Heads of Terms Agreement by hdv14129

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									      Development Agreements

                  Mark Newstead



29th March 2004
                  Introduction
• The DoH requires a contract
  between LA and its RSL partner
• DoH is non prescriptive on terms
• DoH requires an appropriate
  agreement
• Agreement needs to work for the LA
  and the RSL


29th March 2004
                          Outcomes

• Protect public funding
     – Probity
     – Value for money
           • Costs and grant
           • Design and specification of building
     – Long-term availability of asset
           • Nomination rights
           • Affordability – e.g. rent levels
           • Change of use


29th March 2004
                        Outcomes

• Create a contract
     – Define actions and responsibilities
           • How and when is grant paid?
           • Who determines when the project is
             complete and how?
     – Protect both parties interests
           • Legal agreement
           • Rights and remedies
     – Clarity


29th March 2004
                  Possible Options
• Investment Contract
      – Agreement to provide a grant to a project
• Building lease
      – Only appropriate to LAs transferring land
      – Combines grant and land transfer agreements
      – Allows the LA to retain the long-term interest
        in land until completion



29th March 2004
             Sample Heads of Terms
•   Particulars
•   Definitions
•   Demise of the land (land transfer)
•   The Development
      – Define
            • Accommodation schedule
            • Approvals and variations
            • Standards and requirements


29th March 2004
             Sample Heads of Terms
• The Development (cont.)
      – Programme
      – Procurement
            • Probity
            • Local labour
            • “Egan” compliance
      – Approvals and certification
• Transfer of the Land (if appropriate)

29th March 2004
             Sample Heads of Terms
• Tenancies
      – Approved agreement
      – Rent levels and increases
      – Nominations
• Association’s covenants / undertakings
• LA’s covenants / undertakings
      – Payment of grant
• General covenants / undertakings
      – Approvals and variations
29th March 2004
             Sample Heads of Terms

• General covenants / undertakings
  (cont.)
      – Rights in the event of default
      – Long-term use of facility
• General conditions of development
• Dispute resolution
• Schedules

29th March 2004
              General Considerations
• Funders’ Requirements
      – Agreement must not prohibit RSL’s ability to
        raise finance
• Things go wrong !
      – Flexible and robust agreement
            • Ability to handle changes to the project
• Partnership
      – Reflect the spirit of the relationship

29th March 2004
              Thank you for listening.

                  Now over to you !




29th March 2004

								
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