Two hundred council-owned commercial properties without current leases and £1million-plus needed for huge repairs backlog

Margate harbour arm (Stone Pier) Photo Jamie Horton

Some 200 ‘commercial’ properties owned by Thanet council have not had lease renewals since as far back as 2016 due to chronic staff shortages – meaning tenants are paying either a fraction of the market value rent or are not paying at all.

Of Thanet council’s  727 commercial properties, 338 are active sites and almost two-thirds of those cannot have rent reviews until the leases are dealt with.

One example, raised at a council meeting last week, is Margate’s Harbour Arm which Thanet council took back management of last year after revealing the lease with then landlord Margate Harbour Arm Ltd  (MHAL) would not be renewed.

MHAL had leased the harbour arm for a nominal £1 per year from 2008 until February 2021. But, interim corporate property director Mark Peace, said the council inherited a ‘difficult situation’ with just two of 13 tenants having current lease agreements and traders demanding repairs are made before they pay any more rent.

He said: “Out of 13  properties just two leases are in place. Tenants are resisting paying rent until we sort issues with the toilets, roof and various other things.”

Thanet council currently receives a yearly rental income of £2.2million but the market value would be £3.14million. That additional income is needed to pay for a properly staffed department to get on top of the backlog, says Mr Peace.

As well as reduced rent income, expired/out of date leases means the authority often cannot implement service charges for electricity and heating so is also incurring those extra costs.

Speaking to a Thanet council governance meeting last week Mr Peace also revealed a huge backlog for repairs and maintenance for the commercial assets is likely to need an extra £1million allocated in the next budget, going up from £115,000 to £1.138million.

The commercial properties owned by Thanet council range from land and parks to museums and theatres but also shops, kiosks, industrial units, sport club sites and, since last year, the commercial units on Margate’s Harbour Arm (Stone Pier).

Mr Peace said: “There are 200 outstanding lease renewals and rent reviews and many of those outstanding rent reviews pre-date 2016, so are six years out of date.

“(There are) about 200 properties where people are in occupation, their leases have expired and they require lease renewals before we can enact those rent reviews.”

He added: “In addition to the rent we have issues in the portfolio we need to address. There is a significant backlog in repairs and maintenance and statutory compliance that we need to do.”

Mr Peace said there would usually be an annual schedule for those repairs and works but due to staff shortages there wasn’t a schedule and some 350 sites have had to have surveys commissioned.

He added: “Last year we had £115k (general fund) allocated for repairs and maintenance, I estimate next year that figure will be about £1million higher, £1.138million… putting those properties into hopefully  a safe, or at least wind and water tight, condition.”

Another 125 properties require energy performance certificates (EPC). EPCs, which are a legal requirement for rented properties, rate how energy efficient a building is using grades from A to G (with ‘A’ the most efficient grade). From April 2023 all rented commercial property will need to have a rating of band ‘E’ or better and failure to achieve this will see landlords face potential fines of up to £150,000.

Work on Thanet council’s priority one EPCs should be complete before the end of January, said Mr Peace.

He said as lease renewals and rent reviews are carried out, officers would not look to backdate further than 12 months.

He gave an example of someone paying a rent rate that was eight years out of date and a quarter of the current market value but added that asking for backdated rent for the whole period could not be justified because it is “due to mismanagement by ourselves and not the current tenant’s fault.”

Mr Peace said it would also be “a painful year” catching up on repairs and maintenance but within 18 months that work would mean rental values going up “considerably.” He said 70% of rent arrears were from concessions, including beach businesses.

Mr Peace told councillors industrial unit rents were not slowing down much and offices with parking and good locations were still in demand but retail units, which TDC does own although in small numbers, were “a problem.”

He said: “This is a tough time for retail coming out of covid but coming into a cost of living crisis, we are trying to encourage enterprise and employment and that’s a reason we are not going back six years on rent reviews for someone who is just trying to break even.”

