Housing and Planning Bill (HL Bill 110)

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CHAPTER 5 Insolvency of registered providers of social housing

Housing administration

92 Housing administration order: providers of social housing in England

(1) 5In this Chapter “housing administration order” means an order which—

(a) is made by the court in relation to a private registered provider of social
housing that is—

(i) a company,

(ii) a registered society within the meaning of the Co-operative and
10Community Benefit Societies Act 2014, or

(iii) a charitable incorporated organisation within the meaning of
Part 11 of the Charities Act 2011, and

(b) directs that, while the order is in force, the provider’s affairs, business
and property are to be managed by a person appointed by the court.

(2) 15The person appointed for the purposes of the housing administration order is
referred to in this Chapter as the “housing administrator”.

(3) The housing administrator must—

(a) manage the provider’s affairs, business and property so as to achieve
the objective set out in section 93, and

(b) 20carry out all other functions so as to achieve that objective.

(4) In relation to a housing administration order applying to a registered provider
that is a foreign company, references in this section to the provider’s affairs,
business and property are references to its UK affairs, business and property.

93 Objective of housing administration

(1) 25The objective of a housing administration is to ensure that—

(a) that the registered provider’s social housing remains in the regulated
housing sector, and

(b) that it becomes unnecessary, by one or more of the following means, for
the housing administration order to remain in force for that purpose.

(2) 30Those means are—

(a) the rescue as a going concern of the registered provider, and

(b) relevant transfers of some or all of the registered provider’s
undertaking.

(3) A transfer is a “relevant” transfer if it is a transfer as a going concern to another
35private registered provider, or to two or more different providers, of so much
of the undertaking as it is appropriate to transfer for the purpose of achieving
the objective of the housing administration.

(4) The means by which relevant transfers may be effected in the case where the
registered provider subject to the order is a company include, in particular—

(a) 40a transfer of the undertaking of the registered provider subject to the
order, or of a part of its undertaking, to a wholly-owned subsidiary of
that provider, and

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(b) a transfer to a registered provider of securities of a wholly-owned
subsidiary to which there has been a transfer within paragraph (a).

(5) In subsection (4) “wholly-owned subsidiary” has the meaning given by section
1159 of the Companies Act 2006.

(6) 5The objective of a housing administration may be achieved by relevant
transfers to the extent only that—

(a) the rescue as a going concern of the registered provider is not
reasonably practicable or is not reasonably practicable without the
transfers,

(b) 10the rescue of the registered provider as a going concern would not
achieve the objective of the housing administration or would not do so
without the transfers,

(c) the transfers would produce a result for the registered provider’s
creditors as a whole that is better than the result that would be
15produced without them, or

(d) the transfers would, without prejudicing the interests of the registered
provider’s creditors as a whole, produce a result for the registered
provider’s members as a whole that is better than the result that would
be produced without them.

(7) 20In the case of a charitable incorporated organisation, the reference in
subsection (6)(d) to the registered provider’s members is to be read as a
reference to the charitable incorporated organisation.

(8) For the purposes of subsection (1)(a) social housing remains in the regulated
housing sector for so long as it is owned by a private registered provider.

94 25Applications for housing administration orders

(1) An application for a housing administration order may be made only—

(a) by the Secretary of State, or

(b) with the consent of the Secretary of State, by the Regulator of Social
Housing.

(2) 30The applicant for a housing administration order in relation to a registered
provider must give notice of the application to—

(a) every person who has appointed an administrative receiver of the
provider,

(b) every person who is or may be entitled to appoint an administrative
35receiver of the registered provider,

(c)
every person who is or may be entitled to make an appointment in
relation to the registered provider under paragraph 14 of Schedule B1
to the Insolvency Act 1986 (appointment of administrators by holders
of floating charges), and

(d) 40any other persons specified by housing administration rules.

(3) The notice must be given as soon as possible after the making of the
application.

(4) In this section “administrative receiver” means—

(a) an administrative receiver within the meaning given by section 251 of
45the Insolvency Act 1986 for the purposes of Parts 1 to 7 of that Act, or

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(b) in relation to a foreign company, a person whose functions are
equivalent to those of an administrative receiver and relate only to its
UK affairs, business and property.

