30th August 2021
Reference IL Ref 0587
Concerns regarding Yoo Capital’s Housing & Office development
raised at the Zoom Meeting held on the 23rd of August 2021
with the SBMTA & Yoo Capital
For the attention of: -
The Mayor of London
Yoo Capital – Mr Lloyd Lee
The Hammersmith & Fulham Council – Councillor Stephen Cowan
Dear Sirs,
1) The Shepherd’s Bush Market Tenants’ Association (SBMTA) appreciates Yoo Capital’s attendance at the Zoom Meeting held on Monday 23rd of August 2021 with the SBMTA Committee. Please find below reference to some of the numerous concerns which must be addressed due to Yoo Capital’s proposals.
Yoo Capital’s Ambitions
2) Yoo Capital’s ambitions to submit a planning application by December 2021 and build a housing and office development on Shepherd’s Bush Market land have raised anxieties and may be considered controversial.
The Significance of the Shepherd’s Bush Market Businesses
3) One should consider, what the purpose of the Shepherd’s Bush Market land is, and how the land should be utilised for the future. The 106-year-old market has provided affordability and opportunity to numerous small independent traders of various ethnicities, and subsequently, the market provides a unique and valuable service to many diverse committees.
4) The 2016 judgement by Lord Justice Lewison, Lord Justice Longmore, and Lord Thomas of Cwmgiedd, CJ, in the Court of Appeal - ‘Horada & Ors v Secretary of State for Communities and Local Government & Ors’ [2016] EWCA Civ 169[1]discusses the significance of Shepherd’s Bush Market and reads: -
“It provides a social function to the local community. It is ethnically diverse in its nature and offers the opportunity for independent businesses to trade in an affordable environment not found elsewhere in the area”
The retention of the Shepherd’s Bush Market businesses
& The long-term affordability of the market.
5) Although Shepherd’s Bush Market is in need of regeneration, neither the retention of the retail market tenancies, nor the affordability, nature, or purpose, of Shepherd’s Bush Market should be compromised.
6) Planning applications relating to Shepherd’s Bush Market have been submitted to the Hammersmith & Fulham Council in past years, and sadly these planning applications have led to unfortunate repercussions bringing injury and distress to the Shepherd’s Bush Market businesses. It is essential that Yoo Capital’s proposals do not echo the mistakes of the past. Proposals, threatening the long-term affordability of Shepherd’s Bush Market, or the dramatic loss of tenancies within the market must not be tolerated.
7) In 2013, the Hammersmith & Fulham Council had taken the approach that neither the retention of tenancies in the market nor the long-term prospects for the existing Shepherd’s Bush Market businesses should not be compromised. It is hoped that the Leader of the Hammersmith & Fulham Council will protect the well-being of the Shepherd’s Bush Market businesses.
8) It is essential to respect that even though property developers may wish to seek greater revenue and gains, the Shepherd’s Bush Market businesses should not be compromised to acquire these ambitious margins and profits.
Traders being pressed to relinquish their Leases
9) The Shepherd’s Bush Market traders presently enjoy certain rights and protections due to the possession of their leases. It is the SBMTA’s view that the Shepherd’s Bush Market tenants should be exceedingly cautious before considering any agreement to relinquish their leases, as a trader without their existing lease may no longer be classified as ‘tenant’. Further to this, traders may lose their right to retain the present terms and conditions of their tenancy and may lose their legal right to dispute their future rent levels.
10) Yoo Capital may wish for market tenants to relinquish their leases in order to relocate traders and/or place traders of weaker tenancy agreements.
11) It was reiterated by the SBMTA on the 23rd of August 2021, to Yoo Capital, that in order for the redeveloper to perform works upon the leased location of the market businesses, a tenant does not need a tenant to relinquish their lease, but instead, could issue a license to Yoo Capital, granting legal agreement for Yoo Capital to perform the required work. This method allows a tenant to retain their lease and their rights and not suffer the repercussions of relinquishing their lease(s).
12) Yoo Capital expressed a dislike to this possibility, at the zoom meeting on 23rd August 2021, and claimed that as the Shepherd’s Bush Market land would be in various states of disorder and turmoil during the development, and further claim that the proposal of a tenant issuing a license to Yoo Capital is not feasible. The SBMTA disagrees with Yoo Capital’s assertions.
13) Yoo Capital’s reluctance in accommodating the Shepherd’s Bush Market businesses on this matter may be considered as a severe concern, and Yoo Capital is recommended to revise their position.
