Out with the old and in with the new
The old consent regime to dispose of social housing dwellings and land has today been replaced with the duty to notify the HCA of any Relevant Disposals after the event. The duty to notify only applies to Relevant Disposals. Notification will be via the online NROSH+ Scheme and is submitted by the Registered Provider.
So, what constitutes a Relevant Disposal?
The regulator has set out three main categories of relevant disposal:
- Landlord Disposals – (Categories 1-5):
- out of sector disposals (whether the dwelling is occupied or not),
- within sector disposals (where the dwelling is occupied at the point of disposal),
- on the disposal of the last social housing dwelling,
- from a non-profit provider to a for-profit provider (whether the dwelling is occupied or not),
- disposal of 5% or more of social housing stock in a single transaction (Small Registered Providers only).
- Finance Disposals (Categories 6 and 7) – these include Standard Finance arrangements such as bonds or bank funding, but also include non-standard forms such as sale and leaseback arrangements. It is important to note that Small Registered Providers are required to notify the HCA in the event of any Finance Disposal (Category 6), whereas Large Registered providers need only notify to obtain Non Standard Finance Disposal (Category 7).
- Guarantee Disposals – (Category 8) – includes parent company guarantees (given to guarantee the performance of an associated company) or guarantee a debt or obligation of the provider.
Timescales for notification
1. Priority disposals need to be notified to the regulator within 3 weeks of the disposal.
Priority disposals include Category 1 (out of sector disposals of occupied dwellings), Category 3 (disposal of last social housing dwelling), Category 5 (Small Registered Providers disposal of more than 5% of social housing stock) and Category 6 (disposals made by Small Registered Providers to secure private finance).
2. All other relevant disposals are to be notified within 3 weeks of the relevant quarter.
We set out below some examples provided by the HCA in their Guidance Note of disposals for which notification will not be required (not an exhaustive list) are:
- Vacant social housing dwellings from one to another non-profit provider
- Social housing land not constituting a dwelling (including post demolition)
- Release of restrictive covenants over social housing land or dwellings
- Upon initial grant of an option (but please note this may be a Relevant Disposal when the option is exercised)
- Disposals of parts of dwellings, the solar panels, telecoms equipment etc.
- Disposal of parts of social housing dwellings such as parts of garden garages and rights of access
It is important to remember that the HCA will still have oversight and the ability to regulate through the Regulatory Framework and the use of regulatory gradings. The decision making process and evidence supporting a disposal will still be subject to scrutiny.
Another point to note is that the provisions of Part 7 of the Charities Act 2011 will still apply to those Registered Providers who are non-exempt Charities and are registered with the Charity Commission (not the FCA). This includes in some cases the need for pre-marketing certification from a Valuer.
Please find below the link to the published HCA Guidance to which you should always refer: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/603810/Guidance_-_Notification_of_disposals.pdf