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Hannah Morphet
Professional Support Lawyer
From 6 April 2017 the Homes and Communities Agency (HCA), which regulates the provision of social housing in England, will move away from its current consents regime to a new ‘notification and registration’ regime. This follows changes brought in by the Housing and Planning Act 2016.
Professional Support Lawyer
Ahead of the changes coming into effect, the HCA has published guidance and directions for providers about how the new regime will work. They are relevant to both non-profit and profit-making providers of social housing, as well as those who intend to register as providers, and cover three areas:
Disposals requiring notification fall broadly into three types:
The notification requirements will differ depending on the provider’s size as a result of other standard returns that are already made to the HCA. Small providers (those with fewer than 1,000 social housing dwellings) will be required to notify the HCA if they dispose of 5% or more of the total stock of dwellings in a single transaction. Large providers (those with more than 1,000 social housing dwellings) are not. Small providers disposing to raise any type of finance are required to notify, whereas large providers need only notify if they are disposing to obtain non-standard types of finance.
In addition, there are differing notification deadlines depending on the type of disposal. Certain disposals require ‘priority notification’ to be made within three weeks of the disposal. All other notifiable disposals must be notified to the HCA on a quarterly basis.
The removal of the HCA consent regime will have a significant impact on providers who are non-exempt charities. These charitable providers were previously exempt from the requirements of charity law because approval for disposal was required from the HCA. This exemption will no longer apply to non-exempt charity providers who will now need to comply with sections 117 – 121 of the Charities Act 2011 when disposing of property. This will mean these charities will need to consider which of their disposals require compliance by self-certification following surveyor’s advice on value, which are exempt under other provisions of the Charities Act and which may require consent from the Charity Commission.
At present, providers are required to obtain the HCA’s prior consent in relation to a wide range of corporate restructures, such as transfers, amalgamations, conversions and group reorganisations, as well as dissolutions. This requirement will be removed, and the headline is that providers will instead need to notify the HCA after the relevant changes have been made. However:
The registration decision stage underscores the importance of early communication with the HCA about the organisation’s plans: if providers’ plans are likely to cause problems at the stage of the registrations decision, they should be worked through ahead of time in correspondence with the HCA.
Although the HCA will begin charging fees for certain services from October 2017, the guidance confirms that restructured bodies will not be charged a fee for this type of registration decision.
Conversely, where the registered provider is making relevant changes to its constitution which do not restructure, such as a change to its objects, the HCA should now generally be notified after the changes have been filed with the registrar (within 10 working days of the relevant resolution being registered).
Encouragingly, the HCA has added express acknowledgment that in assessing an applicant’s compliance with the registration criteria, it will recognise that applicants will be at different stages in their development and it will take a proportionate approach in assessing compliance. The guidance includes more detailed information specifically aimed at providers that are registered as Charitable Incorporated Organisations (CIOs) than previously, including recognition of the constraints that particularly affect CIOs.
Less encouragingly, from October 2017, a fee of £2,500 will be introduced for a successful application for registration.
Of course, it remains to be seen how the HCA will implement all these changes in practice. In particular, it will be interesting to see how it approaches restructures and the resulting registration decisions; there are obvious potential pitfalls in assessing a provider’s compliance with registration criteria after the relevant changes have taken place. We hope to see the HCA adopt a pragmatic and collaborative approach in its implementation of the new regime.
The guidance and directions are available from the HCA’s website here.
Please contact our Social Housing team if you would like more information on how your organisation may be affected by these changes.
This information is necessarily of a general nature and doesn’t constitute legal advice. This is not a substitute for formal legal advice, given in the context of full information under an engagement with Bates Wells.
All content on this page is correct as of March 29, 2017.