(1)The [F1Corporation] may appoint a person (not a person who is, or at any time has been, a member of [F2staff of any of the Corporations]) to conduct an inquiry into the affairs of a registered housing association [F3and, if the appointed person considers it necessary for the purposes of the inquiry, he may also inquire into the business of any other body which, at a time which the appointed person considers material, is or was a subsidiary or associate of the association concerned].
(2)The appointed person may by notice in writing served on—
(a)the association concerned, or
(b)any person who is, or has been, an officer, agent or member of the association [F4or
(c)any person who is, or has been, an officer, agent or member of a subsidiary or associate of the association; or
(d)any other person whom the appointed person has reason to believe is or may be in possession of information of relevance to the inquiry],
require the association or person to produce to him such books, accounts and other documents relating to [F5the business of the association or any other such body as is referred to in subsection (1)] and to give him such other information so relating, as he considers necessary for the purposes of the inquiry.
(3)An association or other person who fails without reasonable excuse to comply with the requirements of a notice under subsection (2) commits a summary offence and is liable on conviction to a fine not exceeding level 5 on the standard scale.
[F6(3A)Where, by virtue of subsection (2), any books, accounts or other documents are produced to the appointed person, he may take copies of or make extracts from them.
(3B)The appointed person may, if he thinks fit during the course of the inquiry, make one or more interim reports to the Corporation on such matters as appear to him to be appropriate.]
(4)On completion of the inquiry the appointed person shall make a report to the Corporation on such matters and in such form as the Corporation may specify.
(5)In this section “agent” includes banker, solicitor and auditor; but nothing in this section requires the disclosure—
(a)by a solicitor, of a privileged communication made to him in his capacity as solicitor, or
(b)by a housing association’s banker, of information as to the affairs of any of their other customers.
[F7(6)In this section, in relation to a housing association, “subsidiary” means a company with respect to which one of the following conditions is fulfilled,—
(a)the association is a member of the company and controls the composition of the board of directors; or
(b)the association holds more than half in nominal value of the company’s equity share capital; or
(c)the company is a subsidiary, within the meaning of the Companies Act 1985 or the Friendly and Industrial and Provident Societies Act 1968, of another company which, by virtue of paragraph (a) or paragraph (b), is itself a subsidiary of the housing association;
and, in the case of a housing association which is a body of trustees, the reference in paragraph (a) or paragraph (b) to the association is a reference to the trustees acting as such and any reference in subsection (7) to the association shall be construed accordingly.
(7)For the purposes of subsection (6)(a), the composition of a company’s board of directors shall be deemed to be controlled by a housing association if, but only if, the association, by the exercise of some power exercisable by the association without the consent or concurrence of any other person, can appoint or remove the holders of all or a majority of the directorships.
(8)In this section, in relation to a housing association, “associate” means—
(a)any body of which the association is a subsidiary; and
(b)any other subsidiary of such a body,
and in this subsection “subsidiary” has the same meaning as in the Companies Act 1985 or the Friendly and Industrial and Provident Societies Act 1968 or, in the case of a body which is itself a housing association, has the meaning assigned by subsection (6).
(9)In relation to a company which is an industrial and provident society,—
(a)any reference in subsection (6)(a) or subsection (7) to the board of directors is a reference to the committee of management of the society; and
(b)the reference in subsection (7) to the holders of all or a majority of the directorships is a reference to all or a majority of the members of the committee or, if the housing association is itself a member of the committee, such number as together with the association would constitute a majority.]
