Clause 219 - Representations

615.     This clause makes arrangements for providers issued with a warning to make representations to the regulator about its proposed action. The warning issued under clause 218 must provide for a minimum period for the provider to make representations to the regulator.

616.     Subsection (2) specifies that the minimum period must be at least 28 days beginning with the date on which the registered provider receives the pre-compensation warning.

617.     The representations may pertain to any matter connected with the contents of the warning, but in particular with whether compensation should be awarded, and the likely amount of the compensation.

618.     Subsection (4) provides that at the end of the period for representations the regulation must consider any representations that have been made, and then decide whether to direct the registered provider to pay compensation.

Clause 220 - Enforcement

619.     This clause specifies how compensation notices will be enforced, and makes provisions for late payment or non-payment of compensation. Compensation is treated as a debt to the person or persons to whom it has been awarded.

620.     Subsection (2) gives the Treasury a power to make regulations permitting the regulator to charge interest on compensation that is not paid by the date specified in the compensation notice and to award additional compensation where the original compensation award is not paid by the specified deadline. Subsection (3) provides that in such cases, the additional sums are also treated as compensation.

621.     Subsection (4) provides for how interest rates may be set for interest charges on late payment of penalties as provided for in subsection (2).

Clause 221 - Appeal

622.     This clause gives a provider who has been served with a compensation notice the right to appeal to the High Court against the regulator's award of compensation, or the amount of compensation awarded, or both.

Management etc.

Clause 222 - Overview

623.     This clause describes the powers in this Chapter as being enforcement powers in relation to how providers manage their affairs or are constituted.

Clause 223 - Management tender

624.     Subsection (1) specifies that the regulator may use this power where it is satisfied that a registered provider has failed to meet standards set under either clause 173 or 174, or that its affairs in relation to social housing have been mismanaged, as defined in clause 238.

625.     If the regulator is satisfied that one of the conditions in subsection (1) is met, subsections (2) and (3) gives it the power to require the registered provider to tender out the management of its social housing, in whole or in part. The regulator will specify the process that the provider is to follow in putting the services out to tender and making an appointment as a result of that process.

626.     The extent of the services to be tendered out may be restricted either by reference to the type of services concerned, or in relation to a specific part or parts of the social housing stock owned by the registered provider.

627.     The regulator must specify certain matters if it exercises this power, as follows:

• the constitution of the panel which has the responsibility for selection, which must include the manner in which tenants' interests will be represented on that panel,

• provision for ensuring that the procurement process follows best practice, and

• the terms and conditions on which the manager is to be appointed, that will include the setting of the required standards, how those standards will be monitored and enforced, and resources.

Clause 224 - Section 223: Supplemental

628.     Subsection (1) requires that the regulator, before it requires a registered provider to undertake a tender of its management functions under clause 222(2), must give the registered provider a notice which:

• states the grounds on which it may decide to require the provider to tender out its management functions,

• formally warns the provider that it is considering using this power, and

• explains the effect of this section.

629.     Subsection (2) specifies that the provisions in clause 199 concerning a pre-enforcement notice apply to a notice under subsection (1) with any modifications that are necessary to make it effective for this power.

630.     The notice served under clause 224(1) must be copied to the HCA, and to any other person that the regulator thinks appropriate. In determining who the regulator thinks is appropriate for this purpose, it must have regard to any person who has provided information that has directly or indirectly led the regulator to satisfying itself that the use of this power is warranted.

631.     The notice served under clause 224(1) must advise the registered provider on whom it is served about the provisions for the provider to make voluntary undertakings to the regulator under clause 121, and the extent to which it would accept an undertaking instead of using this power.

632.     Subsection (5) allows the regulator to use this enforcement power in conjunction with some of the other enforcement powers that it has under Chapter 7.

633.     Subsection (6) provides that in deciding whether to require a management tender, the regulator must have regard to the views of the relevant tenants, the registered provider, the HCA and, if appropriate, any relevant local housing authority.

634.     A registered provider served with a notice by the regulator under this clause has a right of appeal to the High Court.

Clause 225 - Management transfer

635.     The powers set out in these clauses are exercisable following an inquiry as provided for under clause 184, or an audit under clause 186.

