5  Transfers Between RSLs and to RSLs

5.1  General

5.1.1  Where an RSL wishes to transfer property or land to another RSL, the TSA's prior consent to the disposal is required under Section 9 of the Housing Act 1996.

Depending on whether the property is tenanted, such transfers may be permitted by the General Consent 2008. If not so permitted,  an RSL would need to apply, on form HACON 2, for an individual consent.  The application should go to Consents Section in Leicester.

5.1.2  RSLs must notify any local authority that has an interest in the property.

5.1.3  The transfer of properties procedure does not apply when RSLs enter into management agreements without a change of property ownership (please see Management Arrangement chapter).

5.1.4  The transfer of properties procedure does not apply when RSLs dispose of their entire stock to another RSL, known as Transfer Of Engagement. On these occasions RSLs should seek further advice from the TSA's Registry section. 

5.1.5  The disposing RSL must comply with the terms of any loan secured on the property.

For all transfers between or to RSLs, where the property concerned has been developed with capital grant, receiving RSLs must maintain adequate records of that capital grant for future reference should that property become subject to grant recovery. Please see RCGF - 3.23

5.2 Section 9 Consent

5.2.1 Information on disposals and consents is contained in Housing Corporation Circular 01/08.

5.3 Notification of Change of Ownership

5.3.1 Where property has received Housing Association Grant (HAG), or Social Housing Grant (SHG), (including Recycled Capital Grant Fund, Disposal Proceeds Fund or Rent Surplus Fund) RSLs must advise the Agency immediately the ownership of that property, or properties, has changed and no more than 30 days after the date of completion.

5.4 Procedural Requirements

5.4.1  Immediately following the transfer or disposal of a property the donor RSL must inform the Regional Investment Team (where the property is located) in writing titled “Request to Process and Notify a Transfer of Property” and ask to be sent form TOP 1 (R)

5.4.2 On receipt of a request as above Regional Office investment staff will, within 10 working days, acknowledge receipt of the request and send the donor RSL a copy of the procedures and guidance for completion of TOP 1 (R) together with a copy of the form.

5.4.3 Completion and approval of form TOP 1 (R)

Prior to completion of the form RSLs must ensure they meet the following conditions:

• The donor RSL must confirm that all relevant legal processes to transfer the property to the recipient RSL have been completed;
• Both donor and recipient RSLs must confirm that the TOP 1 (R) will be completed by an authorised signatory; 
• Both donor and recipient RSLs must agree to accept that the Agency must protect public funds;
• Both donor and recipient RSLs must agree to accept that the Agency may use the information provided in this form to prevent and detect fraud;
• Both donor and recipient RSLs must agree to accept that the Agency may share the information with other organisations that handle public funds;
• Both donor and recipient RSLs must agree to accept that the Agency may use the information provided for statistical surveys and related purposes;
• Both donor and recipient RSLs must agree to accept that the Agency may pass this information in confidence to the Department of Communities and Local Government and agencies working on its and the HCA's behalf;
• Recipient RSLs must confirm that they are to be held accountable for the Agency's investment in property/properties received from the donor RSL as stated on TOP 1 (R );
• Recipient RSLs must confirm that they will adhere to the Agency's conditions regarding recovery of Capital Grants as detailed in the Agency’s Affordable Housing Capital Funding Guide for property/properties received from the donor RSL.

5.4.4 Following completion by an authorised signatory RSLs must return the completed TOP 1 (R) to the regional office.

5.4.5 Regional investment staff will examine the form, in line with internal procedures, to ensure it has been fully and correctly completed before approving it and forwarding it to the Investment Performance Team at Maple House.

5.4.6 Within 20 days of receipt of a regional office approval Maple House will notify the regional office, the donor and the recipient RSLs of the effective change together with an IMS TOP reference number in writing titled “IMS TOP Request Approval and Notification”.

5.4.7 For all regional enquiries relating to a Transfer of Property, the regional reference number must be quoted and the IMS TOP reference number must be quoted.

5.5 Transferred from Local Authorities and Other Public Sector Bodies

5.5.1 Housing transfers (stock transferred from public sector bodies to RSLs) are designed to be fully funded over the period of the business plan without additional SHG.