Sites owned by the council and leased out include Kent Innovation Centre, units at Pysons Road industrial estate, kiosks including at Dane Park, Dumpton Gap, Joss Bay, Pier Yard, Viking Bay and Margate’s Marina Esplanade. port and harbour properties including Military Road units in Ramsgate and shops in Ramsgate, Westgate and Margate.

Mr Peace said the issues have stemmed from the department being “monumentally understaffed” with just four officers – 2 estate surveyors, 1 acquisition/disposals surveyor and a rent officer.

Mr Peace started his role in July and there have also been two more estate surveyors and a compliance officer taken on with plans to expand that with two more estate surveyors, In the next financial year there will be more staff including three more surveyors, a data expert and four decarbonisation staff.

Increases in rent revenue would initially pay for the staff salaries and investment in the properties with a long-term aim of increased revenue going into the budget.

Finance director Chris Blundell said staff shortages are a symptom of 10 years of funding cuts with councils delivering the same services but with greatly reduced staffing.

44 Comments

  1. laughable really , if i did not pay the rip off rates on my house for a month they would be on me like a ton of bricks , with threats of court action and imprisonment . these idiots at the council should be brought to book over this latest scandal

    • You vote for them you just as guilty. Past present and future. It needs a court of law and a damn good lawyer who can take these councilors to town.

      • Reb.. I’m not entirely sure that the ballot box solves any of these problems. I don’t believe that Councillors are the people that aren’t doing the job here.. it’s the Council’s paid employees at management level that aren’t performing. Councillors aren’t in any position to be directly responsible for sorting out this mess.

    • They blame it on staff shortages as if it is not TDC’s fault.

      Most of the staff shortages are as a result of redundancies – either getting rid of top brass who were inept or corrupt or shedding staff lower down to save money.

      As a result, most of the assets have fallen into disrepair and/or proper rent is not being levied and collected. That amounts to gross incompetence and dereliction of public duty.

      The rudderless ship has hit the rocks . . .

        • No offence, but my experience of dealing with councillors is that unless its an area they have an interested in they’ll pay little attention to the councils wider issues. It would surely have been in the councils accounts that income from leased property was unfeasably low and that expenditure on maintenance and repairs was likewise insufficient.
          But as with many areas at TDC no one joins the dots.
          Who had the remit for overseeing the commercial property portfolio? Who checked the figures from this department ? Who signed it off as being correct and raised no issues?

          TDC is ( again in my experience) staffed by the barely literate / innumerate more interested in covering their own and corporate backsides than actually doing their job, everything is subbed out to external contractors and there is little scrutiny or questioning of reports and invoices that come back because no one wants to take responsibility for anything. The work from home culture has only added to the problems , with its attendant lack of oversight and access to records and fellow officers that may have information required to complete work efficiently.
          There’ll be more of this sort of thing to come, the sooner its all rooted out the better. If only it were possible to reveal all the NDA ‘s that have been drawn up in the name of full and open disclosure on the way TDC has operated and buried many failings.

          • Spot on – people like Edward JJJ are prime examples of the ‘not my fault mentaility’.
            What exactly were you doing for 4 years Mr JJJ?

  2. What’s happening with the Tudor House in Margate? It’s in an awful state. Roof is tumbling down. Windows broken and empty panes.

  3. The biggest risk working for TDC is being injured by a skeleton tumbling out of a cupboard. Next round of asset disposals coming soon?

  4. This level of incompetence over such a very long period is clearly not due to staff shortages and nobody believes this flimsy excuse.

    Where is the leadership and competence? Why are we being run into the ground? The staff at TDC and the residents of Thanet deserve so much better.

  5. £1 a year rent for the whole of the Harbour Arm…. Thank you Ms Homer & your crooked team!
    What an inheritance….