95 Powers of court

(1) 5On hearing an application for a housing administration order, the court has the
following powers—

(a) it may make the order,

(b) it may dismiss the application,

(c) it may adjourn the hearing conditionally or unconditionally,

(d) 10it may make an interim order,

(e) it may treat the application as a winding-up petition and make any
order the court could make under section 125 of the Insolvency Act
1986 (power of court on hearing winding-up petition), and

(f) it may make any other order which it thinks appropriate.

(2) 15The court may make a housing administration order in relation to a registered
provider only if it is satisfied—

(a) that the registered provider is unable, or is likely to be unable, to pay its
debts, or

(b) that, on a petition by the Secretary of State under section 124A of the
20Insolvency Act 1986, it would be just and equitable (disregarding the
objective of the housing administration) to wind up the registered
provider in the public interest.

(3) The court may not make a housing administration order on the ground set out
in subsection (2)(b) unless the Secretary of State has certified to the court that
25the case is one in which the Secretary of State considers (disregarding the
objective of the housing administration) that it would be appropriate to
petition under section 124A of the Insolvency Act 1986.

(4) The court has no power to make a housing administration order in relation to
a registered provider which—

(a) 30is in administration under Schedule B1 to the Insolvency Act 1986, or

(b) has gone into liquidation (within the meaning of section 247(2) of the
Insolvency Act 1986).

(5) A housing administration order comes into force—

(a) at the time appointed by the court, or

(b) 35if no time is appointed by the court, when the order is made.

(6) An interim order under subsection (1)(d) may, in particular—

(a) restrict the exercise of a power of the registered provider or of its
relevant officers, or

(b) make provision conferring a discretion on a person qualified to act as
40an insolvency practitioner in relation to the registered provider.

(7) In subsection (6)(a) “relevant officer”—

(a) in relation to a company, means a director,

(b) in relation to a registered society, means a member of the management
committee or other directing body of the society, and

(c) 45in relation to a charitable incorporated organisation, means a charity
trustee (as defined by section 177 of the Charities Act 2011).

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(8) In the case of a foreign company, subsection (6)(a) is to be read as a reference
to restricting the exercise of a power of the registered provider or of its
directors—

(a) within the United Kingdom, or

(b) 5in relation to the company’s UK affairs, business or property.

(9) For the purposes of this section a registered provider is unable to pay its debts
if—

(a) it is deemed to be unable to pay its debts under section 123 of the
Insolvency Act 1986, or

(b) 10it is an unregistered company which is deemed, as a result of any of
sections 222 to 224 of the Insolvency Act 1986, to be so unable for the
purposes of section 221 of that Act, or which would be so deemed if it
were an unregistered company for the purposes of those sections.

96 Housing administrators

(1) 15The housing administrator of a registered provider—

(a) is an officer of the court, and

(b) in carrying out functions in relation to the registered provider, is the
registered provider’s agent.

(2) The management by the housing administrator of a registered provider of any
20of its affairs, business or property must be carried out for the purpose of
achieving the objective of the housing administration as quickly and as
efficiently as is reasonably practicable.

(3) The housing administrator of a registered provider must carry out functions in
the way which, so far as it is consistent with the objective of the housing
25administration to do so, best protects—

(a) the interests of the registered provider’s creditors as a whole, and

(b) subject to those interests, the interests of the registered provider’s
members as a whole.

(4) In the case of a charitable incorporated organisation, the reference in
30subsection (3)(b) to the interests of members is to the interests of the charitable
incorporated organisation.

(5) A person is not to be the housing administrator of a registered provider unless
qualified to act as an insolvency practitioner in relation to the registered
provider.

(6) 35If the court appoints two or more persons as the housing administrator of a
registered provider, the appointment must set out—

(a) which (if any) of the functions of a housing administrator are to be
carried out only by the appointees acting jointly,

(b) the circumstances (if any) in which functions of a housing
40administrator are functions of one of the appointees, or by particular
appointees, acting alone, and

(c) the circumstances (if any) in which things done in relation to one of the
appointees, or in relation to particular appointees, are to be treated as
done in relation to all of them.

