The Terms of Reference for the Property Committee
The Property Committee will function as an executive group reporting to the Management Team that will apply their collective experience and knowledge of service requirements and property management, to vet and recommend or reject property transaction proposals. The committee shall operate in a manner that ensures an integrated, consistent and transparent approach in it’s assessment of HSE property transaction proposals and will recommend as appropriate, property proposals to the National Directors, DG or the HSE Directorate, in accordance with the current legislation and best practice for property transactions in the public sector.
The Property Committee will:
• Appraise property transaction proposals with reference to Corporate Plan, Service Plan, Capital Plan and agreed property protocols that also takes account of legislative requirements and relevant guidance.
• Make recommendations accordingly, to the persons designated in agreed HSE,property protocols.
• Oversee the work of the corporate property section. The corporate property section shall carryout routine preparation in advance of Property Committee meetings and follow-up as necessary to conclude the transaction process at corporate level. The corporate section shall maintain records of submissions to the committee and of the committee’s recommendation, decisions of Directorate, DG and National Directors.
• The Committee shall be responsible for co-ordinating an integrated and standardised best practice approach to corporate property issues and advise the Management Team accordingly.
• Contribute to the development of the HSE’s Strategy for Estate Management.
The Property Committee Composition
The Property Committee is an executive group set up by the HSE, Leadership Team that comprises of nominees from:
(a) The National Hospitals Office;
The Primary, Community and Continuing Care Office (2no. representatives); The Directorate of Finance;
The Estates function (3no. representatives). Note: At the time of development of this document Estates function operating under the direction of the Chief Financial Officer.
Other Directorates – nomination available when items of relevance are before the committee And
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Secretary to the committee
The frequency of the Property Committee Meetings will be determined by the Property Committee with reference to the volume of proposals submitted and ongoing workload of the committee. Committee meetings will not take place when a quorum is not available. A quorum requires that five members of the committee are in attendance. The committee will determine the minimum grade, qualifications and experience required for nominees and substitutes that may be required to attend from time to time.
The chairperson of the Committee shall be nominated by the Director General. The Estates functionshall supply the Secretary to the group.
The Secretary’s role shall be to co-ordinate the activities of the Property Committee, to keep records of the Business Cases submitted to the Property Committee and the recommendations made in respect of each, to keep and circulate minutes of meetings of the Property Committee, to draft any correspondence and keep records relating to property transactions, reviewed by the Property Committee, and other ancillary matters.
Chapter 5, Topic 2 ; Protocol for Acquisition and Disposal of Property… Continued
Schedule 4
Summary of the Provisions of Part 5 of the Code of Practice for the Governance of State Bodies (the “Code”)
The Code provides that it should be standard practice that the disposal of assets of State bodies like the HSE, or the granting of access to property for commercial arrangements (e.g. joint ventures with third parties), with an anticipated value at or above a threshold level of EUR70,000 should be by auction or competitive tendering process, other than in exceptional circumstances (such as a sale to a charitable body). The auction or competitive tendering process used should be both transparent and likely to achieve a fair market-related price.
Determining the anticipated value
The anticipated value may be determined by:
(a) the reserve price recorded in advance in the HSE’s records; or
(b) formal certification by the Director of the HSE with responsibility for financial matters or a Director who is a member of the Audit Committee of the Directorate of the HSE that, in his or her view, the anticipated value is likely to be less or greater than EUR70,000.
In determining market value, regard should be had to accounting standards best practice in Ireland. If an auction or competitive tendering process takes place and the highest bid is not
accepted
:
Specific Directorate approval is required before the disposal of the asset or granting of access to property for commercial arrangements with third parties can be completed. This approval and the reason why a lower bid was accepted should be noted in the minutes of the Directorate.
If an auction or competitive tendering process does not take place and the agreed price is EUR70,000 or more:
Specific Directorate approval is required before negotiations start and also before the disposal of the asset or granting of access to property or infrastructure for commercial joint venture arrangements with third parties can be completed.
No disposal of an asset or grant of access to property or infrastructure for commercial arrangements with third parties should be completed until:
The officer authorising the disposal or grant of access has certified formally that:
(a) Directorate approval is not necessary, and the reasons why this is the case; or (b) Directorate approval has been obtained.
Disposal of assets to Directors, employees or their families or connected persons “Families or connected persons” in this context means:
(a) a spouse, parent, brother, sister, child or step-child; (b) a company with which the person is associated;
(c) a person acting as the trustee of any trust, the beneficiaries of which include the Director/employee or the persons described in (a) above or the company described in (b) above;
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(d) a person acting as a partner of the Director/employee or any person or body who, by virtue of (a)-(c) above, is connected with the Director/employee.
