Long Leases at Dublin City Council

(d)  Long leases
The City Council at its meeting in Feb. 2012 recommended that the matter of long  leases
be referred to the Economic Development, Planning & International Affairs  SPC.
Order :  The following  report to Protocol Committee was circulated to the SPC. Following a
discussion it was agreed that the report on Licences and Leases be circulated to all
members of the City Council. it was ALSO agreed to seek the advice of the Law
Agent and refer back to the SPC.

Licences and Leases (report to Protocol Committee June 2011)
The Council’s goal when letting the City’s property is to ensure that it is used to its full potential with     optimum return both for the community and for the Council (including financial return).  It aims to     maximise the community benefit arising from facility use while ensuring responsible management of     community assets. The two most commonly used methods of letting property are by Licence or Lease.
T    he differences between them are as follows:
•    A licence may be terminated by giving an agreed period of notice whereas a lease lasts for a pre-specified duration unless its terms are breached.
•    A lease is for a pre-defined space whereas a licensed space can be changed to suit users needs or availability.
•    A lease is for exclusive use of a property whereas a licence need not necessarily be.
•    A lease would generally involve the lessee having responsibility for full maintenance and all ancillary charges whereas a licence would mostly just include internal maintenance.
•    A fee is usually charged for a licence and a rent for a lease.
•    A licence is not assignable whereas a lease can be sold on, assigned to other parties or subleases created (with Council’s consent which cannot unreasonably be withheld)
Note: Just calling something a licence does not make it so if it has all the features of a lease it is likely to
be classed as such if a legal challenge is made. In general a Licence is deemed most suitable where:

  • Council wishes to make a facility available to multiple users.
  • Council cannot legally grant a lease (i.e. parkland or public open space) or has insufficient title itself to do so.
  • Applicant cannot legally take a lease.
  • Council wishes to issue a short-term agreement only
  • Council wishes to assess applicant’s suitability prior to considering a longer lease or licence term.
  • Council may have future need for the premises and wishes to retain the right to take it back at short notice.
  • Accommodation is needed urgently and a short term licence can be processed quickly.

A lease is more suitable when the Council considers that providing exclusive rights to a single tenant is     in the best interests of the community and is necessary to recognise capital investment by the tenant     and secure the desired use and long term development of the property.
The criteria the Council proposes to use to assess applicants are:
•    Can the group legally take a lease? If not they may have to become incorporated first. If the group is not a legal entity is there an individual(s) who will take legal responsibility and sign the legal documentation
•    How the group is funded? Self-funded or grant-aided (how permanent is this?) Does it have funding secured for the duration of the proposed licence or lease?
•    How many people currently avail of the service provided by the group? Is this likely to increase or decrease in future years?
•    The use to which the premises may be put……to address a relatively short term need of the community or a long term one? Does it meet a currently unmet need in the area or is it duplicating work already being done?
•    Recommendations and information received from Area Offices and/or Councillors.
•    Organisational experience / how long the group are already in existence – many groups disband within the first year or two.
•    Group will need to obtain Public Liability Insurance in the amount of €6.4 m
•    Their Awareness of Health and Safety issues.
•    They should be aware that the Council’s policy of social inclusion should apply and that they should have no political affiliations.
•    Is the group investing in the premises (paying for new build or refurbishment)?
•     Their schedule of works –   How much of the work will they undertake themselves?
•     What will they require from the Council?  Will there be a financial cost to the Council?
•    The various population demographics in the area (babies / schoolchildren / senior citizens / immigrants etc all have special needs such as crèches, sports and recreation, adult learning, social and care facilities etc) and which of these currently take priority in a given area….this can change in a relatively small number of years

If there are a number of groups interested in a particular property it is usual to have them all submit a     written application and be interviewed by Council staff to assess which is most suitable. Criteria used at     interview stage would include but not be limited to the following:
•    Is the group working and providing services for the benefit of communities in Dublin City?
•    Sustainability – group must demonstrate financial viability to ensure operational funding is in place and demonstrate how they can sustain future operational costs.  They must have a bank, post office or other financial account in the name of the organisation/group or already running an office.
•    There must be a demonstrated need for office accommodation.  Priority afforded to those with no accommodation or in danger of losing accommodation.
•    There must be a board of management or structured committee in place with specific terms of reference or functions.
•    Do proposed hours of operation suit the location and other uses of the premises (if any).

It is proposed that the following policy in relation to issuing of leases / licences should be
adopted for future lettings: The Council will grant licences in the following cases
•    To all new successful applicants
•    In all buildings with multiple occupants, such as Community Centres.
•    When the applicant group is not a legally constituted entity capable of taking a lease.
•    When the Council is giving a short term permission to use the premises while redevelopment or alternative use is pending.

The Council will grant leases in the following cases
•    In cases where the proposed lessee has either financed the building of the premises on Council land or contributed a majority portion of the building cost.
•    Where certain funding agencies require the applicant to have at minimum a lease of the premises to qualify, then a short term lease (under five years) shall be granted to include a renunciation clause by the lessee in relation to the right to renew.
•    When it is in the Council’s interest to have the group responsible for the entire building and its maintenance.
•    When it has been advised by the Law Department that the applicant is entitled to a lease.