  6. Nothing ever happens nothing happens at all
    Public toilets are broke cause our councils a joke
    And we all sing nothing gets done by our council

    Sewage floats on our sea and on to our beaches
    And the companies say its the fault of rain and the weather
    And Ramsgate M P just sits on his throne and twiddles his fingers

    Nothing ever happens nothing happens at all
    Public toilets are broke cause our councils a joke
    And will sing nothing gets done by our council

    Our fuel bills are rising so no one has money to eat
    It’s heating our house or have food on one’s plate
    So we’ll either go hungry tonight or we’ll freeze tomorrow.

    Nothing ever happens nothing happens at all
    Public toilets are broke cause our councils a joke
    And will all sing nothing gets done by our council

    Christmas is near but still there’s nothing to cheer
    As there’s smashed up cars by drug or drink fuelled drivers
    While angry from thanet says there’s to many drugs on our streets

    And nothing ever happens nothing happens at all
    Public toilets are broke cause our councils a joke
    And we all sing nothing gets done by our council.

    • Big Chris , I’m a fan of Scots band Del Amitri and I don’t know if you are familiar with their hit song
      “ Nothing ever happens” but I think that you could sing your words to their song .
      Check out their lyrics on YouTube and hear the song and you’ll see what I mean, or did you have their song in mind and changed the words when you wrote your piece ?

      • Rockstar it is based on the Del Amitri hit but I couldn’t quite find the exact words to rhyme hence I decided not to say to the tune, but like Mr X you got the gist straight away, it came to me reading Kathy’s Thread I miss read a part of it and Nothing ever happens just stuck in my head, I to have a penchant for Del Amitri and Scottish music in general and the skirl of the pipes.

  7. Tdc could sell off the properties who are involved with alcohol sale, late night businesses, junk food shops, tobacco sales or does tdc want to be associated with business that are a day&night time blight and not offering anything healthy.
    Give the existing shops businesses first refusal,if there not interested then give them notice and get clive emson to sell at auction

  8. Shortage of staff is rather a flimsy excuse. New leases could have / can always be drawn up by one of Thanet’s commercial Estate agents. A standard lease could be established and with so many to do, the cost per lease should be minimum. All in all rather a poor effort. Not to mention health & safety and legal obligations.But at least someone has now highlighted the issue.

  9. That’s what happens when you have a council that doesn’t care and operates to it’s best ability ( if they had any). They would rather plough £££ in to art and waste the rest on over sized wages for under preforming top t##ts. 12 years of Torie lies and self greed

  10. So once TDC sort themselves out we will be loosing more commercial trading / stores, as they will probably put rents and rates up to an extortionate price to claw back what they pay out for repairs etc, and the extra staff to deal with the situation. Which they should’ve done at the outset !!!

  11. This is really astonishing just how poor TDC are, its mind blowing.

    How homer was allowed to over see this and than get huge pay off for being crap at her job its bonkers. She and her pals should have been held accountable for their acts not paid of.

    Thanet is really a poor place unless you are into art. Graffiti every 10 yes, weeds on pavements and blocking road gutters. Litter everywhere. But most of the graffiti and litter is down the the residents of thanet.

    We have residents who like the unkempt areas as they say it’s good for wildlife yet bad for tourists.

    The smell of weed and poor driving standards. MP’s who back a struck off solicitor to raise 500 million.

    I think thanet has a council it deserves.

    How this is turned around I havent a clue. We need a change of mind set from the council to the residents. But looking at parts of thanet that’s a big ask

  12. It is not astonishing. Its not funny. You need to take action. Only way. Do it today whilst you got fire in your bellies. No more moaning.. Act. It has to be done…

  13. This has been TDC’s way of doing things for years.
    I suggested to them that they out source their estates function to an outfit that could sort out this mess. Dealing with TDC estates is a nightmare.They are slow, inefficient, incompetent and as is usual with TDC,very defensive.
    GSI would cost,but it would be paid for by getting in some rent.
    Poor old Carmichael must wonder what outfit he has joined!