14) Yoo Capital has stated on the 23rd of August 2021 that no tenant will be asked to relinquish their lease(s) until all agreements for the short and long term can be legally securitised by each tenant’s solicitor (at Yoo Capital’s cost) and that terms and conditions are satisfactory to the requirements of each tenant. The SBMTA kindly asks Yoo Capital to place their assurances in writing, please.
15) Yoo Capital’s recent issuing, of ‘Notice to Quit’ to some tenants seems to contradict Yoo Capital’s settlement expressed above, as they stated that no tenant will not the pressed to relinquish their leases. The SBMTA asks Yoo Capital to please explain, in writing, their recent actions, as there seems to be some confusion and conflicting undertakings.
Yoo Capital’s Lease proposals
16) A large proportion of the market businesses hold leases falling under the protection of the 1954 Landlord & Tenant Act. These tenants are entitled to renew their leases, retaining exactly the same terms and conditions.
17) Yoo Capital has announced that its ambition is to alter the terms and conditions of the leases. This subsequently raises concerns about uncertainty and compromise to the future of the market businesses.
18) Yoo Capital stated on the 23rd of August 2021 that although the proposed lease terms and conditions of the new leases are not exactly the same (as that which the tenants are entitled to), Yoo Capital states that their proposed lease terms and conditions are moderately similar. This is considered unacceptable, as these alterations to the lease terms and conditions may bring detriment to the long-term prospects of each market business.
19) The SBMTA gave example, during the Zoom meeting on the 23rd of August 2021, that if Yoo Capital’s wished to deviate from the agreed IPD Index lease review stipulation, and instead implement the obligation for the tenants to agree to pay a rent of ‘open market value’ in the middle of the lease contract period, then tenants may incur financial impairment that could result in the tenants being unable to afford the second half of the lease term.
20) The SBMTA explained that although Yoo Capital may wish for the market tenants to pay a rent of ‘open market value’, it is however customary for the landlord and Shepherd’s Bush Market tenants to address the rent levels prior to entering a lease contract and not in the middle of a lease contract, as Yoo Capital is proposing.
21) As Yoo Capital is aware, tenants holding leases with the inclusion of the 1954 Landlord & Tenant Act can argue what rent levels a tenant may pay by taking the matter to the Courts and letting the Courts decide what is fair and reasonable. Yoo Capital’s proposed amendment of the future leases to force ‘open market value’ in the middle of the lease term may hinder the tenants’ legal ability in seeking a fair and affordable rent.
22) The Shepherd’s Bush Market leases presently set a rent review at a level relative to the IPD Index, and subsequently, the tenants should suffer no change from these terms and conditions. Yoo Capital’s ambitions to alter the leases may bring unfair uncertainty to a tenants’ businesses in the latter half of the lease term and weaken the long-term affordability of the tenants’ premises. This in turn may force market tenants to close their business and leave the market, suffering financial detriment.
23) Yoo Capital’s proposals are considered unacceptable as they may place an unreasonable economic burden on the tenants during the latter half of the leases.
24) Yoo Capital suggested on the 23rd of August 2021, that as they seek to have all market tenants paying ‘open market value’ by 2030, they could shorten the length of the leases. so, their endeavour to seek ‘open market value’ may occur after the completion of the lease term.
25) Yoo Capital’s ‘Open Market Value’ proposal upon the halfway point of the future lease may invoke a difficult battle with the market businesses if Yoo Capital is not willing to be fair and reasonable.
Lease Analysis
26) In order for Yoo Capital to demonstrate transparency, the SBMTA invites Yoo Capital to please present a precise legal analysis as to how Yoo Capital’s proposed lease terms and conditions exactly vary from that of the present Shepherd’s Bush Market (TfL) leases which fall under the protection of the 1954 Landlord & Tenant Act.
27) It is essential that no market businesses are given the misimpression that Yoo Capital’s proposed lease terms and conditions are the same as the previous Shepherd’s Bush Market leases if there are actual differences. Consequently, an impartial legal analysis on the leases may provide a greater understanding of Yoo Capital’s ambitions to alter the leases.
The '1954 Landlord & Tenant Act'
28) The existing Shepherd’s Bush Market businesses, whose leases offer the rights and protections of the 1954 Landlord & Tenant Act must retain these rights at all times.
29) Yoo Capital has assured the SBMTA that these market businesses will always retain these rights, however, Yoo Capital has been vague in explaining how this will be achieved if a tenant suffers relocation or/and relinquishes their lease. The SBMTA asks Yoo Capital to please provide a written legal explanation as to how the tenants’ 1954 Landlord & Tenant Act rights will be retained, at all times.