Textual Amendments
F1Words substituted by Housing Act 1988 (c. 50, SIF 61), s. 59(2)(3)(4), Sch. 6 Pt. I para. 2
F2Words substituted by Housing Act 1988 (c. 50, SIF 61), s. 59(2)(3)(4), Sch. 6 Pt. I para. 19(1)
F3Words added by Housing Act 1988 (c. 50, SIF 61), s. 59(2)(3)(4), Sch. 6 Pt. I para. 19(1)
F4 “or” and s. 28(2)(c)(d) added by Housing Act 1988 (c. 50, SIF 61), s. 59(2)(3)(4), Sch. 6 Pt. I para. 19(2)
F5Words substituted by Housing Act 1988 (c. 50, SIF 61), s. 59(2)(3)(4), Sch. 6 Pt. I para. 19(2)
(1)For the purposes of an inquiry under section 28 [F8into the affairs of a registered housing association] the [F9Corporation] may require the accounts and balance sheet of the association concerned, or such of them as the Corporation may specify, to be audited by a qualified auditor appointed by the Corporation.
(2)A person is a qualified auditor for this purpose if he is under section 7(1) of the M1Friendly and Industrial and Provident Societies Act 1968 a qualified auditor for the purposes of that Act, or is under section 7(2) of that Act a qualified auditor in relation to the association concerned.
(3)On completion of the audit the appointed auditor shall make a report to the Corporation on such matters and in such form as the Corporation may specify.
(4)The expenses of the audit, including the remuneration of the auditor, shall be paid by the Corporation.
(5)An audit under this section is additional to, and does not affect, any audit made or to be made under any other enactment.
Textual Amendments
F8Words inserted by Housing Act 1988 (c. 50, SIF 61), s. 59(2)(3)(4), Sch. 6 Pt. I para. 20
F9Words substituted by Housing Act 1988 (c. 50, SIF 61), s. 59(2)(3)(4), Sch. 6 Pt. I para. 2
Marginal Citations
(1)Where the [F10Corporation] is satisfied, as the result of an inquiry under section 28 or an audit under section 29, that there has been misconduct or mismanagement in the affairs of a registered housing association, it may—
(a)by order remove any member of the committee of the association, or any officer, agent or employee of the association, who has been responsible for or privy to the misconduct or mismanagement or has by his conduct contributed to it or facilitated it;
(b)by order suspend such a person for up to six months, pending determination whether he should be removed;
(c)order any bank or other person who holds money or securities on behalf of the association not to part with the money or securities without the approval of the Corporation;
(d)by order restrict the transactions which may be entered into, or the nature or amount of the payments which may be made, in the administration of the association without the approval of the Corporation.
[F11(1A)If at any time the appointed person makes an interim report under section 28(3B) and, as a result of that interim report, the Corporation is satisfied that there has been misconduct or mismanagement as mentioned in subsection (1),—
(a)the Corporation may at that time exercise any of the powers conferred by paragraphs (b) to (d) of that subsection; and
(b)in relation to the exercise at that time of the power conferred by subsection (1)(b), the reference therein to a period of six months shall be construed as a reference to a period beginning at that time and ending six months after the date of the report under section 28(4).]
(2)Before making an order under subsection (1)(a) the Corporation shall give at least 14 days’ notice of its intention to do so—
(a)to the person it intends to remove, and
(b)to the association concerned.
(3)Notice under subsection (2) may be given by post, and if so given to the person whom the Corporation intends to remove may be addressed to his last known address in the United Kingdom.
(4)A person who is ordered to be removed under subsection (1)(a) or suspended under subsection (1)(b) may appeal against the [F12order,—
(a)if it is an order of the Housing Corporation or Housing for Wales, to the High Court; and
(b)if it is an order of Scottish Homes, to the Court of Session.]
(5)Where a person is suspended under subsection (1)(b), the Corporation may give directions with respect to the performance of his functions and otherwise as to matters arising from the suspension.
(6)A person who contravenes an order under subsection (1)(c) commits a summary offence and is liable on conviction to a fine not exceeding level 5 on the standard scale or imprisonment for a term not exceeding three months or both; but proceedings for such an offence may be brought in England and Wales only by or with the consent of the Corporation or the Director of Public Prosecutions.