  14. There is a shortage of staff in all departments at TDC which is down to mismanagement. Is it about time that another complete body of people including Cllr’s were installed to clear up the mess possibly created by our the former CEO who was the mentor for all whom remain. Potentially things will never change until we have a complete change of officers and staff. pvp

  15. Staff shortages as an excuse would be ok if it wasn’t for the clear and obvious fact that the funds these staff would have brought in outweighed their employment costs massively!
    Mr Blundell (TDC Finance Mismanager) should have known this, if not in 2016, certainly soon afterwards. It’s part if the job, reporting on how to balance the books and strategies to generate income.
    So, are TDC going to investigate who knew what and when? Will they look at what was reported and what was acted on? Probably not! After all it’s far easier to blame a toxic council than individuals who failed to do the jobs we are paying them to do. And our elected representatives – what scrutiny did they have? What have they chosen to ignore since 2016?!
    I wonder if these businesses will be made to pay arrears and have market rents levied with the new leases? I imagine TDC will see this as a cash cow and ignore the damage caused if businesses have to close.
    You think it’s as bad as it can get then a trap-door opens. Down we go to deeper, unimaginable level of incompetence.
    In less than six months we all have a chance to change this by electing Councillors who will scritinise, challenge and assure us of effective strategy. Both Tory and Labour leaderships should be resigning over this. Both parties need to put forward new people rather than the lazy, complacent lot who allowed this gross incompetence to develop and be sustained. If they can’t find candidates who will act properly they shouldn’t put them forward!

    • I am sure the bulk of the current lazy councillors are just accepting everything they are told by the officers and the leaders at the top who bully both officers and councillors into doing bad deals for the area then go and grab a huge fist full of taxpayers money and escape all justice with the stupid get out clauses when they realise they have no other way to turn.

      This council smells of maladministration and corruption but the government accepts it as it follows them like an even worse bad stink.

      A complete new council will be the only way forward, not more of the same at the next election. We have a great area in Thanet but a terrible wasteful administration.

  16. This has to be the most dysfunctional, incompetent, corrupt and hypocritical local authority in the country. TDC and it’s MPs should be investigated by a private independent body.

  17. This also goes back across many officers, cllrs, mps, leaders for 4 decades. Disgusting. They should be prosecuted for neglect, incompetence and corruption one and all.

  18. I have always been of the opinion that a District council was a bad idea lets go back tho the town councils, get rid of the of the TDC officers and employ decent officers but with only a town brief so they can concentrate, empty the building at Margate and turn it into Affordable houses/flats, because the way you vote makes no difference at all, it is the officers that run the show and coucillors are in the business of rubber stamping. In 76 years on this island we have had all flavours of councils and local councils worked better. Since TDC was formed it has been awful, and I blame the highly paid officers. The coucillors are puppets.

    • Yep – too many councillors are focussed on the petty party politics and how well they can do in ‘the party’ – too dim to challenge, too keen to get a pathetic selfy with Rishi or Kier, all too eager to follow the whip in their ambition to bag a paid position on top of their allowance.
      Next up, the bad news about the Winter Gardens….

  19. Why does it take an interim (pesumably contractor) just a few weeks to uncover this mess when finance chief Mr Blunder along internal and external auditors have been signing of the accounts years after year?
    Something stinks, and it’s not just Margate Harbour.

    • If you’d seen some of the arithmetic that council departments put out , you’d be unsurprised by anything they do. Add in a basic lack of literacy and all hope is lost.

      Third rate service
      Delivered by fouth rate employees
      All protected by local government regulation .

  20. Disgraceful , tdc always had bad reputation for yrs, get rid of the top ones who are sitting comfortably doing nothing and blaming others,

  21. I expect this is correct. I personally tried to rent a comercial tdc unit that had been empty for a few years In margate High Street from the council. The rent was very high and the rates were so unrealistic. If the rent was sensible it would rent straight away but instead the extra overpricing £5000 on the rent makes it unaffordable and empty. Reducing the rent will at least tdc some money in and a shop filled. If they have so many properties still to rent why does the tdc website only show 2 and some cargo containers.

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