30) Those market businesses in Stalls, Shops, and Arches, whose lease stipulations do not encompass the inclusion of the 1954 Landlord & Tenant Act, yet hold valid legal argument to be under the protection of the 1954 Landlord & Tenant Act, due to the oversight of the former landlord, allowing the tenant to ‘hold over’ outside the term of the tenancy and establish rights, are now encouraged to seek legal guidance and pursue their entitlement as there is concern that Yoo Capital may not acknowledge the situation of these tenants. If Yoo Capital does respect and acknowledge this situation of these particular tenants, would Yoo Capital please explain in detail the next steps which will be taken to honour these entitlements of the tenants, who are presently located in either Stalls, Shop, or Arch premises?
31) Yoo Capital has stated on the 23rd of August 2021 that they will guarantee that all future lease tenancies in Shepherd’s Bush Market for Stall and Shop premises (Not Arches) will be leases with the full inclusion of the 1954 Landlord & Tenant Act. The SBMTA asks for Yoo Capital to place this pledge in writing and explain when Yoo Capital envisages issuing these future leases and when the rights of the 1954 Landlord & Tenant Act will come into effect?
32) There is concern that traders may be placed in a compromising position whereby: -
(i) traders are without the protection of the ‘1954 Landlord & Tenant’ for a significant period of time, before starting their term lease and/or occupying their final premises, subsequently, leaving some market traders in a vulnerable predicament.
(ii) Yoo Capital’s proposal to alter the lease terms and conditions may result in counteracting the benefits of the 1954 Landlord & Tenant Act. (As previously exemplified in the above paragraphs, if Yoo Capital were permitted to implement ‘Open Market Value’ upon the halfway point of the lease term, this could undermine the market traders’ right to dispute the rent levels).
(iii) Yoo Capital cannot provide assurances for tenants in Arches to receive leases with the guaranteed inclusion of the 1954 Landlord & Tenant Act. (For this reason, tenants in Arches, who presently hold leases under the 1954 Landlord & Tenant Act must not relinquish their lease as Yoo Capital claim that it is beyond their ability to replace the lease).
33) Yoo Capital claimed on the 23rd of August 2021 that as stewards of the market they do not bear the full control and responsibility of the market arch premises and that ‘Transport for London’ being the freeholder of these Arches will not permit tenants to hold leases with the inclusion of 1954 Landlord & Tenant Act. Of course, those Arch leaseholders who already have the inclusion of the 1954 Landlord & Tenant Act should not be troubled as this inclusion should remain upon the renewal of their leases. Some tenants, however, may find themselves in a very tenuous position.
34) The SBMTA ask Yoo Capital to please clarify in writing, their view of the situation.
Financial Packages
35) Yoo Capital insinuated on the 23rd of August 2021 that the Shepherd’s Bush Market land may suffer significant excavation. It is understood that the likelihood of disturbance and disruption to the market businesses is high.
36) Yoo Capital has stated that due to the damage which their development may cause, they are willing to pay a minority of the market businesses’ losses, for a limited proportion of the duration of the scheme, with a maximum cap on what any business can claim for from Yoo Capital.
37) Is it not fair for the Shepherd’s Bush Market businesses to expect to receive reimbursement for 100% of their losses, incurred throughout the entire duration of Yoo Capital’s planning scheme if the scheme has caused the loss?
38) Yoo Capital has claimed that they cannot afford to compensate the market businesses 100% of the losses that may be suffered due to their proposed housing and office development scheme. This raises the question, should Yoo Capital take on a scheme if they are not prepared to bear the full responsibility of the repercussions that may be incurred?
39) Further to this: -
(i) Should Yoo Capital not reimburse the Shepherd’s Bush Market tenants 100% of the losses which are incurred by the market businesses? Yoo Capital’s wish to merely be liable for a minor percentage of the market businesses’ losses may not be viewed as fair or proper.
(ii) Should Yoo Capital reimburse the Shepherd’s Bush Market tenants for the losses suffered throughout the whole duration of the development, which is estimated to be 3 to 4 years? Yoo Capital’s wishes to only reimburse for a limited duration of only the initial 2 years may be viewed to be unreasonable, especially as the market tenants may still suffer various inconveniences including noise and air pollution throughout the full duration of the scheme.
(iii) Is it fair for Yoo Capital to place a maximum cap on what losses may be reimbursed to a market business? The Shepherd’s Bush Market businesses may be considered as modest and delicate businesses, working exceedingly hard for minimal profits. Yoo Capital not being prepared to reimburse these businesses the full loss which is suffered may result in the financial detriment causing the closure of the businesses. Is this considered to be fair?