These disposals should be at a fair market-related price. A record of all such disposals to such persons (including details of the asset disposed of, price paid and name of the buyer) should be noted in a register kept for this purpose (minor disposals below a threshold approved by the Directorate may be omitted from the register). This register should be available for inspection, if requested, by the Directorate or by any member of the Directorate. The Directorate may retain a requirement that any disposal above an approved threshold may not be made without having been formally endorsed by the Directorate. Such endorsement may be subject to any conditions or specific restrictions imposed by the Directorate.
Annual Reports to the Directorate and by the Directorate to the Minister
Details of all disposals of assets or grants of access to property for commercial arrangements with third parties (save for “Disposals of assets to Directors, employees or their families or connected persons” as discussed above) below the threshold value of EUR70,000 without auction or competitive tendering process should be formally reported, with the paid price and the name of the buyer, to the Directorate on an annual basis.
Details of and explanations for the disposals of assets or grants of access to property or infrastructure for commercial arrangements with third parties above the threshold of EUR70,000 which have not been subject to auction or competitive tendering process should be included in the Chairperson’s annual report to the relevant Minister.
The Chairperson, in the annual report to the relevant Minister should affirm that the disposal procedures, as outlined in Part 5 of the Code, have been complied with.
Chapter 5, Topic 2 ; Protocol for Acquisition and Disposal of Property… Continued
Schedule 5
Assessment of the Potential Future or Ongoing Liabilities of the HSE to pay Outgoings in respect of a Property, in particular Commercial Rates
1. General
On the sale or disposal of any property or property interest by the HSE, the legal procedures and documentation should ensure that all liability on the part of the HSE in respect of the property ceases as at the date of the disposal. The assessment of any potential future ongoing liability for the HSE to pay outgoings in respect of any particular property therefore really only arises on the acquisition of property, both freehold and leasehold. The Manager whose responsibility it is to run the proposed acquisition of the relevant property on behalf of the HSE should always as part of his/her preliminary enquiries in relation to the property ascertain the outgoings (in particular, any unusual outgoings) affecting the property e.g. most commonly the rent payable in respect of a leasehold property. These should be verified and all other outgoings affecting the property established in the course of the due diligence conducted in respect of the acquisition of property e.g., in the case of the property being acquired by means of the grant of a lease, by way of pre- lease enquiries and in the case of the acquisition of a freehold interest and/or the assignment of a leasehold interest, by means of raising appropriate pre-contract enquiries followed by standard Objections and Requisitions on Title.
Property acquired by HSE by means of Grant of Lease
While not intended to be an exhaustive list and the appropriateness of the enquiries will depend on the particular property in question, in order to ascertain the outgoings affecting the property going forward generally the pre-lease enquiries raised by the solicitor conducting the legal aspects of the transaction on behalf of the HSE should include the following:
Rates and Charges
What is the rateable valuation of the demised premises.
Please furnish evidence of payment of rates for the current year.
Please furnish on completion a letter to the Rating Authority notifying change of occupier. If the demised premises is subject to any other periodic or annual charge, give details.
Insurance
If the Landlord is insuring, furnish a certified copy of the Landlord’s insurance policy in receipt for latest premiums.
What will the tenants insurance payment for the first year of the Lease be?
Service Charges
Please furnish a summary or budget of the service charge for the first year of the term and the anticipated amount of the tenant’s contribution.
Please confirm the floor areas upon which the tenant’s contribution towards the service charge has been calculated.
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Please confirm whether there is a sinking or reserve fund in effect? If so please furnish details.
Is the Landlord or the service provider aware of any possible claim that will effect the service charge presently payable? Has any work been carried out or expenditure incurred or is there any proposal to carry out any work or incurring expenditure which would substantially affect the charge presently payable.
Freehold Property and Leasehold Property Acquired by Assignment of Leasehold Interest The standard Objections and Requisitions on Title numbers 14, 33 and 37 should be raised prior to entering into any contract in relation to the property to ascertain all encumbrances and outgoings affecting the property.
In addition for leasehold property, where it is clear that a rent review is due under the terms of the Lease, appropriate enquiries should be made as to whether the rent review has taken place. If so, a copy of the related rent review memorandum should be requested and furnished and if not, confirmation should be requested of the vendor that no steps have been taken to initiate the review. In circumstances where a rent review is due and pending and no steps have been taken to initiate a review, the HSE would need to take the advice of a competent valuer as to the estimated or projected rent due on review.