636.     Subsection (2) provides that the regulator may require a registered provider to transfer the management of some or all of its management functions to another specified person.

637.     The regulator may use this power where it is satisfied that one of the conditions specified in subsection (1) is met, which are that-

• a registered provider has failed to meet the requirements of a standard set by the regulator under clause 173 or 174,

• the affairs of the registered provider have been mismanaged, in respect of social housing,

• some or all of a registered provider's management of its social housing is likely to be improved by the transfer of those management functions.

638.     Subsections (3) to (5) set out the nature of the requirement that will be specified by the regulator.

639.     Subsection (3) provides that the regulator may determine the scope of the requirement to transfer management.

640.     Subsection (4) provides that the requirement will specify the terms and conditions of the appointment, including the remuneration of the person to whom the management is to be transferred, and that these will be determined in accordance with the scope of the management functions to be transferred.

641.     Subsection (5) gives the person to whom the management functions are to be transferred the powers necessary to carry out the activities specified in the requirement. The powers may be specified by the regulator in the requirement. In addition the person to whom management is transferred by the requirement will have any other powers in relation to the registered provider's business that are necessary to give effect to the requirement.

Clause 226 - Section 225: supplemental

642.     This clause specifies the process by which the power in clause 225 is exercised. Following a statutory inquiry, and having decided that it should direct the transfer of management, subsection (1) requires the regulator to serve the registered provider with a notice specifying-

• which of the grounds set out in clause 225(1) applies,

• that it is considering directing the transfer of the registered provider's management functions as a consequence, and

• setting out the effects of this clause.

643.     Subsection (2) specifies that the provisions in clause 199 concerning a pre-enforcement notice apply to a notice under subsection (1)with any necessary modifications to make it effective for this power.

644.     The regulator must send a copy of that notice to the HCA and to any other person that it thinks appropriate, with particular consideration to any person who has been involved in identifying to the regulator the matters that form the basis for the regulator's use of this power.

645.     The notice must draw to the registered provider's attention the provisions of clause 121 which provide for a registered provider to make a voluntary undertaking to the regulator at any time on any matter, and the notice must also indicate the extent to which the provision of a voluntary undertaking under that provision would be accepted instead of, or in mitigation of, the direction to transfer management which the regulator is considering.

646.     The notice may be combined with notices about the use of other enforcement powers available under Chapter 7.

647.     Subsection (6) gives the registered provider subject to a requirement under clause 225 subsection 2 the right of appeal to the High Court.

Clause 227 - Appointment of manager

648.     These sections give the regulator the power either to appoint a manager of the registered provider or to require the registered provider to appoint a manager as set out in subsection (2).

649.     The regulator may do this if it is satisfied that a registered provider has failed to meet a standard set out in either clause 173 or 174, or that its affairs have been mismanaged in relation to social housing.

650.     Subsections (3) to (5) set out the nature of the requirement or the appointment that will be specified by the regulator.

651.     Subsection (3) provides that the regulator may determine the scope of the appointment of a manager of the requirement to appoint a manager.

652.     Subsection (4) provides that the appointment of a manager, or the requirement to appoint a manager, will specify the terms and conditions of appointment, including the remuneration of the manager, and that these will be determined in accordance with the scope of the appointment of the manager, or the requirement to appoint a manager under subsection (3).

653.     Subsection (5) gives the appointed manager the powers necessary to carry out the activities specified in the requirement or the appointment. The powers may be specified by the regulator in the requirement of the appointment. In addition, the appointed manager will have any other powers in relation to the registered provider's business that are necessary to give effect to the requirement of the terms of the manager's appointment.

Clause 228 - Section 227 supplemental

654.     Before it makes a requirement under subsection (2) of clause 228 the regulator must serve a notice on the registered provider specifying which of the grounds listed in subsection (1) of that clause apply, warning that it is considering the use of the power set out in this clause, and explaining the provisions of this clause.

655.     Subsection (2) specifies that the provisions in clause 199 concerning a pre-enforcement notice apply to a notice under subsection (1) with any necessary modifications to make it effective for this power.

656.     Subsection (3) provides that the regulator must send a copy of that notice to the HCA and to any other person that it thinks appropriate, with particular consideration to any person who has been involved in identifying to the regulator the matters that form the basis for the regulator's use of this power.

