Chapter 5 - Disposal of property
Introductory
Section 170 - Overview
499.This section provides an overview of the Chapter.
Section 171 - Power to dispose
500.This section states that a registered provider may dispose of land, subject to the following provisions of this Chapter. This section broadly replicates the effect of section 8 of the 1996 Act which gives RSLs power to dispose of land subject to section 9 of that Act.
501.This section specifies that a non-profit registered provider may dispose of the landlord’s interest under a secure tenancy only to another non-profit registered provider, not to a profit-making registered provider or an unregistered person.
Regulator’s consent
Section 172 - Requirement of consent
502.Subsection (1) states that any disposal of a dwelling by a registered provider requires the regulator’s consent, but only if that dwelling is social housing.
503.Subsection (2) prohibits the regulator from consenting to a disposal by a non-profit registered provider which it believes is being made with a view to enabling the provider to distribute assets to members.
504.Subsection (3) states that the regulator’s consent is not needed to a disposal of social housing by a registered provider if the disposal falls within an exception listed in section 173. This broadly replicates the effect of section 9(1) of the 1996 Act.
Section 173 - Exceptions
505.This section lists exceptions to the requirement for consent in section 172.
506.Subsection (2) states that consent is not required for disposal by way of:
an assured tenancy,
an assured agricultural occupancy,
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),
a secure tenancy, or
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).
507.This makes clear that consent is not required for residential tenancies. It broadly replicates the effect of section 10(1) of the 1996 Act. It also ensures that the profit-making registered providers (as well as non-profit registered providers) are exempt from the requirement to obtain consent from the regulator before granting a residential tenancy of a type listed in section 173(2).
508.Subsection (3) states that consent is not required for a disposal to which section 81 or 133 of the Housing Act 1988 or section 173 of the Local Government and Housing Act 1985 applies, as consent is already required under those provisions. This broadly replicates the effect of section 10(2) of the 1996 Act.
509.Subsection (4) states that consent is not required for a disposal under Part V of the Housing Act 1985 (right to buy).
510.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 section 180.
511.Subsections (4) and (5) together broadly replicate the effect of section 10(3) of the 1996 Act.
Section 174 - Procedure
512.This section sets out the procedure for the regulator giving consent to disposals.
513.Subsection (1) states that consent may be either general or specific. Together with subsection (4)(which states that consent may be conditional), this broadly replicates the effect of 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.
514.Subsection (2) states that consent may be retrospective.
515.Subsection (3) states that consent may be expressed by reference to a policy for disposal submitted by a registered provider.
516.Subsection (5) requires the regulator, before giving a consent, to consult:
the HCA,
one or more bodies appearing to it to represent the interests of registered providers, and
one or more bodies appearing to it to represent the interests of tenants.
517.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.
Section 175 - Disposal without consent
518.This section states that a disposal by a registered provider is void if it required the regulator’s consent and the regulator had not given consent.
519.There is one exception: where a non-profit registered provider disposes of a single dwelling to one or more individuals, and the registered provider reasonably believes at the time of the disposal that the buyer intends to use the property as their principal residence. This broadly replicates the effect of 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..
Section 176 – Notification where disposal consent not required
520.This section requires a non-profit registered provider which disposes of land other than social housing to notify the regulator of the disposal. There is power for the regulator to give a direction dispensing with this requirement. This direction is subject to the provisions in section 174(1) and (3) to (6).
Proceeds
Section 177 - Separate accounting
521.This section requires that the accounts of a registered provider must show its net disposal proceeds as a separate “disposal proceeds fund”. It sets out what constitutes “net disposal proceeds”, including the proceeds of specified forms of sale, grant received under specified powers, repayments of specified discounts, and other proceeds of sale and grants specified by the regulator.
522.This section also requires the regulator to determine amounts to be deducted in determining the proceeds of sale, to make a direction governing the method of constituting the fund, and to make a determination governing how interest is added to the fund. It specifies that section 127 (5) to (7) and sections 141 and 142 apply in relation to a direction under this section as they apply to a direction under section 127.
523.It also specifies that where this section applies in relation to the proceeds of sale arising on disposal, section 32 of this Act, section 27 of the 1996 Act and section 52 of the Housing Act 1988 do not apply. This ensures that net disposal proceeds in the disposal proceeds fund may not be recovered by the Homes and Communities Agency under its grant recovery powers.
Section 178 – Use of proceeds
524.This section broadly replicates the effect of 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. It also requires the regulator to obtain the Secretary of State’s approval for a direction on how sums in the disposals proceeds fund may be used or allocated.
Tenants’ rights and duties
Section 179 - Application of Housing Act 1996
525.This section 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).
Section 180 – Right to Acquire
526.This section 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.
527.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 section 181 and 182 respectively.
528.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 broadly 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.
Section 181 – Interpretation: “publicly funded”
529.This section defines when a dwelling is “publicly funded”. This broadly replicates the effect of 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 1 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.
Section 182 – Interpretation: “remained in the social rented sector”
530.This section defines when a dwelling has “remained in the social rented sector”. This broadly replicates the effect of 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.
Section 183 - Interpretation: other expressions
531.This section provides a number of definitions in relation to this group of sections. ‘Infrastructure’ in this section has the same meaning as in Part 1.
Section 184 – Right to acquire: supplemental
532.This section provides that section 17 of the 1996 Act applies in relation to a right to acquire under section 180 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.
Section 185 – Right to acquire: consequential amendments
533.This section makes consequential amendments to sections 16, 16A, 20 and 21 of the 1996 Act, to restrict their application to properties in Wales.
Miscellaneous
Section 186 - Former registered providers
534.This section ensures that sections 171 to 175 (provisions on disposals) continue to apply in respect of any property owned by a person at the time it was registered. This is equivalent to section 9(6) of the 1996 Act.
Section 187 – Change of use, etc.
535.This section provides that the disposal consent provisions continue to apply in relation to the disposal of land where it ceases to be a dwelling, or where exception 2 or 3 in section 173 applies, a change of use of that land.
Section 188 – Trustees
536.This section broadly replicates the effect of the first sentence of section 8(2) of the 1996 Act.
Section 189 – Charities
537.This section makes it clear that nothing in this Chapter authorises a charity to effect a disposal which it would otherwise not have power to effect. This broadly replicates the effect of the second sentence of section 8(2) of the 1996 Act.
Consents under other legislation
Section 190 – Consent to disposals under other legislation
538.Under section 171D of the Housing Act 1985, sections 81 and 133 of the Housing Act 1988 and section 173 of the Local Government and Housing Act 1989 a registered provider must obtain the consent of the Secretary of State before disposing of dwellings in relation to which a tenant has a preserved right to buy (section 171D of the Housing Act 1985) or on the first onward disposal of dwellings acquired through transfer from a housing action trust, a local authority or a new town corporation. This section provides that the functions of the Secretary of State in considering such consents are transferred to the Regulator.
Section 191 – Section 190: consequential amendments
539.This section makes amendments to the Housing Act 1985, the Housing Act 1988 and Local Government and Housing Act 1989 which are consequential on section 188.
540.Subsection (1) amends section 171D of the Housing Act 1985 to replace references to “Secretary of State” with “appropriate authority”, which in relation to a disposal in England by a registered provider means the Regulator of Social Housing, in relation to any other disposal in England means the Secretary of State, and in relation to any such disposal in Wales means the Welsh Minsters.
541.Subsections (2), (3) and (4) make similar amendments to section 81 of the Housing Act 1988, section 133 of the Housing Act 1988 and section 173 of the Local Government and Housing Act 1989 respectively.