40) The SBMTA asks Yoo Capital for a written explanation as to why the small ethnically diverse market businesses of Shepherd’s Bush Market should endue the repercussions of Yoo Capital’s actions if it places the market traders’ livelihoods at risk, merely because the Hammersmith & Fulham Council have enabled the opportunity for a housing and office development to be built with the inclusion of the Hammersmith & Fulham Council neighbouring land, known as the Old Laundry Site Area.
Encouraging Rivalry
41) The meeting on the 23rd of August 2021 raised the discussion of whether Yoo Capital’s employees had allegedly tried to encourage certain market individuals to rival in opposition to the Shepherd’s Bush Market Tenant’s Association.
42) The SBMTA expressed the view that Yoo Capital should be accountable for the actions of its employees. Yoo Capital agreed that they were, and confirmed that they would issue in writing, to the SBMTA, a statement that none of Yoo Capital’s employees had or will encourage other market tenants to rival against the Association. The SBMTA will appreciate Yoo Capital’s written gesture when received.
Yoo Capital’s delay in the issuing information
43) Query was raised on the 23rd of August 2021 by the SBMTA as to why Yoo Capital had exhibited a significant delay in sending Yoo Capital’s proposal document to the SBMTA, despite Yoo Capital promising to send the information several weeks earlier and the repeated delay leading to the SBMTA issuing three further written correspondences to prompt Yoo Capital for the information.
44) Yoo Capital’s given reason for the delay was that they claimed, ‘they were busy’.
Increased Uncertainty
45) The 2016 judgement of ‘Horada & Ors v Secretary of State for Communities and Local Government & Ors’ [2016] EWCA Civ 169 presses the importance of the Shepherd’s Bush Market traders holding comprehensive and robust safeguards in order to survive and protect themselves against the uncertainty and troubles which may be associated with an invasive scheme.
46) The SBMTA discussed with Yoo Capital on the 23rd of August 2021, the assurance of market businesses being entitled to implement ‘Tenant Only Brake Options’ on long leases which may be executed by the tenant, with 12 months’ notice, at any time, so to ensure that the tenant is not entrapped in a financially damning situation due to uncertainties caused by Yoo Capital’s proposals.
47) Yoo Capital’s housing & office development understandably raises uncertainty for the market community, and Yoo Capital’s further wish to alter the Shepherd’s Bush Market leases invokes further complications and difficulties for the market businesses.
Tenants’ opting for the option of a sabbatical
48) Yoo Capital has stated on the 23rd of August 2021 that market tenants who are considering Yoo Capital’s offer to take a sabbatical from Shepherd’s Bush Market may have to be absent from the market for a full 2 years and may not return at an earlier date. Yoo Capital has confirmed that the leaseholders will retain their lease(s) of their premises, and the premises will remain closed and left in the same order as when the tenant left their premises, therefore the tenants’ stock, fixtures, and fittings may remain safe in the premises.
49) Yoo Capital has stated that they will bear the cost of the Business Rates for the duration of the sabbatical if the tenant is liable.
50) Members of the SBMTA have raised the concern that if the retention of the market traders falls significantly due to businesses closing and being absent due to Yoo Capital’s sabbatical option, then, will the businesses who remain trading in the market during the potential development be left to cope in that which may resemble some sort of deserted ghost town.
51) The SBMTA is keen to discuss this matter with the Hammersmith & Fulham Council and to gain a greater understanding as to whether the Hammersmith & Fulham Council’s manifesto and planning policies will actively protect the Shepherd’s Bush Market businesses.
52) The SBMTA has written to the Hammersmith & Fulham Council and is currently waiting for the Leader of the Council, Councillor Stephen Cowan to schedule a meet with the SBMTA Committee.
Remaining Agenda Items
53) Unfortunately, the duration of the zoom meeting held on Monday 23rd August 2021 did not accommodate the SBMTA’s further enquiries. This includes the matters relating to: -
§ Options for the leaseholders to sublet their premises.
§ Tenants’ ‘Rights to Assign’.
§ Retention of the 2003 Service Charge Agreement within the leases.
§ The retention of Service Charge Cap stipulations for all tenancies.
§ The restoration and adequate funding of the poor condition of the Shepherd’s Bush Market Arches.
§ Yoo Capital’s proposal designs for new market stalls and their ability to deliver equal quality, value, capacity, and square area, in comparison to the tenants’ existing stalls.
54) It is hoped that these further enquiries will be tackled in further written correspondences in the coming weeks and at another scheduled zoom meeting when convenient for Yoo Capital and the SBMTA.
Yours sincerely,
The Shepherd’s Bush Market Tenants’ Association
[1] Judgement relating to ‘Horada & Ors v Secretary of State for Communities and Local Government & Ors’ [2016] EWCA Civ 169
https://www.bailii.org/ew/cases/EWCA/Civ/2016/169.html