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Clause 157 - Assistance by regulator

442.     This clause replaces the provisions of section 49 of the 1996 Act.

443.     Subsection (1) gives the regulator the power to give financial or other assistance to a registered provider for the purpose of maintaining its position while the regulator develops proposals under clause 151.

444.     Subsection (2) gives the regulator the power to give financial or other assistance either to a registered provider or to a manager appointed under clause 154 to assist or facilitate the implementation of proposals agreed in accordance with clause 151.

445.     Subsection (3) specifies that such assistance under subsections (1) and (2) may include the regulator lending staff or arranging the payment of a manager's remuneration and expenses.

446.     Subsection (4) specifies a list of things that the regulator may do by way of giving assistance that require the consent of the Secretary of State. Those things are:

  • making grants,

  • making loans,

  • indemnifying a manager,

  • making payments in connection with secured loans, and

  • guaranteeing payments in connection with secured loans.

Clause 158 - Applications to court

447.     This clause replaces the provisions of section 50 of the 1996 Act.

448.     Subsection (1) gives the registered provider the right to apply to the High Court where it thinks that an action taken by a manager appointed under clause 154 is not in accordance with agreed proposals.

449.     Subsection (2) gives a similar right to a creditor of a registered provider.

450.     Subsection (3) provides that where an application is made to the High Court under subsection (1) or (2), the High Court can:

  • confirm, annul, or modify an act of the manager

  • give the manager directions,

  • make any other order.

451.     Subsection (4) gives a person who is bound by proposals as defined in clause 148 the right to apply to the High Court if that person thinks that another person bound by the same provisions in clause 153 has breached the requirements of that clause.

452.     Subsection (5) provides that where an application is made to the High Court under subsection (4), the High Court can:

  • confirm the action, modify the action or annul it,

  • grant relief by way of injunction, damages or otherwise.

Restructuring and dissolution

Clauses 159 to 165

453.     These clauses re-enact the powers of the Housing Corporation in paragraphs 12 to 14 of Schedule 1 to the 1996 Act as powers of the regulator. These powers relate to the restructuring and dissolution of non-profit registered providers of social housing.

Clause 159 - Company: arrangements and reconstructions

454.     Subsection (1) specifies that the effect of this clause is restricted to non-profit registered providers that are registered companies.

455.     The effect of subsections (2) to (4) is to render the arrangements under various statutory provisions ineffective without the consent of the regulator.

456.     The arrangements in this clause for which the regulator's consent is required are:

  • voluntary arrangements made by the directors of a company with its creditors under Part 1 of the Insolvency Act 1986. (This re-enacts section 13(5) of Schedule 1 to the 1996 Act).

  • an agreement or compromise with creditors that has been sanctioned by a court order in accordance with section 899 of the Companies Act 2006 (this replaces paragraph 13(2) of Schedule 1 to the 1996 Act which relates to the such arrangements made under section 425 of the Companies Act 1985). Subsection (3)(b) also requires that a copy of the consent should be delivered to the registrar of companies before the court order is effective.

  • an agreement under section 900 of the Companies Act 2006 where the application to the court for an order sanctioning an agreement under section 899 Companies Act 2006 is in respect of an agreement to reconstruct a company or amalgamate two or more companies and it provides for the transfer of the whole or part of the undertaking or property of one or more of the companies involved in the scheme (this replaces the first sentence of paragraph 13(3) of Schedule 1 to the 1996 Act which related to the arrangements made under section 427 of the Companies Act 1985).

457.     Subsection (5) provides that a court order for the arrangements in subsection (4), and which section 900(6) of the Companies Act 2006 requires to be sent to the registrar of companies, must also be accompanied by a copy of the regulator's consent (this replaces the second sentence of paragraph 13(3) of Schedule 1 to the 1996 Act which related to the such arrangements made under section 427 of the Companies Act 1985).

Clause 160 - Company: conversion into industrial and provident society

458.     Subsection (1) specifies that the effect of this clause is restricted to non-profit registered providers that are registered companies.

