SECTION 106 CLAWBACK MAJOR 1 Definitions Additional Profit "Appraisal A" "Appraisal B" "Appraisal C" "Appraisals" "Development Costs" means the actual additional pre-tax profit of the Development Proposal to be calculated in accordance with paragraph B10 Proposal as referred to in clause B2 Proposal as referred to in clause B2 Proposal as referred to in clause B3 means Appraisal A Appraisal B and Appraisal C means the aggregate sum of the items of cost (as listed in paragraph B11) incurred or projected to be incurred in relation to the development of the Site "Market Recovery Scheme" means the Council's temporary measures in its approach to negotiating community benefits to help stimulate the local economy within the existing planning policy framework established by the Local Development Framework "RPI" means the all items retail price index compiled and published by the Office of National Statistics "The Total Cap" means the sum of ( pounds) and includes the sum of ( pounds) paid pursuant to clause.. of this Agreement The Total Cap shall be index linked to the date of payment by increasing the specified sum in accordance with the formula set out in paragraph 7.17. "The Valuer" means a valuer appointed jointly by the Owner and the Council and having sufficient expertise to carry out the Appraisals
Owners Obligations B1 To complete.within two years from the date of the Planning Permission as required by the Market Recovery Scheme to enable the Development Proposal to benefit from the Market Recovery Scheme unless despite using all reasonable endeavours within the two year period the Owner provides written evidence to the Council for approval and agreement (such approval not to be unreasonably withheld or delayed) that there have been unforeseen construction costs and these have made the Development Proposal unviable; or is unable to complete the works set out in clause B1 as a result of any unforeseen event beyond the Owner's control including but not by way of limitation war national emergency flood earthquake strike B2 Upon practical completion of the Development Proposal as certified by the Owner's architect or the equivalent thereof and agreed with the Council (or in the absence of such agreement as certified by an Independent Arbitrator) immediately commission Appraisal 'A'; or In the event of the Development Proposal not being completed within a period of months from Commencement of Development Appraisal 'B' shall be undertaken of that part of the development which has been completed at that time and shall include details of the projected estimated costs and sales for the Development Proposal to 100% to enable an assessment to be made of the Additional Profit (if any) B3 If Appraisal 'A' or 'B' reveal that the Additional Profit is equivalent to or exceeds the amount specified in the Total Cap then no further appraisal will be required; or If the Additional Profit does not exceed the amount specified in the Total Cap then Appraisal 'C' will be commissioned upon the actual sale rent or occupation of % of the net internal floor area of the Development Proposal if this level of occupation had not been achieved at the time when either Appraisal A or Appraisal B (as the case might be) was carried out B4 In the event that Appraisal 'A' 'B' or 'C' (as the case might be) as agreed between the Owner and the Council (or in the absence of such agreement the details agreed by an independent arbitrator) reveal that the Additional Profit up to The Total Cap that would have otherwise been required under the Council's Supplementary Planning Document "Planning Obligations and Affordable Housing First Review 2010" (less the sum of referred to in clause 4.1.1) shall be paid by the Owner to the Council PROVIDED
THAT this Additional Profit shall be used towards the delivery of in line with adopted planning policy B5 B6 B7 The Total Cap shall be index linked to the date of payment by increasing the specified sum in accordance with the formula set out in clause 7.17. The scoping of the content and process of the Appraisals shall initially be discussed and agreed with the Council and then submitted in writing for approval by the Council (such approval not to be unreasonably withheld) the scoping of the Appraisal shall be undertaken within 28 working days from receipt by the Council The Appraisals shall include: the Owner's certified details of all the actual or projected (as might be the case) Development Costs including receipts for all payments made the gross income from the sale rental or disposal of the Development Proposal on a unit by unit basis B8 B9 B10 In the event that projected costs or revenues are used in the Appraisals they will be based on evidence provided by the Valuer with the agreement of the Council Where a payment has become payable pursuant to clauses B4 it shall be paid to the Council within 28 days from the date on which the Appraisal has been agreed by the Council or by the Independent Arbitrator as the case may be The Additional Profit (if any) shall be ascertained in accordance with the following formula: AP = AR AC - % of the Development Costs where AP = Additional Profit AR = Actual or projected Revenue AC = Actual or projected Development Costs including the land acquisition cost B11 Development Costs are the aggregate of such items of gross cost borne in relation to the Site as may reasonably have been incurred in relation and incidental to the acquisition disposal development and management of the
Site or part of the Site until the date of any of the Appraisals such items to include but without limitation: (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) the cost of acquisition of estates and interests in the Site (to include any demolition stripping out site clearance works along with works of construction refurbishment or improvement) stamp duty land tax and Land Registry fees the cost of extinguishment modification or variation of any interests or rights in over or against the Site including (but not limited to) any break or other payment made to any tenant or licensee to terminate any lease tenancy or licence of the Site or any part thereof held by a person who by the lawful exercise of his powers could prevent restrict or impede the carrying out or progress of the Development Proposal or its use and enjoyment of the Site the cost incurred of acquiring additional land or rights for the improvement and enhancement of the development potential of the Site (excluding demolition costs as mentioned in B11) the cost of obtaining requisite planning permissions building regulations consents licences and approvals including previous permissions to carry out a development even if a development is not begun or for the improved use and enjoyment of the Site the cost of planning or other such obligations imposed by a competent authority as a condition of carrying out the Development Proposal or improvement of the Site including (but not limited to) all sums paid pursuant to this Agreement interest paid on loans or other monies to finance or fund the Development Proposal guarantee fees commitment fees procuration fees finance charges and brokerage fees payable in respect of loans and other monies to finance or fund the Development Proposal legal surveyors and other professionals' fees agency commission advertising marketing promotional expenses and other costs in connection with the matters referred to in the foregoing paragraphs fees paid to a project manager and persons providing management services and the cost of staff employed by the Owner exclusively for the performance of duties in relation to the Site rental deficit payments to a person under a forward sale or other funding arrangement
(xii) (xiii) rent payable by the Owner under a lease of the Site the cost of insurance of the Site (xiv) value added tax on supplies of goods and services relating to the Site to the extent that it is not recoverable by credit against output tax or repayment by the Commissioners of HM Customs and Excise (xv) any other costs expenses or charges reasonably incurred in carrying out the Development Proposal Council's Obligations C1 C2 C3 C4 C5 The Council hereby covenants with the Owner as follows: To review any of the Appraisals within 28 working days of receipt either to confirm that it accepts the Appraisal as fair and accurate or if it does not approve the Appraisal or any part of the Appraisal then it shall notify the Owner accordingly but if the Council does not so confirm or notify within the said period of 28 working days then the Council shall be deemed to have accepted the Appraisal If the Council notifies the Owner that any part of the Appraisal is not agreed by the Council within 28 working days of receipt of the same then either the Owner or Council may refer the Appraisal to an independent arbitrator for determination pursuant to clause 7.19 Upon agreement by the Council of the Appraisal (or as determined by the independent arbitrator in the absence of such agreement) if the Appraisal shows that there is no Additional Profit then the Owner shall be released from clauses B4 and B9 of this Agreement If expenditure of any one or more of the contributions required to be made pursuant to this Agreement has not been fully committed within fifteen years of the date of its receipt by the Council (including the Additional Profit) then the relevant contribution or any uncommitted balances as may be appropriate shall in each case be repaid to the Owner together with interest from the date of receipt by the Council until the date of repayment at the rate of the current Bank of England basic rate that shall have accrued thereon Section 106 Clawback.2 Major (RSN 9387)