FRCC has responded to the Consultation by the Highland Council on the Proposal to dispose of, by Lease, of Fortrose Caravan Park. The response may be downloaded HERE. Our response reads:
Common Good Fund Officer
Inverness IV3 5NX
1st November 2019
Consultation response: Proposal to dispose of, by Lease, of Fortrose Caravan Park
Fortrose and Rosemarkie Community Council:
1) Has no objection to a new lease being issued to the existing tenants provided that it can be demonstrated that the rent payable is the market rate.
2) Objects to the proposed 30 year lease and believes that there is no business case for a lease of longer than 10 years.
3) Believe that the consultation is unnecessarily limited by a failure to disclose the full terms of the proposed lease.
The following notes apply.
a) There is no doubt that the existing tenants operate a successful site and since taking over the lease in 2015 have made significant improvements to the site in terms of service provision.
b) The scale and cost of these improvements in relation to the rental income from the site will generate a short payback period and the investment was considered worthwhile by the existing tenants when they knew their lease had only 10 years to run.
c) There is no information available to Consultees regarding any future proposed investment by the tenants and no justification that any such investment would not payback within a short period.
d) In the absence of any justification for the necessity of a longer lease for investment purposes FRCC see no justification in the new lease being longer than 10 years.
e) The proposed lease is stated as including 5 yearly rent reviews to the higher of RPI or market rent. It is suggested that the rent be adjusted annually upwards in respect of RPI with a 5 yearly adjustment if market rent exceeds the escalated RPI adjustment.
f) It is suggested that the tenant could have additional security at five yearly intervals by being offered a five-year extension to their lease when they accept the five yearly rent review.
g) It is believed that the existing tenants “Bought” the remaining period of the current lease from the original tenant and subject to the unknown terms of the proposed new lease would like to similarly sell on their lease when they choose to retire. If this is correct then it indicates that the new tenant believed the site to be worth more than the rent asked by the Highland Council.
h) FRCC believes that any new lease should prohibit the sale of the remaining period of an existing lease to a third party. In the event of an existing lessee relinquishing the lease it should revert, in its entirety to the common good.