5.5.2 The SHG Determination, states that grant shall not be paid towards the cost of acquiring or improving tenanted stock acquired from a public sector body.  The CLG Housing Transfer Guidance, says that the valuation and the RSLs Business Plan should provide for all works required over a 30 year period as a minimum, taking account of demand, viability and stock restructuring.  Where there are known plans for regeneration, the housing costs should also be included in the Business Plan.

5.5.3 In exceptional circumstances SHG may be available for repair, improvement, demolition and replacement or new development.  In some cases this will depend on the date of transfer.

5.5.4 When drawing up their Business Plans and considering future investment needs, RSLs cannot assume that SHG will be available at any point in the future.  The Agency will not consider bids for SHG unless the proposals fit with the priorities for investment in the Regional Housing Board Strategies and the resources are available. For further guidance please follow asterisk 

 

5.5.5 Cases will only be considered for funding where the works are essential to provide good quality homes for the residents and the additional cost cannot be managed by adjustments to the Business Plan. For further guidance follow the asterisk 

 

5.5.6 Where RSLs are subsidising new SHG development, either on the transfer site or elsewhere, or is subsidising non-SHG eligible activities, they will have to put forward an additional case to support their application for funding.

5.5.7 As the Recycled Capital Grant Fund can only be used for works which would in principle qualify for SHG, the contents of this section also apply to the use of the Fund. 

5.5.8 Types of work

Major Repairs 

 
Improvements and remodelling 

Demolition and rebuilding 

 

5.5.9 Investment regions will make decisions about funding in the context of Regional Housing Board/Strategy and local priorities.  Requests for funding will be considered in the context of the overall programme and if it is not deemed to be of sufficient priority or resources are not available, it will not be funded, even if the circumstances set out above apply.

5.5.10 Where funding is made available, SHG will only be paid on a ‘works only’ basis.

5.5.11 For stock transferred before 1 April 1997, SHG may be available for redevelopment on an acquisition and works basis with the eligible acquisition cost being the lower of the outstanding attributable debt or the current valuation.  This would only be on an exceptional basis where the project was accorded the highest priority by the local authority.  RSLs must be able to demonstrate that at the time of transfer the valuation assumed a continuing rental stream from those units and that it was reasonable to do so i.e. there were no plans to demolish.

New development of vacant sites 

 

Transfers of tenanted stock from other public sector bodies 

 

 

5.6 Transfers from Un-registered bodies (URBs) to RSLs

5.6.1 Where an RSL is receiving property from a URB as part of a transfer the following procedures should be followed.

5.6.2 URBs which have received grant under Section 27A of the 2004 Housing Act, and any units developed by URBs, will have been subject to the same conditions as if they were developed by RSLs.  This includes the rent regime for property developed for letting and the rent charged on unsold equity on NBHB. These will have been set in accordance with the Scheme Details schedule in the Grant Agreement

5.6.3 Once property has been transferred from the URB to the RSL, the RSL is obliged to ensure that the Agency's requirements as set out in the Prospectus and in relation to issues such as rents are adhered to.  This will be subject to compliance audit. See also Recovery Determination (25).

5.6.4 Property Developed for Rent by URBs

Where Rented properties are transferred to an RSL from a URB on completion, the setting of rents on these properties is covered by the Regulatory Code and Guidance. This requires rents on Affordable Rented property to be set in accordance with the rent restructuring formula. Please see Housing for Rent - Rent - Rents for more information.

5.6.5 Property Developed for Sale by URBs

Where NBHB properties are transferred to an RSL from a URB, Rents must be no more than 3% of unsold equity Please see Housing for Sale - NBHB - Rents for more information.

5.6.6 Reporting and Audit Requirements for RSLs

5.6.6.1 For property developed for Rent and Sale and which has been transferred to the RSL, the RSL must send a letter to the URB outlining that it will adhere to the conditions of grant payment attached to the properties in respect of rents charged, service charges and ongoing management and marketing arrangements etc. A copy of this letter must also be sent to the Corporation's regional office.

5.6.6.2 For NBHB property transferred to RSLs, the RSL must enter initial sales data etc on IMS from the point of transfer.

5.6.7 Once property has been transferred from a URB to an RSL the grant liability rests with the RSL. Grant which was paid under S27A is now treated as though it were paid under  Section 18 and the usual grant recovery principles apply. Please see RCGF - Calculation of net sales receipts 3.23.2 for more information