657.     Subsection (4) provides that the notice must draw to the registered provider's attention the provisions of clause 121 which provide for a registered provider to make a voluntary undertaking to the regulator at any time on any matter, and the notice must also indicate the extent to which the provision of a voluntary undertaking under that provision would be accepted instead of, or in mitigation of, the appointment of a manager or the direction to appoint a manager which the regulator is considering.

658.     Subsection (5) provides that the notice may be combined with notices about the use of other enforcement powers available under Chapter 7.

659.     Subsection (6) gives the regulator the power to require the appointed manager to report to it in relation to matters specified in the manager's appointment.

660.     Subsection (7) gives the registered provider the right of appeal to the High Court.

661.     Clauses 229 and 230 replace paragraph 27 and 29 of Schedule 1 to the 1996 Act.

Clause 229 - Transfer of land

662.     This clause applies to non-profit registered providers only.

663.     Subsection (1) sets out the cases where this clause applies. These cases are:

• the provider has failed to meet a standard under clauses 173 or 174,

• there has been mismanagement of a provider's affairs in relation to social housing,

• transfer of the land of a provider would be likely to improve the management of that land.

664.     Subsection (2) gives the regulator power to require that the registered provider should transfer its land either to the regulator or to another specified registered provider.

665.     Subsection (3) specifies that this power may not be used in respect of a registered charity.

666.     Subsection (4) provides that this power may be used in respect of a charity that is not registered with the Charity Commission, but that the charity's land may only be transferred to another charity whose objects the regulator thinks are similar to those of the transferring charity.

Clause 230 - Section 229: supplemental

667.     Subsection (1) provides that a transfer under clause 229 shall be on terms specified in or determined in accordance with the regulator's formal requirement.

668.     Subsection (2) specifies that the price attached to the transfer shall be at least the amount certified by the district valuer as the amount that the property to be transferred would fetch if sold by a willing seller to another non-profit registered provider.

669.     Subsection (3) provides that the terms of the transfer will include provision for the payment of debts or liabilities in respect of the land to be transferred, whether or not they are secured by a charge on the land.

670.     Subsection (4) requires that the Secretary of State must consent to a requirement for a transfer of land under clause 229, both in respect of the transfer itself, and the terms of that transfer.

Clause 231     Removal of officers

671.     This clause replicates the effect of paragraphs 4 and 5 of Schedule 1 to the 1996 Act.

672.     The clause gives the regulator the power to remove officers from the governing bodies of registered providers that have been designated as non-profit providers by the regulator.

673.     Subsection (2) defines an officer for each of the constitutional forms of a non-profit provider, which are a registered charity, an industrial and provident society or a registered company.

674.     Subsections (3) to (9) specify the seven cases under which the regulator may remove an officer, which are:

• where the officer has been adjudged to be bankrupt,

• where the officer has made an arrangement with creditors,

• where the officer has been subject to a disqualification order or a disqualification undertaking under the Company Directors Disqualification Act 1986 (or the equivalent statutory provision for Northern Ireland),

• where the officer has been subject to an order under section 429(2) of the Insolvency Act 1986 (which occurs where a person fails to make a payment under a county court administration order under the County Courts Act 1984),

• where the officer is disqualified under section 72 of the Charities Act 1993 from being a charity trustee (whether this is in relation to their position as an officer of a registered provider that is a charity or as officer of a different charity),

• where the officer is incapable of acting by reason of mental disorder,

• where the officer is impeding the proper management of the registered provider by reason of absence or failure to act.

Clause 232 - Section 231: supplemental

675.     This clause sets out the procedure that the regulator must follow when using the power in clause 231.

676.     Subsection (1) requires the regulator to take all reasonable steps to give at least 14 days' notice both to the officer to be removed, and the registered provider of which he or she is an officer.

