Issue details

We have been asked to approve a 10 year sublease by the solicitors representing the ground leaseholder of Unit 5 Pioneer Court by Hagen Developments Limited.
The proposal is for them to grant a sub-underlease to Fairstone Group Limited (Company House reg no: 06599555) whose registered company address is 1 Bulrushes, Boldon Business Park, Boldon Colliery, Tyne and Wear NE35 9PT.
The sub-underlease will be for a term of 10 years for a rent of £18,972.00 p.a. of part first floor of Unit 5 Pioneer Court.
Bank references are not required due to the Council only receiving a nominal rent of one peppercorn.
The proposed use is office use class E (formerly use class B1 of the Town and Country Planning (Use Classes) Order 1987.
The company’s business is providing retail financial services.
The Companies House check has revealed that the last published accounts of Fairstone Group Limited have shown the company had debts of over £21m and can only be serviced with help from the holding company. The alienation clause in the lease between The Council and City & Northern (Now Hagen Developments) does not refer to any under-lessee being a good, a proper person or company, just that the Council’s consent cannot be unreasonably withheld or delayed.

In light of the checks Hagen Developments will have commissioned, to ensure their direct under tenant is of substantial covenant and standing, we have no grounds for withholding our consent. Fairstone Group Limited will not be paying rent to the Council. They will be paying rent to Hagen Developments Limited.
The Council’s legal and surveyors fees of £400 are being paid by Hagen Developments Ltd for processing this approval.