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Fears for Fife firm Lomond Homes over debt to council

A Lomond Homes housing site in Lochgelly.
A Lomond Homes housing site in Lochgelly.

FEARS HAVE been expressed for the financial viability of a leading Fife housing developer, after Fife Council started “regrettable” legal action to claw back an outstanding debt of almost half a million pounds.

The local authority took initial action on Friday to recover £494,000 from Lomond Homes, money that is outstanding in relation to two legally-binding Section 75 Planning Agreements for developments in Blairhall and Lochgelly.

Sheriff officers were asked to serve a short form demand on Friday requesting payment within 48 hours to avoid the council petitioning the court for the liquidation of the Glenrothes-based company, part of the wider family-owned Lomond Group.

An internal memo, issued by the council on Friday and seen by The Courier, stated: “This note is to provide an update on the current position with debt recovery in relation to Lomond Homes and to advise of action being taken to safeguard the council’s interests.

“A debt of £494,000 is outstanding in relation to two Section 75 Planning Agreements for developments in Blairhall and Lochgelly.

“There is a significant level of concern about the financial viability of the company and we have come to an impasse in discussions to agree a payment arrangement.

“The company have failed to meet deadline dates and provide the information requested. We are taking further action to recover the debt and protect the council’s position.

“Sheriff officers have been asked to serve a short form demand today requesting payment within 48 hours to avoid the council petitioning the court for the liquidation of the company.

“It is regrettable the council has to use these measures but it must ensure the most effective recovery action is taken in pursuing the debt and safeguarding public money.”

With the recession taking its toll on the housing sector, there has been previous speculation about the financial viability of Lomond Homes at a time when Fife Council has its own financial challenges it needs to save £66 million over the next three years.

One councillor said it had been like “watching an 18-month car crash” as Lomond Homes’ debts mounted.

The organisers of a community news website in Lochgelly have been among those closely monitoring the activities of Lomond Homes with regard to its Section 75 agreement, which legally binds the developer to make a financial or construction contribution to the community to help improve the town.

Through a Freedom of Information request they learned that Lomond Homes was still due to pay £300,000 towards the town’s New Farm Vale development of more than 60 homes.

Residents have complained that lighting, pavements and roadworks remain incomplete.

Website spokesman James Glen said: “Our group is quite concerned.

“There have been rumours that Lomond Homes will be closing to avoid paying the Section 75 monies.

“There has recently been another application for Lomond Avenue, next to New Farm Vale, by a Lomond Group company called Lomond Land.

“We feel it is highly inappropriate for Lomond to be given any further planning permission in the Fife area until they agree upon their previously agreed debts.”

Lochgelly councillor Mark Hood said: “We expect Lomond Homes to continue to meet their obligations to the people of Lochgelly and Blairhall who in good faith have been trying to work with this developer and have so far been let down by the way the developer has chosen to treat people in these communities.”

Brian Livingston, the council’s executive director of finance and resources, said: “We have been working with Lomond Homes for some time to try to find a resolution to this matter.

“We will continue to do all we can to reach a satisfactory outcome.”

The Courier made repeated efforts to contact Lomond Homes and parent company the Lomond Group but got no response.

malexander@thecourier.co.uk