The timing will ensure the best approach to repairs, refurbishment or building works can be undertaken. For example, there is often a back-log of repairs on the site and the club or community organisation may put conditions on essential repairs being finished before handover.
Local authorities do not have to pay VAT on construction projects, so it is often better for any major construction or refurbishment to be completed by the local authority prior to the transfer taking place. On the other hand, it might be better for the transfer to take place ‘at risk’ before all capital funding is in place, because the community group has a much better chance of raising the funds for improvements than the local authority does.
A community group has a much better chance of raising the funds for improvements than the local authority
Communities or club members may not want to put their hands in their pockets unless they know that transfer has actually taken place, especially if there is any history of mistrust or ‘broken promises’ between the local authority and community.
It is usually possible to agree Heads of Terms (headline terms such as lease length and use conditions) and have a written commitment to transfer – or a legally binding Options Agreement – which sets out the conditions that would trigger transfer and enable the club or community organisation to take up the lease offer prior to transfer. This can be used to show funders and the community that the local authority is serious about going through with the transfer.
Community organisations and sports clubs should never sign legal agreements without having them checked by a lawyer. Also be aware that local authority legal departments can be slow and risk averse – and all parties will need to set clear deadlines to ensure that legal agreements are finalised in a timely fashion.