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97 Conduct of administration etc

(1) Schedule 5 contains provision applying the provisions of Schedule B1 to the
Insolvency Act 1986, and certain other legislation, to housing administration
orders in relation to companies.

(2) 5The Secretary of State may by regulations provide for any provision of
Schedule B1 to the Insolvency Act 1986 or any other insolvency legislation to
apply, with or without modifications, to cases where a housing administration
order is made in relation to a registered society or a charitable incorporated
organisation.

(3) 10The Secretary of State may by regulations modify any insolvency legislation as
it applies in relation to a registered society or a charitable incorporated
organisation if the Secretary State considers the modifications are appropriate
in connection with any provision made by or under this Chapter.

(4) In subsection (3) “insolvency legislation” means—

(a) 15the Insolvency Act 1986, or

(b) any other legislation (whenever passed or made) that relates to
insolvency or makes provision by reference to anything that is or may
be done under the Insolvency Act 1986.

(5) The power to make rules under section 411 of the Insolvency Act 1986 is to
20apply for the purpose of giving effect to this Chapter as it applies for the
purpose of giving effect to Parts 1 to 7 of that Act (and, accordingly, as if
references in that section to those Parts included references to this Chapter).

(6) Section 413(2) of the Insolvency Act 1986 (duty to consult Insolvency Rules
Committee about rules) does not apply to rules made under section 411 of that
25Act as a result of this section.

Restrictions on other insolvency procedures

98 Winding-up orders

(1) This section applies if a person other than the Secretary of State petitions for the
winding-up of a registered provider that is—

(a) 30a company,

(b) a registered society within the meaning of the Co-operative and
Community Benefit Societies Act 2014, or

(c) a charitable incorporated organisation within the meaning of Part 11 of
the Charities Act 2011.

(2) 35The court may not exercise its powers on a winding-up petition unless—

(a) notice of the petition has been given to the Regulator of Social Housing,
and

(b) a period of at least 28 days has elapsed since that notice was given.

(3)
If an application for a housing administration order in relation to the registered
40provider is made to the court in accordance with section 94 before a winding-
up order is made on the petition, the court may exercise its powers under
section 95 (instead of exercising its powers on the petition).

(4) The Regulator of Social Housing must give the Secretary of State a copy of any
notice given under subsection (2)(a).

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(5) References in this section to the court’s powers on a winding-up petition are
to—

(a) its powers under section 125 of the Insolvency Act 1986 (other than its
power of adjournment), and

(b) 5its powers under section 135 of the Insolvency Act 1986.

99 Voluntary winding up

(1) This section applies to a private registered provider that is—

(a) a company,

(b) a registered society within the meaning of the Co-operative and
10Community Benefit Societies Act 2014, or

(c) a charitable incorporated organisation within the meaning of Part 11 of
the Charities Act 2011.

(2) The registered provider has no power to pass a resolution for voluntary
winding up without the permission of the court.

(3) 15Permission may be granted by the court only on an application made by the
registered provider.

(4) The court may not grant permission unless—

(a) notice of the application has been given to the Regulator of Social
Housing, and

(b) 20a period of at least 28 days has elapsed since that notice was given.

(5) If an application for a housing administration order in relation to the registered
provider is made to the court in accordance with section 94 after an application
for permission under this section has been made and before it is granted, the
court may exercise its powers under section 95.

(6) 25The Regulator of Social Housing must give the Secretary of State a copy of any
notice given under subsection (4)(a).

(7) In this section “a resolution for voluntary winding up” has the same meaning
as in the Insolvency Act 1986.

100 Making of ordinary administration orders

(1) 30This section applies if a person other than the Secretary of State makes an
ordinary administration application in relation to a private registered provider
that is—

(a) a company,

(b) a registered society within the meaning of the Co-operative and
35Community Benefit Societies Act 2014, or

(c) a charitable incorporated organisation within the meaning of Part 11 of
the Charities Act 2011.

(2) The court must dismiss the application if—

(a) a housing administration order is in force in relation to the registered
40provider, or

(b) a housing administration order has been made in relation to the
registered provider but is not yet in force.