677.     Subsection (2) gives the officer whom the regulator wishes to remove a right of appeal to the High Court.

678.     Subsection (3) applies only in respect of officers of a registered charity. This specifies that the regulator may only serve an order to remove an officer of a registered charity if at least one of the conditions listed in this subsection apply. Those conditions are:

• that the charity has received financial assistance under section 24 of the Local Government Act 1988 (which relates to assistance for privately let housing accommodation), or

• that the charity has received a transfer of property on a qualifying disposal under section 135 of the Leasehold Reform, Housing and Urban Development Act 1993 (disposals of housing by local authorities), or

• that the charity has received a grant or loan under one of the listed provisions (all of which relate to financial assistance in relation to social housing).

679.     The effect of this subsection is that officers of a registered charity can only be removed by the regulator if that registered charity has received either homes or financial assistance that is relevant to the functions of the regulator.

Clause 233 - Appointment of new officers

680.     This clause replicates the effect of paragraphs 6, 7 and 8 of Schedule 1 to the 1996 Act.

681.     This clause gives the regulator the power to appoint a person as an officer of a non-profit registered provider. The regulator does this by order.

682.     Subsection (1) specifies that the regulator may do this where:

• it is to replace an officer removed under clause 231,

• the registered provider has no officers on its governing body, or

• the regulator thinks that the additional officer is necessary for the proper management of the registered provider's affairs.

683.     Subsection (2) specifies that "officer" for this clause has the same meaning as in clause 231.

684.     Subsection (3) says that the regulator's power in subsection (1) overrides any restrictions in the registered provider's constitution on the eligibility requirements for officers, or the number of officers that the registered provider may have.

685.     Subsection (4) requires that an order made by the regulator under subsection (1) must specify the period for which, and the terms on which, the person is appointed as an officer. It also provides that the regulator may renew the appointment when the period specified in the order under subsection (1) expires, and that the new officer appointed by the regulator may resign or retire as allowed in the registered provider's constitution.

686.     Subsection (5) provides that an officer appointed by the regulator under subsection (1) has the same standing, in terms of rights, powers and responsibilities, as if he or she had been appointed as an officer under the constitution of the provider.

687.     Subsection (6) provides that the regulator may only make an appointment in relation to a registered charity if one of the conditions in clause 232(3) is fulfilled (which are the conditions that the registered charity has received either homes or financial assistance that are relevant to the functions of the regulator under the specified statutory provisions), and the regulator has consulted the Charity Commission before making the order under subsection (1).

Chapter 8 - General

Interpretation

Clause 234 - Officer

688.     This clause defines "officer" in relation to registered providers.

Clause 235 - Subsidiary and associate

689.     This clause defines the terms "subsidiary" and "associate" for the purposes of this Part.

Clause 236 - Family

690.     This clause clarifies when a person is considered to be a member of the family of another person, for the purposes of this Part.

Clause 237 - Disposal

691.     This clause defines what is a disposal of a property for the purposes of this Part.

692.     Subsection (2) makes it clear that granting an option to require a disposal at some point in the future will be treated as making a disposal.

Clause 238 - General

693.     This clause defines a number of terms, either directly or by reference to other Acts.

Clause 239 - Index of defined terms: Part 2

694.     This clause sets out a table listing expressions defined within this Part.

Miscellaneous

Clause 240 - Consequential amendments

695.     This clause states that in secondary legislation made before the commencement of this Part a reference to 'registered social landlords' will be treated as including a reference to 'registered providers of social housing'.

Clause 241 - Transitional

696.     This clause ensures that registered social landlords currently regulated by the Housing Corporation are to be entered on the register as non-profit registered providers.

PART 3 - OTHER PROVISIONS

Chapter 1 - Sustainability certificates

General

697.     This Chapter provides for the introduction of mandatory sustainability rating for new homes in England and Wales. This will be information in the form of either a certificate showing the results of assessment against sustainability standards, or a statement that there is no certificate because no assessment has been made. Sustainability standards already exist in the Code for Sustainable Homes ("the Code"). Since April 2007, the Code has operated on a voluntary basis in England only. The purpose of sustainability standards is to improve the sustainability of new homes during both the construction and the lifetime of the home.

698.     The Chapter includes provision for extension of the provisions to conversions of existing buildings and to non-residential properties, although there are no present proposals to use those powers.

699.     The Chapter applies to England and Wales. Any power to make delegated legislation under the Chapter is to be exercised by the appropriate national authority: the Secretary of State in relation to England, and the Welsh Ministers in relation to Wales.