459.     Subsection (2) specifies that where there is a resolution to convert a company into an industrial and provident society under section 53 of the Industrial and Provident Societies Act 1965, the registrar of companies may only register that resolution if the regulator has consented in writing to the resolution and a copy of that consent accompanies the resolution sent to the registrar of companies. This re-enacts paragraph 13(4) of Schedule 1 to the 1996 Act.

460.     Subsection (3) requires that where an industrial and provident society is created by such a resolution, the regulator must register the body created and designate it as a non-profit organisation on the register.

461.     Subsection (4) further provides that the effects of subsection (3) will be immediate for the purposes of the regulator's functions and powers, pending the completion of the registration process by the regulator. This re-enacts paragraph 13(8) of Schedule 1 to the 1996 Act.

Clause 161 - Company: winding up

462.     Subsection (1) specifies that the effect of this clause is restricted to non-profit registered providers that are companies.

463.     Subsection (2) provides that the regulator must first consent in writing before a special resolution for the voluntary winding up of a company under the Insolvency Act 1986 is effective. This replaces paragraph 13(6)(a) of Schedule 1 to the 1996 Act.

464.     Subsection (3) provides that the requirement to send a copy of the special resolution to the registrar of companies under section 30 of the Companies Act 2006 is satisfied only if a copy of the regulator's consent accompanies the special resolution. Failure to comply with section 30 of the Companies Act 2006 is an offence. Subsection (3) replaces paragraph 13(6)(b) of Schedule 1 to the 1996 Act which referred to the earlier equivalent provision in section 380 of the Companies Act 1985.

Clause 162 - Industrial and provident society: restructuring

465.     Subsection (1) specifies that the effect of this clause is restricted to non-profit registered providers that are industrial and provident societies.

466.     Subsections (2) and (3) re-enact paragraph 12(2) of Schedule 1 to the 1996 Act.

467.     Subsection (2) provides that the Financial Services Authority, which is the registrar for industrial and provident societies, may register resolutions passed by an industrial provident society for the purposes of the restructuring provisions identified in subsection (3), only if the regulator has consented in writing to the resolution, and a copy of that consent accompanies the resolution sent to the Financial Services Authority.

468.     Subsection (3) identifies the restructuring provisions for industrial and provident societies for the purposes of this clause as the following sections of the Industrial and Provident Societies Act 1965:

  • section 50 which is for the amalgamation of two or more societies,

  • section 51 which is for the transfer of engagements from one society to another,

  • section 52 which is for the conversion into, amalgamation with or transfer of engagements to, a company by an industrial and provident society.

469.     Subsection (4) re-enacts paragraph 12(3) of Schedule 1 to the 1996 Act. It provides that where a resolution is registered by the Financial Services Authority, any body that is created by the resolution, or to which there is a transfer of engagements as a result of the resolution, will be:

  • registered by the regulator as a registered provider, and be designated as a non-profit provider in accordance with clause 115, and that

  • for the purposes of the regulator's functions and powers, pending the completion of the registration process by the regulator of the new body, the new body will be treated as if it were registered already as a non-profit organisation.

Clause 163 - Industrial and provident society: winding up

470.     Subsection (1) specifies that the effect of this clause is restricted to non-profit registered providers that are industrial and provident societies.

471.     Subsections (2) and (3) re-enact paragraph 12(4) of Schedule 1 to the 1996 Act.

472.     Subsection (2) provides that the regulator must first consent before a resolution for the voluntary winding up of a society under the Insolvency Act 1986 is effective.

473.     Subsection (3) refers to the requirement to send a copy of a winding up resolution to the Financial Services Authority under section 30 of the Companies Act 2006. It specifies that this requirement is only satisfied if the resolution is accompanied by a copy of the regulator's consent. This requirement of the Companies Act 2006 is applied to industrial and provident societies by section 55 of the Industrial and Provident Societies Act 1965, and section 84(3) of the Insolvency Act 1986. Failure to comply with section 30 of the Companies Act 2006 is an offence.

