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Venture into commons ownership of 176b High Street, Lewes, BN7 1YE

People In Commons CIC are working to bring 176b into a community vision

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The purpose of this document is to articulate the rationale behind the acquisition of 176b into ownership of Sam Jenner and James Gardiner.


The how:
James and Sam are proposing to borrow against the value of the above property. The current value is circa £400k + and Lauren needs to come off the deeds, having a 50% share within the property. This option enable a buy out to occur.

There are several questions that we are overcoming as this process unfolds.


In order to raise the necessary funds, it has been suggested from Karl that we might consider a let to buy mortgage, we will then be able to boro

1. Buy to let, what are the requirements from the lender:
The lender requirements will be set out in their offer. As the new owners on the deeds, Sam and James will transfer the equity from Lauren. The current equity transfer is £200k and we will also pay £6000 SDLT for this transfer.

2. As a buy to let, could the tenancy be transferred to an organisation ie. CIC or can it only be let as a residential ie. to a standard tenant?
The ongoing agreement that Sam and James have with either the CIC or the MHOS is not something that the lenders are especially interested in. James will need to become a resident in Lancaster Street if it is specified on the mortgage terms. However, the agreement the the Deed holders have with the CIC could be a peppercorn lease. The services then provided to the CIC will be agreed and that might include all costs associated with the property’s day to day operations: utilities, maintainence etc. This will be paid from the CIC to the deed holders or could be set up directly to be paid to the mortgage provider.
If the CIC is lent money by either of the Directors the CIC will be able to transfer that loan money back to the Directors at any point when the CIC is able to transfer. This can be an ongoing dance, with money lent each month and then paid back.
There could also be a retrospective planning application, if it becomes necessary, to change use to residential and social enterprise use, knowing that the owners are operating social enterprises from the site.
3. Can it be sub or partially let ie. James let's a room to a person.
Yes, this could be through a rent a room and how the CIC or MHOS operate is down to that enterprise.
4. Can we transfer the mortgage to the CIC
Ultimately we could consider the Charity structure for this transfer (once set up). As for the CIC, it will attract additional SDLT as a commercial venture and we would have to apply as a commercial entity, through someone like Triodos.
Triodos have previously said that they would lend at 75% of the value of the property, in this case, that would be circa £300k. The commercial repayments would also be at 3% higher than base rate and, for example, Ecology building society is around 6.29%.
5. How many people could we put on the buy to let mortgage.
With this, and considering the timeline, 2 would be advised but there are a few lenders who would be able to do the up to 4 on a residential. This would mean finding others to go onto the mortgage.

6. Is there a residential mortgage option?
No, because residential mortgages are based upon income not rental yields. Therefore we are restricted to the amount we can borrow unless we have more people on the mortgage.
7. If as an existing hse owner I went on to the deeds what are the tax impacts ie. Is there capital gains tax, additional stamp duty etc.
We will have to pay stamp duty on the transfer of the deeds, and that will be the amount that we pay to Lauren for her equity, which James and Lauren have agreed at £200k. £10k transfer has also been proposed by James to Lauren as a good will gesture.
So, the impacts for capital gains would only be on the sale of property, if, they were not as primary residence for one of the deed holders. Which of course is impacted if we transfer James’ place of residence. This does, from advice taken from Karl, not seem to be necessary for consideration. The terms of the mortgage could indeed be read that the property be let out, in which case, it is let out to the CIC, as laid out above, or indeed to the MHOS or indeed to the Charity (once set up) or this could be a complicate service level agreement with all organisations letting through the CIC. The operation enterprises, and I would suggest that the MHOS might be suitable for this, is that the CIC manage the lease and the MHOS provide the operations, as part of their agreement with the CIC. Then, as a member of the MHOS, operating under the MHOS tenancy agreement, James and others can become residents at any of the properties operated by the MHOS.

We have been driven to the brink of civilisation collapse, and in no way shape or form is this an answer that any of us seek, extinction. The mechanisms that have been enacted to drive us to this point can not be used to take us back from it. The capitalist machine has no reverse, there is no de-growth model within capitalism.
New thinking and new ideas of how we live and connect to one another are required for the transformation that we seek. It is in this thinking that we find our reconnection to each other, our communities and the environment. It is here that Community wealth becomes the focus, building a basis for the redistribution of resources, ensuring cohesion through collaborative thinking, practices and processes.

The what:





The intention of this AllSpace is to enable FFS to demonstrate the ‘why’ and the ‘how’ structures need to be created to operate in the existing social economic conditions. Through welcoming people into this space we intend to continue to strive for this new way of thinking about community design.

