Purpose

This report concerns a request by the Council’s joint venture partner Related Argent for their plot development subsidiary RACAL IUK BXIP2 PLOT 14 Limited (RA), to take partial possession of the building (Core C) and grant under-leases within the Plot 14 development ahead of full Practical Completion of the new building. As residents are given one month’s notice prior to moving in, this will allow residents to move prior to Christmas.

The Plot 14 head-lease dated 17 October 2022 between (1) London Borough of Barnet (2) RACAL IUK BXIP2 PLOT 14 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 is not expected to achieve full PC until 1st December 2025, but RA's contract administrator (Cast) is in a position to confirm partial possession of Core C now and to provide the Council with a statement from Cast that it has determined, based on the information provided to it, that Core C of the building is deemed to have been practically completed. 

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.