Clause 164 - Industrial and provident society: dissolution

474.     This clause re-enacts the provisions in paragraph 12(5) of Part II of Schedule 1 to the 1996 Act.

475.     Subsection (1) specifies that the effect of this clause is restricted to non-profit registered providers that are both industrial and provident societies and are to be dissolved by an instrument of dissolution as defined in section 58 of the Industrial and Provident Societies Act 1965.

476.     Subsection (2) provides that the instrument of dissolution may only be registered by the Financial Services Authority under section 58(5) of the Industrial and Provident Societies Act 1965 or be advertised by the authority as it is required to do under section 58(6) of the same Act if the regulator has first consented in writing to the dissolution and a copy of the consent has accompanied the instrument of dissolution sent to the Financial Services Authority.

Clause 165 - Winding up petition by the regulator

477.     This clause re-enacts the provisions in paragraph 14 of Schedule 1 to the 1996 Act.

478.     Subsection (1) specifies that the effect of this clause is restricted to non-profit registered providers that are either registered companies, or industrial and provident societies.

479.     Subsection (2) provides that the regulator may present a petition for the registered provider to be wound up under the Insolvency Act 1986 on one of the grounds specified in subsections (3) to (5) which are that:

  • the registered provider is not carrying out the objects specified in its constitution, or

  • the registered provider is unable to pay its debts as that inability is defined in section 123 of the Insolvency Act 1986, or

  • the regulator has directed the registered provider to transfer its land to another person under the power conferred on it by clause 252.

480.     Clauses 166 to 168 re-enact the powers of the Housing Corporation in paragraph 15 of Schedule 1 to the 1996 Act as powers of the regulator. These powers relate to the transfer of assets on dissolution of non-profit registered providers of social housing.

Clause 166 - Transfer of property

481.     Subsection (1) specifies that the provisions of this clause apply where a non- profit registered provider-

  • that is an industrial and provident society is dissolved in accordance with sections 55(a) or 55(b) of the Industrial and Provident Societies Act 1965, or

  • that is a registered company wound up under the Insolvency Act 1986.

482.     Subsection (2) provides that in either of the two cases in subsection (1), any surplus property remaining after the registered provider's liabilities have been satisfied will either be transferred to the regulator, or, if the regulator directs, to another registered provider that it specifies.

483.     Subsection (3) provides that that if the registered provider that has been dissolved or wound up under subsection (1) must sell any of its lands in order to satisfy its liabilities, the regulator may discharge those liabilities instead so as to ensure that the land that would otherwise have to be sold is instead transferred as provided for in subsection (2).

484.     Subsection (4) provides that if the registered provider dissolved or wound up under subsection (1) is a charity, the registered provider that the regulator may specify as the recipient of surplus assets after its liabilities have been satisfied must also be a charity whose objects the regulator is satisfied are similar to those of the charity being dissolved or wound up.

485.     Subsection (5) specifies that the provisions of this clause override any provisions in the following legislation:

  • Industrial and Provident Societies Act 1965,

  • Insolvency Act 1986,

  • Companies Act 2006.

486.     It also specifies that the clause overrides any provisions in the constitution of the registered provider that is being dissolved or wound up.

Clause 167 - Section 166: supplemental

487.     Subsection (1) specifies that this clause applies to property transferred to the regulator in accordance with clause 166(2)(a).

488.     Subsection (2) specifies that the regulator may only dispose of property transferred to it under clause 166(2)(a) to another registered provider.

489.     Subsection (3) applies if the registered provider dissolved or wound up under clause 166(1) is a charity. It specifies that any property transferred to the regulator under clause 166(2)(a) from a charity may only be disposed of to a registered provider that is both a charity and has objects that are similar to those of the charity from which the property was transferred to the regulator.

490.     Subsection (4) provides that if the property transferred to the regulator from the charity wound up or dissolved under clause 166(1) is subject to a mortgage or charge, the regulator may either dispose of that land subject to that mortgage or charge, or subject to a new mortgage or charge in favour of the regulator.

