Goodwill Procedure Regulations, 2017

L.N. 369 of 2017

GOVERNMENT LANDS ACT

(CAP. 573)

Transfer of Commercial Leases of Government Property with a

Goodwill Procedure Regulations, 2017

IN exercise of the powers conferred by sub-paragraph (L) of

paragraph (g) of article 31 of the Government Lands Act, the Minister

for Transport, Infrastructure and Capital Projects, together with the

Parliamentary Secretary for Planning and the Property Market, has made

the following regulations:-

The title of these regulations is the Transfer of

Commercial Leases of Government Property with a Goodwill

Procedure Regulations, 2017.

(1)

Anyone who has, a commercial property by title of

lease from the Government or the Lands Authority, can while the

original lease is still running, transfer his rights in the lease to third

parties, provided that this transfer is subject to the following

conditions, which must be fully observed

(a)

the original tenant shall give a copy of the

preliminary agreement made between him and the interested

third party to the Lands Authority, to which agreement must be

attached a sworn declaration that that is the only existing

agreement between the parties and that the conditions set out in

it will not be changed in any way. In the agreement there should

also be declared the full amount of the value of goodwill which

is going to be transferred. If it results to the Lands Authority,

even after the signing of the new agreement, that there was even

one condition changed from the agreement that was given to it,

then the Authority has the right to terminate with immediate

effect such new agreement;

(b) the original tenant shall guarantee that if there is no

bidder, and in the event that the interested third party does not

come forward to sign the transfer of the remainder of the

original lease upon himself with the Lands Authority, he shall

be liable for payment of rent for the remaining period from the

call for tenders until the end of the original term of the lease;

(c) the original tenant shall guarantee that the rent shall

never be less than what it actually is and if the offer is less, and

if the interested third party does not come forward to sign the

transfer of the remainder of the original lease upon himself with

the Lands Authority, he shall be liable for payment of rent for

the remaining period from the call for tenders and the end of the

original term of the lease;

(d) the original tenant shall guarantee that the terms of

the original lease are in no way changed;

(e)

the original tenant shall guarantee that when the

original lease is transferred onto the interested third party,

following a call for tenders, he will remain jointly and severally

liable with the new tenant for payment of the rent until the end

of the period of the original contract;

(f)

the agreement between the original tenant and the

third party concerned is subject to the right of the Authority to

issue a call for tenders.

(2)

Before issuing a call for tenders, the Lands Authority

shall

(a)

verify that the contractual provisions in the original

contract have been fully met and that there are no violations of

any law or contractual provision in respect of that property,

including that there are no arrears of rent payments;

(b) be advised of the value of the goodwill,

improvements, furniture and other objects found in the rented

property and for which the original tenant is expecting to

receive a payment. In the eventuality that the transfer of the

remaining term of the original lease is done in favour of the

interested third party, the same interested third party, before

signing this agreement, shall pay the amount equivalent to ten

percent (10%) of that sum.

(1)

Having observed in full the conditions imposed in Call for tender

the previous regulations, the Lands Authority shall issue a call for to the public.

tender to the public, which shall be publicized widely on various

media informing the public that the original tenant does not want to

remain in the original lease and inform the public that there is an

interested third party who is ready to assume the remaining term of

the original lease and this on the preliminary agreement that has been

made and that the interested third party has been reserved the right of

first refusal.

(2) The Lands Authority may, in its absolute discretion,

require a bid-bond with the tender.

(3) If the transfer of the remaining term of the original lease is

made to the tenderer and not the interested third party, the tenderer is

obliged to pay an amount equal to ten percent (10%) of the value of

the goodwill, improvements, furniture and other objects found in the

property leased, to the Lands Authority and for which the original

tenant is expecting to receive payment. The remaining balance of

ninety percent (90%) shall be paid by the tenderer to the original

tenant. Having made such payments, the property can be transferred

to the tenderer.

The Lands Authority shall ensure that all costs for the

purpose of transfer, including costs for the tender, shall be levied on

the person to whom the property is transferred to for the remaining

period of the rent.

€0.27