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(3) If subsection (2) does not apply, the court, on hearing the application, must not
exercise its powers under paragraph 13 of Schedule B1 to the Insolvency Act
1986 (other than its power of adjournment) unless—

(a) notice of the application has been given to the Regulator of Social
5Housing,

(b) a period of at least 28 days has elapsed since that notice was given, and

(c) there is no application for a housing administration order which is
outstanding.

(4) The Regulator of Social Housing must give the Secretary of State a copy of any
10notice given under subsection (3)(a).

(5) Paragraph 44 of Schedule B1 to the Insolvency Act 1986 (interim moratorium)
does not prevent, or require the permission of the court for, the making of an
application for a housing administration order.

(6) On the making of a housing administration order in relation to a registered
15provider, the court must dismiss any ordinary administration application
made in relation to the registered provider which is outstanding.

(7) In this section “ordinary administration application” means an application in
accordance with paragraph 12 of Schedule B1 to the Insolvency Act 1986.

101 Administrator appointments by creditors

(1) 20Subsections (2) to (4) make provision about appointments under paragraph 14
or 22 of Schedule B1 to the Insolvency Act 1986 (powers to appoint
administrators) in relation to a private registered provider that is—

(a) a company,

(b) a registered society within the meaning of the Co-operative and
25Community Benefit Societies Act 2014, or

(c) a charitable incorporated organisation within the meaning of Part 11 of
the Charities Act 2011.

(2) If in any case—

(a) a housing administration order is in force in relation to the registered
30provider,

(b) a housing administration order has been made in relation to the
registered provider but is not yet in force, or

(c) an application for a housing administration order in relation to the
registered provider is outstanding,

35a person may not take any step to make an appointment.

(3) In any other case, an appointment takes effect only if each of the following
conditions are met.

(4) The conditions are—

(a) that notice of the appointment has been given to the Regulator of Social
40Housing, accompanied by a copy of every document in relation to the
appointment that is filed or lodged with the court in accordance with
paragraph 18 or 29 of Schedule B1 to the Insolvency Act 1986,

(b) that a period of 28 days has elapsed since that notice was given,

(c) that there is no outstanding application to the court for a housing
45administration order in relation to the registered provider, and

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(d) that the making of an application for a housing administration order in
relation to the registered provider has not resulted in the making of a
housing administration order which is in force or is still to come into
force.

(5) 5The Regulator of Social Housing must give the Secretary of State a copy of any
notice given under subsection (4)(a) (and a copy of the accompanying
documents).

(6) Paragraph 44 of Schedule B1 to the Insolvency Act 1986 (interim moratorium)
does not prevent, or require the permission of the court for, the making of an
10application for a housing administration order at any time before the
appointment takes effect.

102 Enforcement of security

(1) This section applies in relation to a private registered provider that is—

(a) a company,

(b) 15a registered society within the meaning of the Co-operative and
Community Benefit Societies Act 2014, or

(c) a charitable incorporated organisation within the meaning of Part 11 of
the Charities Act 2011

(2) A person may not take any step to enforce a security over property of the
20registered provider unless—

(a) notice of the intention to do so as been given to the Regulator of Social
Housing, and

(b) a period of at least 28 days has elapsed since the notice was given.

(3) In the case of a company which is a foreign company, the reference to the
25property of the company is to its property in the United Kingdom.

(4) The Regulator of Social Housing must give the Secretary of State a copy of any
notice given under subsection (2)(a).

Financial support for registered providers in housing administration

103 Grants and loans where housing administration order is made

(1) 30If a housing administration order has been made in relation to a registered
provider, the Secretary of State may make grants or loans to the registered
provider of such amounts as appear to the Secretary of State appropriate for
achieving the objective of the housing administration.

(2) A grant under this section may be made on any terms and conditions the
35Secretary of State considers appropriate (including provision for repayment,
with or without interest).

104 Indemnities where housing administration order is made

(1) If a housing administration order has been made in relation to a registered
provider, the Secretary of State may agree to indemnify persons in respect of
40one or both of the following—

(a) liabilities incurred in connection with the carrying out of functions by
the housing administrator, and

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(b) loss or damage sustained in that connection.

(2) The agreement may be made in whatever manner, and on whatever terms, the
Secretary of State considers appropriate.