An AllSpace provides a space to begin the process of transformation. It is a journey supporting interconnectedness, directly working to address the question of why we are trying to operate independently from one another. The process of life is not independent from us, we are within the journey, the interactions we have and the actions we take are all imbricated in the fabric of our environment.

Multi-use environments have been conceptualised and established through cooperative thinking, an example of this would be a town market, with individual sellers operating within one space. AllSpace is simply an application of this thinking within a community wealth process. Rather than individual sellers, users or owners, we become one, multifaceted entity, operating for the purpose of enabling and enriching the lives of those around us; living, learning and growing better together.

Whether it is a dwelling, craft workshop and a coffee house, a restaurant and an education facility or all of the above, the common thread is to afford space and time for the enactors of these services to become entwined within the community they are part of. The change of thinking within an AllSpace is one where the relationship between those who engage with it are rooted much deeper than that of an owner and a tenant or a vendor and a consumer. It becomes a space which facilitates community interaction, a learning space, a talking space and a space to connect with each other, mutually respecting and valuing each others contributions to the community and environment we are part of.
Participating in this space is a broad section of the community and they are the ones who enable it to happen. The operating cost of the space and the development of it is spread across those who use it. Not only on a transaction by transaction basis but through a community commitment. Ensuring that the space is enabled by the community for the community.
As individuals use the space, they are invited to take on commitment to the space, not that they will forsake all other spaces, but that they invest in it to thrive, committing to the space to be used for community wealth opposed to individual gain. Because this is a space for the community, all operations are not-for-profit, they simply work to employ and develop the space, the community are assured that the space is not a commercial venture but a community facilitator. The community, through the success of the enterprises that operate, now become the facilitator of further AllSpaces, and, as more people use and make the commitment, the more community wealth is generated. These spaces become transformed into enterprises that facilitate communities to entwine and develop together.
With the Lewes common house, the acquisition of the freehold value is likely to be around its market value of £450k. Our previous attempt to acquire the freehold was rejected early 2022, when we offered £525k. With retrofitting estimated around £50 to £100k. With this space we also have an opportunity of transferring the residential into community ownership.
In order to set this all in motion several processes need to occur:
Raise funds to purchase freehold (£450k) and buy out LC (£260K)
Retro fit space (£50-£75K)

AllSpace: transformation through community collaboration

The why:
We believe in community, that we can live, learn and grow better together. We believe that non-hierarchical power is a basis for strong, functioning and resilient communities that are able to benefit everyone, unencumbering them to become the best that they want to be, whilst supporting them to achieve a low impact lifestyle which will reduce stress. We believe that it is still possible to adapt, transform to bring about this positive change.

The idea of individual ownership, individual use and disconnected industries is one that has been driven by a focus upon consumerism, in turn by the fundamental underlying principle of capitalism, continuous growth and a need to generate continuous profit, that capital is continually greater than the labour and resource input. In a world that has finite resources, this is neither sustainable, ethically just nor equitable.

Timeline for the fruition of 176
1
Raise finance
Liaise with vendor to negotiate market value and acquisition
Arrange for conveyancing
Discuss options with Third Sector
Apr 2024
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Raise finance
Month
TodayFit
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Tasks for acquisition
1
Title
Start
Duration
Description
Person
1
Raise finance
09/06/2024
30 days
Mortgage offer required from Karl at create finance
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2
Liaise with vendor to negotiate market value and acquisition
10/08/2023
40 days
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3
Arrange for conveyancing
28/08/2023
28 days
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4
Discuss options with Third Sector
29/08/2023
15 days
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There are no rows in this table
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Because we now have a wide community commitment to this concept we also distribute the weight for the success of the enterprises, we have collective knowledge and resources for support and operate now as a Community Action Network (CAN). This CAN will evolve and adapt to the community needs, it will morph and entwine, it will create its own ecosystem. It is this process that can not be controlled and it is the cause of the failure of most enterprises, trying to forge something to ‘fit’ when the fit is both unknown and constantly changing.
The most beautiful example of this in operation is our environment itself. What we are witnessing now is the impact that anthropocentric systems that are causing war, famine, ill health and community breakdown. It is these systems, their rigidity, their one fit approach, that either need to change, or, as we are realising, mass extinction occurs. The balance within our ecosystem has been pushed and our environment is adapting. We either adapt with it, transforming the way in which we fundamentally operate, or life will become increasingly harder for our species to exist at all.

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