“Disposing of Land” is a guidance document issued by the Homes and Communities Agency (HCA) to help Private Registered Provider’s understand the HCA’s approach to their decision making in respect of disposals of social housing dwellings and other land under the general consent or specific consent regimes.
The HCA updated this document on 2 December 2014 to provide clarification and / or extra requirements in relation to a number of criteria that the HCA consider in their decision making process. This note provides an overview of the changes made.
Applications for specific consent
Paragraph 3.6 (a) – Disposals of tenanted social housing dwellings to any other persons than another registered provider or the tenant.
This has been amended to include principles which the HCA would want to see being adhered to in relation to such disposals. These are as follows:-
- Adequate protection must be in place for the tenants affected and the HCA would expect this to be regulation by another authority whose control is likely to be sufficient.
- Such disposals should be at best consideration and this would be expected to be at Open Market Value.
- Appropriate protections must be put in place regarding the loss of any Right to Buy / Right to Acquire that may result from the disposal.
Paragraph 3.6 (b) – Disposals at less than best consideration
This now includes a provision that the HCA may be prepared to agree to a sale at less than best consideration where the provider makes a strong business case for this. This is further qualified however, with a statement that the HCA would not normally consent to a sale at less than best consideration in respect of tenanted disposals outside of the sector.
The Consideration
Paragraph 3.9 – HCA requirement for best consideration as assessed by an independent qualified valuer
The HCA have further emphasised that best consideration here will generally be equal to Open Market Value. They go on however to provide that there may be cases where a disposal at less than the market value enables additional future financial gains through a wider business transaction. Where this is the case, they acknowledge that the sale may represent best consideration.
Furthermore they have added that there may be cases where the HCA would accept best consideration as being above the open market value and that where this is the proposal, providers must make the case for this.
Paragraph 3.10 – Less than best consideration
This has been amended to provide another scenario where a provider may dispose of dwelling at less than best consideration. This is in respect of a home ownership initiative such as ‘homesteading.’ The HCA confirms that the provider would need to demonstrate why this type of intervention into the market was necessary and provide information on the reasonableness of the discount (especially where the discount is greater than that available under Right to Acquire, Right to Buy or Social Homebuy). They also state that details of any conditions attached to the discount or restrictions on further sales of the property must be given to the HCA.
For more information please contact Julie Bradley.
