).
 
The building will not achieve full PC until
early-mid January, but RA's contract administrator (Cast) expect to
be able to confirm partial PC within the next 2 weeks and/or
provide the Council with information that Cast has determined is
satisfactory regarding the state of completion of the relevant part
of the building, and that is deemed sufficient for purchasers to
move in before Christmas.
 
The head tenant is fully responsible for the
property and its condition, and the Council has the benefit of
usual tenant covenants to protect its position as freeholder.
 
There is therefore very limited risk to the
Council in making this decision, for the reasons given in this
report, and so enabling the plot developer to grant occupational
under-leases to incoming residents.