Clause 168 - Extension of clauses 166 and 167

491.     This clause reserves a power for the Secretary of State to provide, through regulations, for the application of clauses 166 and 167 in respect of registered providers that are charities, but are not registered companies, either in specified circumstances and with specified modifications.

Chapter 5 - Disposal of property

Introductory

Clause 169 - Overview

492.     This clause provides an overview of the Chapter.

Clause 170 - Power to dispose

493.     This clause states that a registered provider may dispose of land, subject to the following provisions of this Chapter, including those which require the regulator's consent for certain disposals.

494.     This clause replaces section 8 of the 1996 Act which gives RSLs power to dispose of land subject to section 9 of that Act. Note that the reference in section 8(2) of the 1996 Act to section 39 of the Settled Land Act 1925 is replaced by clause 186.

Regulator's consent

Clause 171 - Requirement of consent

495.     Subsection (1) states that any disposal of land by a non-profit registered provider requires the regulator's consent unless it falls within an exception.

496.     This re-enacts section 9(1) of the 1996 Act.

497.     Subsection (2) states that any disposal of social housing by a profit-making registered provider requires the regulator's consent unless it falls within an exception. It only applies to social housing, rather than any land, because profit-making registered companies may be involved in other activities which are not social housing and which are not therefore within the scope of regulation.

498.     Subsection (3) provides that disposal consent may not be given to a non-profit registered provider if the regulator believes that consent is being sought to enable disposal of assets to its members.

Clause 172 - Exceptions

499.     This clause lists exceptions to the requirement for consent in clause 171.

500.     Subsection (2) states that consent is not required for disposal by way of:

    (a)     an assured tenancy,

    (b)     an assured agricultural occupancy,

    (c)     an agreement that would be an assured tenancy of an assured agricultural occupancy but for any of paragraphs 4 to 8, paragraphs 12(1)(h) and 12ZA to 12B of Schedule 1 to the Housing Act 1988 (exclusions),

    (d)     a secure tenancy, or

    (e)     an arrangement that would be a secure tenancy but for any of paragraphs 2 to 12 of Schedule 1 to the Housing Act 1985 (exclusions).

501.     This makes clear that consent is not required for residential tenancies. It replaces section 10(1) of the 1996 Act.

502.     Subsection (3) states that consent is not required for a disposal to which section 81 or 133 of the Housing Act 1988 applies (disposals requiring consent of Secretary of State). This replaces section 10(2) of the 1996 Act.

503.     Subsection (4) states that consent is not required for a disposal under Part V of the Housing Act 1985 (right to buy).

504.     Subsection (5) states that consent is not required for a disposal in pursuance of a tenant's right to acquire under section 16 of the 1996 Act, or clause 178.

505.     Subsections (4) and (5) together replace section 10(3) of the 1996 Act.

Clause 173 - Procedure

506.     This clause sets out the procedure for the regulator giving consent to disposals.

507.     Subsection (1) states that consent may be either general or specific. Together with subsection (4) (which states that consent may be conditional), this replaces section 9(2) of the 1996 Act. This allows the regulator to give consent either for a broad class of disposals, or for individual properties, or properties belonging to an individual landlord.

508.     Subsection (2) states that consent may be retrospective.

509.     Subsection (3) states that consent may be expressed by reference to a policy for disposal submitted by a registered provider.

510.     Subsection (5) requires the regulator, before giving a consent, to consult:

a)     the HCA,

b)     one or more bodies appearing to it to represent the interests of registered providers, and

c)     one or more bodies appearing to it to represent the interests of tenants.

511.     Subsection (6) states that subsection (5) does not apply to specific consent relating only to one or more particular registered providers or properties. The regulator would therefore have to consult the bodies listed before giving a general consent which covered a wide range of properties, or properties owned by a large number of bodies, but not when giving a specific consent.