(3) As soon as practicable after agreeing to indemnify persons under this section,
5the Secretary of State must lay a statement of the agreement before Parliament.

(4) For repayment of sums paid by the Secretary of State in consequence of an
indemnity agreed to under this section, see section 105.

(5) The power of the Secretary of State to agree to indemnify persons—

(a) is confined to a power to agree to indemnify persons in respect of
10liabilities, loss and damage incurred or sustained by them as relevant
persons, but

(b) includes power to agree to indemnify persons (whether or not they are
identified or identifiable at the time of the agreement) who
subsequently become relevant persons.

(6) 15The following are relevant persons for the purposes of this section—

(a) the housing administrator,

(b) an employee of the housing administrator,

(c) a partner or employee of a firm of which the housing administrator is a
partner,

(d) 20a partner or employee of a firm of which the housing administrator is
an employee,

(e) a partner of a firm of which the housing administrator was an employee
or partner at a time when the order was in force,

(f) a body corporate which is the employer of the housing administrator,

(g) 25an officer, employee or member of such a body corporate, and

(h) a Scottish firm which is the employer of the housing administrator or of
which the housing administrator is a partner.

(7) For the purposes of subsection (6)

(a) references to the housing administrator are to be read, where two or
30more persons are appointed as the housing administrator, as references
to any one or more of them, and

(b) references to a firm of which a person was a partner or employee at a
particular time include a firm which holds itself out to be the successor
of a firm of which the person was a partner or employee at that time.

105 35Indemnities: repayment by registered provider etc

(1) This section applies where a sum is paid out by the Secretary of State in
consequence of an indemnity agreed to under section 104 in relation to the
housing administrator of a registered provider.

(2) The registered provider must pay the Secretary of State—

(a) 40such amounts in or towards the repayment to the Secretary of State of
that sum as the Secretary of State may direct, and

(b) interest on amounts outstanding under this subsection at such rates as
the Secretary of State may direct.

(3) The payments must be made by the registered provider at such times and in
45such manner as the Secretary of State may determine.

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(4) Subsection (2) does not apply in the case of a sum paid by the Secretary of State
for indemnifying a person in respect of a liability to the registered provider.

(5) The Secretary of State must lay before Parliament a statement, relating to the
sum paid out in consequence of the indemnity—

(a) 5as soon as practicable after the end of the financial year in which the
sum is paid out, and

(b) if subsection (2) applies to the sum, as soon as practicable after the end
of each subsequent financial year in relation to which the repayment
condition has not been met.

(6) 10The repayment condition is met in relation to a financial year if—

(a) the whole of the sum has been repaid to the Secretary of State before the
beginning of the year, and

(b) the registered provider was not at any time during the year liable to pay
interest on amounts that became due in respect of the sum.

106 15Guarantees where housing administration order is made

(1) If a housing administration order has been made in relation to a registered
provider the Secretary of State may guarantee—

(a) the repayment of any sum borrowed by the registered provider while
that order is in force,

(b) 20the payment of interest on any sum borrowed by the registered
provider while that order is in force, and

(c) the discharge of any other financial obligation of the registered
provider in connection with the borrowing of any sum while that order
is in force.

(2) 25The Secretary of State may give the guarantees in whatever manner, and on
whatever terms, the Secretary of State considers appropriate.

(3) As soon as practicable after giving a guarantee under this section, the Secretary
of State must lay a statement of the guarantee before Parliament.

(4) For repayment of sums paid by the Secretary of State under a guarantee given
30under this section, see section 107.

107 Guarantees: repayment by registered provider etc

(1) This section applies where a sum is paid out by the Secretary of State under a
guarantee given by the Secretary of State under section 106 in relation to a
registered provider.

(2) 35The registered provider must pay the Secretary of State—

(a) such amounts in or towards the repayment to the Secretary of State of
that sum as the Secretary of State may direct, and

(b) interest on amounts outstanding under this subsection at such rates as
the Secretary of State may direct.

(3) 40The payments must be made by the registered provider at such times, and in
such manner, as the Secretary of State may from time to time direct.

(4) The Secretary of State must lay before Parliament a statement, relating to the
sum paid out under the guarantee—