Dealing with Landlords 

In this section we look at the Crown Estate Commissioners role as Landlord.

Crown Estate Commissioners

Under the terms of the Crown Estates Act 1961, the Commissioners are charged with the function of managing the Crown Estate and turning the Estate to account, which can be interpreted as a requirement to raise the highest possible rent from their assets.

Since the Crown Estate comprises the majority of the fundus in Great Britain, from the high water mark to the limit of territorial jurisdiction, it is clear that a major source of income from this part of the estate consists of rents and licence fees paid by harbour authorities, marina and mooring authorities, as well as clubs and private individuals paying for the right to lay moorings.

As rent can be demanded by any landowner as a condition of granting a lease or licence, so the Commissioners are entitled to levy a fee for the right to use the fundus, or seabed, for the purpose of permanent mooring.

Since the monopoly position of the Commissioners could, in theory, be abused so as to hold the country to ransom, a number of quasi-statutory and customary provisions apply so as to ensure that, so far as possible, the rents levied by the Commissioners are fair and reasonable.

Role of the District Valuer

In the course of the parliamentary debate of the 1961 Act, the Minister agreed that in cases of dispute the Commissioners should submit the issue to the District Valuer ('DV'), an official usually appointed by HM Revenue & Customs, to whom both parties should feel confident to look to for a fair arbitration. The Commissioners almost invariably adopt the practice of submitting all rent reviews to the DV without waiting for a dispute to arise. In most cases this works fairly. The DV generally understands his position as arbitrator and is ready to hear reasoned arguments as to the level of rent to be charged for a holding, be it a block of moorings, a pontoon or a slipway. However, occasionally it is clear that the DV misunderstands the background of his appointment and appears to act as the agent of the Commissioners in attempting to wrest the highest possible rent from the lessee concerned. Where there is evidence that the DV is misdirecting himself as to his status, the tenant should ask to see the terms of reference under which he is appointed.

Conditions affecting the Commissioners

Section 3(1) of the Crown Estate Act 1961 provides that the Commissioners shall not sell, lease or otherwise dispose of any land of the Crown Estate, or any right or privilege over or in relation to any such land, except for the best consideration in money or money's worth which in their opinion can be reasonably obtained, having regard to all the circumstances of the case but excluding any element of monopoly value attributable to the extent of the Crown's ownership of comparable land.

Interpreted literally, this would mean that the Commissioners should always attempt to secure the best market price for land subject only to the fiction that a private adjacent landlord is competing for the lease. Clearly this would lead to inordinately high rents and accordingly two non-statutory conventions or practices have been adopted.

Facility for public use

Where a facility is for the use of the public, such as a playing field or a mooring area taken by a club, rent will be charged on the basis of this being for the public benefit rather than for commercial benefit. This basis results in reasonable rents being charged and in practice, at 1995 levels, a bracket of 30 - 75 pa per individual mooring site can be expected and of 30 - 200 for slipways, in each case depending on the site, condition, demand etc. of the facility.

Proposals were put forward by the RYA in 1992 to agree a single valuation formula for mooring rents throughout the country. Although it proved impossible to reach an agreement that would be equally acceptable in all parts of the country, many clubs, fairway committees and small harbour authorities have since found the formula to be a useful starting point in their negotiations with the major public landlords, they have also made considerable use of the RYA s detailed mooring leases database for researching comparative mooring fees.

In Portsmouth Harbour in 1993, a general agreement was reached between the clubs and private mooring groups acting in concert. Under this agreement, the Crown Estate Commissioners agreed a single renewal date and a single round of rent negotiations, dealing with the area association rather than the many individual licence holders.

Restriction on mark-up

Where a mooring area is let to a club or a harbour authority, the lessee is permitted to sublet individual sites to boat owners and to add an amount to that portion of the rent attributable to each site to cover administration costs and build up a reserve to cover any future deficit. This mark-up is subject to a 25% limit which is intended to prevent clubs or authorities making a profit from what is, after all, a public facility.

Water supply PLCs

There are estimated to be over 150 inland sailing clubs using Water Company facilities, for the most part compensation or water supply reservoirs. Until the 1970's, it was rare to see any Water Authority reservoir put to public use, but the duty imposed on water companies by the 1973 Water Act , to make facilities available for sport and recreation so far as reasonably practicable, resulted in the rapid growth of inland sailing venues. Many of these new clubs were in response to the dinghy sailing boom and were often offered peppercorn rents or at least heavily discounted rents.

For the most part, the Water Companies, which took over from the Water Authorities in 1990, have proved to be good landlords. A well managed and popular facility provides an attractive public showpiece for what is otherwise a low profile organisation and, for many years, rents were maintained at reasonable levels. There is now however increasing pressure on all Water Companies to produce profits for their shareholders and funds for the improvement of the water and sewage infrastructures, and each individual activity including recreational boating is subject to closer scrutiny for profitability.

When faced with an unacceptable increase, it is essential to obtain early professional advice, firstly, because only a surveyor experienced in reservoir valuations can give a real indication of a facility's worth and, secondly, because surveyors acting for the landlord will often prefer to negotiate with one of their own profession.

In the late 1980's and early 1990's, there was a decline in the popularity of dinghy sailing on inland waters. Most Water Companies do understand that membership rolls are falling and that some clubs have been disbanded under the pressure of rising costs in recent years, indicating that recreational boat owners cannot be regarded as a source of easy income for Water Companies.

If you require further assistance please do not hesitate to contact the Legal Team Tel: 0844 5569519 Email: legal@rya.org.uk.