Textual Amendments
F10Words substituted by Housing Act 1988 (c. 50, SIF 61), s. 59(2)(3)(4), Sch. 6 Pt. I para. 2
F12Words substituted by Housing Act 1988 (c. 50, SIF 61), s. 59(2)(3)(4), Sch. 6 Pt. I para. 21(2)
(1)The [F13Corporation] may exercise its powers under sections 28 to 30 (inquiry, audit, &c.) in relation to an association which is a registered charity only if the association has, at any time before the powers are exercised, received [F14financial assistance under section 24 of the Local Government Act or] a grant or loan under—
[F15section 50 of the Housing Act 1988 (housing association grants),
section 51 of that Act (revenue deficit grants)]
section 41 (housing association grants),
section 54 or 55 (revenue deficit grants or hostel deficit grants),
section 58(2) (grants or loans by local authorities),
section 79 (loans by [F13Corporation]),
section 31 of the M2Housing Act 1974 (management grants), or
any enactments mentioned in paragraph 2 or 3 of Schedule 1 (pre-1974 grants and certain loans).
(2)In relation to such an association sections 28 to 30 have effect with the following adaptations—
(a)references to an officer, agent or member, or to a member of the committee, include a trustee of the association;
(b)references to the association’s business are confined to its housing activities [F16and such other activities (if any) of the association as are incidental to or connected with its housing activities];
(c)references to the association’s accounts do not include revenue accounts which do not relate to its housing activities, except so far as such accounts are necessary for the auditing of revenue accounts which do so relate or of the association’s balance sheet;
(d)a person is a qualified auditor for the purposes of section 29 (extraordinary audit) only if he is an auditor qualified for the purposes of paragraph 3 of Schedule 3.
(3)In relation to such an association the powers conferred on the Corporation by—
section 28(1) (appointment of person to inquire into association’s affairs), and
section 30(1)(a) and (b) (removal of person in connection with misconduct or mismanagement and suspension with a view to removal),
are exercisable only after consultation with the Charity Commissioners.
Textual Amendments
F13Words substituted by Housing Act 1988 (c. 50, SIF 61), s. 59(2)(3)(4), Sch. 6 Pt. I para. 2
F14Words inserted by Local Government Act 1988 (c. 9, SIF 81:1, 2), s. 24(5)(a)
F15Entries inserted by Housing Act 1988 (c. 50, SIF 61), s. 59(2)(3)(4), Sch. 6 Pt. I para. 22(1)
F16Words added by Housing Act 1988 (c. 50, SIF 61), s. 59(2)(3)(4), Sch. 6 Pt. I para. 22(2)
Marginal Citations
(1)Where, as the result of an inquiry under section 28 or an audit under section 29, the [F17Corporation] is satisfied as regards a registered housing association which is a society registered under the 1965 Act—
(a)that there has been misconduct or mismanagement in the administration of the association, or
(b)that the management of the land belonging to the association would be improved if the land belonging to the association were transferred in accordance with the provisions of this section,
the Corporation may, with the consent of the Secretary of State, direct the association to make such a transfer.
(2)Where the association concerned is a charity, the [F17Corporation] may only direct a transfer to be made to another registered housing association—
(a)which is also a charity, and
(b)the objects of which appear to the Corporation to be, as nearly as practicable, akin to those of the association concerned.
(3)In any other case the Corporation may direct a transfer to be made to the Corporation or to another registered housing association.
(4)A transfer in pursuance of a direction under this section shall be made on the terms that the transferee will pay or undertake to pay to the association concerned such sum (if any) as will be necessary to defray all its proper debts and liabilities (including debts and liabilities secured on the land) after taking into account any money or other assets belonging to the association.
(5)If it appears to the Corporation likely that the association concerned will as a result of the transfer be dissolved under the 1965 Act, the Corporation shall secure that the costs of the dissolution are taken into account in determining the sum payable to the association under subsection (4).
Textual Amendments
F17Words substituted by Housing Act 1988 (c. 50, SIF 61), s. 59(2)(3)(4), Sch. 6 Pt. I para. 2