Clause 174 - Disposal without consent

512.     This clause states that a disposal by a registered provider is void if it required the regulator's consent and that consent had not been given. There are two exceptions. The first exception is when the disposal is of land other than a dwelling by a non-profit registered provider. This replicates section 9(5) of the 1996 Act. The second exception is when the disposal is by a non-profit registered provider of a single dwelling, and the provider reasonably believes at the time of the disposal that the buyer intends to use the property as their principal residence. This replaces the provision in section 9(4) of the 1996 Act and aims to protect individual purchasers if they unwittingly purchased a home from a registered provider who did not have consent to dispose of the property.

Proceeds

Clause 175 - Separate accounting

513.     This clause provides for certain disposal proceeds to be paid into a separate "disposal proceeds fund". It sets out which proceeds are "net disposal proceeds" and gives the regulator power to determine net proceeds of sale and the method of constituting the fund and showing it in the accounts.

Clause 176 - Use of proceeds

514.     This clause replicates section 25 of the 1996 Act. It enables the regulator to specify the purposes to which funds in the disposal proceeds fund may be applied, and ensures that proceeds from sales under right to acquire and other disposals programmes are reinvested in new social housing.

Tenants' rights and duties

Clause 177 - Application of Housing Act 1996

515.     This clause provides that sections 11 to 15 of the 1996 Act apply in relation to disposals by registered providers with the modifications set out in subsection (3).

Clause 178 - Right to Acquire

516.     This clause reproduces the effect of section 16(1) of the 1996 Act in relation land in England. It provides that an assured or secure tenant of a registered provider has the right to acquire if the provision of the dwelling was publicly funded and has remained in the social rented sector since that provision, and if the tenant satisfies certain qualifying conditions.

517.     These qualifying conditions are equivalent to those for Right to Buy and are defined with reference to the Right to Buy legislation - Part V of the Housing Act 1985. "Publicly funded" and "remained in the social rented sector" are defined at clause 179 and 180 respectively.

518.     Subsection (3)(b) refers to a person who provided the dwelling by means of grant by the Housing Corporation under section 27A of the 1996 Act. This replicates the effect of section 16A of the 1996 Act, which gives the right to acquire to tenants whose homes were provided under the Housing Corporations power to give grants to non-RSLs.

Clause 179 - Interpretation: "publicly funded"

519.     This clause defines when a dwelling is "publicly funded". This replaces section 16(2) of the 1996 Act, and refers to grants under sections 18 or 27A of the 1996 Act, to homes funded through the disposals proceeds fund, or acquired since 1st April 1997 by a registered provider from a public sector landlord. In addition it refers to dwellings provided in fulfilment of a condition imposed by HCA.

Clause 180 - Interpretation: "remained in the social rented sector"

520.     This clause defines when a dwelling has "remained in the social rented sector". This replaces sections 16(3) and 16A(4) of the 1996 Act. It provides that a dwelling has remained within the public sector if the freeholder has been, continuously, a registered provider, a registered social landlord or a public sector landlord and if each leaseholder was either a registered provider, a registered social landlord, public sector landlord or an individual holding otherwise than under a long tenancy. In addition, a dwelling provided under section 27A of the 1996 Act shall be treated as having remained in the social rented sector if it has been used exclusively for purposes permitted under the original grant or any other purposes agreed to by the Housing Corporation or the HCA.

Clause 181 - Interpretation: other expressions

521.     This clause provides a number of definitions in relation to this group of clauses.

Clause 182 - Right to acquire: supplemental

522.     This clause provides that section 17 of the 1996 Act applies in relation to a right to acquire under clause 178 with certain modifications. Section 17 of the 1996 Act gives the Secretary of State power, by order, to specify the amount or rate of discount given on the exercise of the right to acquire, and to designate rural areas in which the right to acquire does not arise. It also applies the provisions of Part V of the Housing Act 1985 (Right to Buy) in relation to the right to acquire, subject to any exceptions or modifications made by regulations by the Secretary of State.

Clause 183 - Right to acquire: consequential amendments

523.     This clause makes consequential amendments to sections 16, 16A, 20 and 21 of the 1996 Act, to restrict their application to properties in Wales.

 
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