EDDC starts legal action after developer delays £9 million deal on former HQ

Council tax payers in Honiton have found out today that East Devon District Council has begun legal proceedings after the sale of its former Knowle HQ was not completed by the scheduled date.

Lifestory Group Limited (formerly known as Pegasus Life Ltd) were due to complete the purchase of the building in Sidmouth by Wednesday, December 18.

But councillor Ben Ingham, leader of the council, opened the full council meeting that evening by expressing his dismay that the sale had not been finalised.

Ownership of the site was due to be transferred to PegasusLife, who plan to and have permission for turning the building into a 113-apartment assisted living community, for £9,019,605.

East Devon District Council has now begun legal proceedings to 'protect its position', but developer PegasusLife has said it remains committed to completing the purchase of Knowle.

Councillor Ingham said: "The contractual completed sale of the Knowle was due to take place today. But I am sorry to have to advise the council that PegasusLife have not completed today and have instead asked for an extension for completion into the New Year.

"To protect the council's interest, we have found it necessary to implement legal proceedings to secure the agreed and contracted £9m payment, together with damages and any additional costs.

"It is deeply disappointing and surprising that a developer such as Lifestory Group Limited should seek an extension of this nature. This is a disappointing delay for the public and we will issue a press release to announce our dismay and to make clear to the public our legal action.

"The council has taken expert legal advice which has confirmed the strength of the council's position and remains confident that it will secure the £9m sale price plus associated costs and damages.

"There is no immediate impact on council finances for this financial year but if legal proceedings become protected then we will have to consider what the implications are for council budgets in the next financial year.

"In the meantime the council will continue to maintain security and other arrangements on the Knowle site."

Lifestory have outlined that they believe they can complete in the New Year.

Mark Dickinson, chief executive officer of PegasusLife, in a statement, said: "Unfortunately, due to the need to secure funding from alternative sources we have been unable to meet the 18th December sale and purchase completion date.

"We believe we will be in a position to do so by January 14, 2020. This position has been shared with the council over the past couple of months.

"We hope to be able to continue to work in a positive manner with the council."

Planning permission has been granted to convert the former council HQ into a 113-apartment assisted living community.

The new Honiton HQ, which replaces The Knowle, cost the council £8.7m, while an additional £1.5m was spent on upgrading Exmouth town hall where one third of the council staff are to be based.