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Registered Providers rejoice – HCA consents are leaving us

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Registered Providers rejoice – HCA consents are leaving us

Registered Providers rejoice – HCA consents are leaving us

Registered Providers can ready the bunting and don their party hats over the coming weeks.

From the beginning of April the problematic consents regime for disposals of social housing by Registered Providers will be a thing of the past. The party starter is the (rather non-glamorously, albeit concisely, named) Housing and Planning Act 2016 (commencement No. 4 and Transitional Provisions) Regulations 2017 (SI 2017 No. 75) (“Regulations”) which bring section 92 and Schedule 4 of the Housing and Planning Act 2016 (“HPA”) into effect from 6 April 2017.

The background to this change is (as in most cases) financial. In 2015 the Office for National Statistics (the “ONS”) decided, in its wisdom, that the government could not have its cake and eat it. If they wanted to regulate (among other things) the social housing sector’s ability to dispose of its assets and the sector’s ability to deal with proceeds from such disposals, then the sector would need to be reclassified for ONS purposes as a public sector and all the debts associated with the sector would likewise move to the public balance sheet. This drew an instant and concerned response from government that it would take steps to return RPs to the private sector balance sheet as soon as possible. One such step is the Regulations.

So what is the effect of this piece of legislative eclat?

Currently, as every registered provider (“RP”) knows only too well, disposals of certain types of interests in land by an RP need prior consent from the Homes and Communities Agency (“HCA”), either by utilising the General Consent (with certification DC5) or by applying for a specific consent with one of forms DC1 to DC6 (as appropriate). A disposal without such consent runs the risk of being void, which will generate a multitude of problems for the RP in question – from a particularly aggrieved purchaser left with no land, to the HCA looking to downgrade the RP’s governance rating, to a subsequent problem with funders. However, the alternative (in many cases) is an often frustrating period of time needing to be set aside to obtain such consent in advance, or even (in a lot of cases) an enquiry as to whether such consent is even needed. This requirement is set to be relaxed by the Regulations from 6 April. It will do this by bringing Schedule 4 of the HPA into effect, thus amending a multitude of references throughout the Housing and Regeneration Act and the numerous Housing Acts, so as to remove the requirement for RPs to seek consent from the HCA to dispose of their social housing dwellings.

In terms of the detail, the changes are:

  1. the Housing Act 1985 – a new section 2ZA of section 171D is inserted stating that section 171D (restrictions on disposing of housing obtained subject to preserved right to buy) does not apply to a disposal by an RP and reference to the HCA as an “appropriate authority” for consent purposes, and to the requirements of section 172 of the Housing and Regeneration Act, is deleted;
  2. The Housing Act 1988 - Section 81 is amended to provide that a disposal of a property subject to a secured tenancy by a HAT to an RP will no longer require the RP to obtain HCA consent to subsequent disposals
  3. the Local Government and Housing Act 1989:
    i) a new section 1B of section 133 is inserted stating that section 133 (restrictions on disposing of housing obtained from local authorities) does not apply where the original disposal was to an RP; and
    ii) a new section 1ZA is inserted into section 173 stating that section 173 (restrictions on disposing of housing obtained from new town corporations) does not apply to a disposal by an RP;
    and in both cases and reference to the HCA as an “appropriate authority” for consent purposes, and to the requirements of section 172 of the Housing and Regeneration Act, is deleted.
  4. The Housing and Regeneration Act 2008:
    i) Section 60(4) is amended to replace the requirement to obtain the consent of the regulator with a requirement to notify the regulator
    ii) A new section 74A is inserted which states that a disposal with a right of buy-back by an RP does not count as a disposal of social housing
    iii) Sections 172 to 175 (regarding requirements for consents to disposal) are deleted and section 176 is replaced with a requirement to notify the regulator (and for timescales for such notification to be specified by a future regulator)
    iv) Section 190 (regarding the transfer of the consents regime for (a), (b) and (c) above to the regulator) is deleted.

The overall result is to ensure that RPs need not seek HCA consent to disposals under the above regimes (though the requirement to notify must not be overlooked and a set form of notification may be prescribed under the amended legislation) and will only need to ensure they comply with any Charity Act requirements and governance requirements of the RP itself. In relative terms it is a small change, but in reality it will feel like a big one – worthy of at least some celebration among RPs and their advisers alike!

If you require any further information on these changes please contact any of our Social Housing Team members: Caroline Hayward, Lucy Jones or Kevin Edwards.