Deregulation of the sector
Our summer edition was devoted to the Housing and Planning Act 2016. Several articles heralded new provisions which, when implemented, would reduce regulation for the affordable housing sector.
The HCA has now confirmed that the "deregulatory" provisions of the Act will come into force on 6 April 2017. Here is a reminder of the changes that will take place:
Removal of the disposals consent regime – Before disposing of its social housing dwellings, an RP will no longer need to get consent from the Regulator under section 172 of Housing and Regeneration Act 2008 and section 133 of Housing Act 1988. Whilst much has been made of the new freedom to dispose, boards will be aware of the need to maintain proper decision-making processes and correct valuations. Charitable RPs will also continue to be bound by charity law and for registered charities this includes the more cumbersome disposals regime in the Charities Act 2011 and the Charity Commission's requirements.
Removal of the constitutional consents regime – HCA consent will not be required for changes to articles of association or rules. This will range from simple administrative changes to the rule changes required to become a subsidiary, conversion of a company into a registered society or from a registered society into a company, transfers of engagement by an RP (whether to another RP or to a non RP) and amalgamations of registered societies.
Introduction of a notifications regime – Whilst the statutory consents regimes for both disposals and constitutional changes will have been abolished, there will be a system of notification to the HCA for disposals and various constitutional changes. Final guidance has not yet been published.
RIP Disposal Proceeds Funds – Disposal Proceeds Funds (DPFs) are being abolished, which means that the use of proceeds from disposals from April onwards will be at the board's discretion. Money which is already in the DPF will, however, continue to be subject to current rules and restrictions through transitional provisions which are awaited.
Board member and manager appointments by the Regulator – The Regulator will be able to appoint a manager in narrower circumstances where an RP has mismanaged social housing. The change is to recognise that "mismanagement" for these purposes is restricted to management in breach of any legal requirements.
Registration decisions – A simplified registration process for "restructured bodies" will be introduced for bodies resulting from restructures such as amalgamations or conversions from a company to a registered society or vice versa. Transfers of engagements between RPs will not require any such new registration.
Local authority controls in or over RP constitutions – In addition to the above, we anticipate that the regulations bringing into force section 93 of the Act will be published early this year. These will reduce or remove local authority voting rights at general meetings and/or appointments to the board. They are also likely to cover contractual provisions that have a similar effect such as covenants not to amend rules without the consent of the local authority. These provisions may or may not come into effect at the same time as the other deregulation provisions.