5. Asset Ownership & Management Agreements
This section deals with the things related to taking a stake in an asset. This activity only takes place when the credibility of the project and the community organisation leading it has been secured. In this section we are referring to primarily to buildings when we talk about assets. Both community organisations and Local Authorities involved in library transfers need to consider the most appropriate terms for transferring an interest in the asset. Choose a topic within this category from the above menu to learn more about a specific area.
Key Governance Issues to Consider
- This is the point at which the organisation commits to make a major commitment. While you may be still able to stop the process later on, this will be at very considerable cost. This is the deep end! Good governance up to this point means you will have had detailed information and full understanding of options and risks at all stages so far.
- Will you get the level of control over the asset that you need?
- Will you be able to use the asset as security for further finance if you need to?
- Even if you are building your own asset with debt finance, bankers can place restrictions on the tenancies that you can offer and rental levels that you can charge. Leases will have terms and conditions and may place restrictive covenants. The extent to which you can use the asset to benefit the community in the way you want will depend on the detailed nature of the agreement that you sign and on the financing and loan agreements that you commit to.
- Take professional advice from a lawyer who is an expert in property. Knowledgeable comment from a board member who may be a solicitor is not enough. If you have a legally qualified board member get him or her to lead and drive the process. If there is grant input pay particular attention to the issue of clawback and charges and the duration for which these may apply.