The Government first announced plans for a shared ownership right to buy in October 2019. At the time the sector raised concerns about the impact the plans would have on housing associations ability to borrow. An election and a pandemic later the Government announced, during the CIH Housing Festival last week, the return of the right to shared ownership as part of its Affordable Homes Programme (AHP).
The HCA (Homes and Communities Agency) has concluded its consultation on an amendment to the Tenant Involvement and Empowerment Standard (TIE Standard) on whether or not to require a greater level of consultation when landlords transfer stock or change management arrangements.
The consultation considered necessary changes in response to “asset freedoms” coming into force from 6 April 2017, which mean that housing associations no longer need permission from the HCA to sell or charge their assets, make certain constitutional changes or restructure.
The consultation, for which 192 responses were received, has now concluded. As a result of the consultation, paragraph 2.2.3 of the TIE Standard was amended on 14 July 2017:
From: 2.2.3 ‘Registered providers shall consult with tenants setting out clearly the costs and benefits of relevant options if they are proposing to change their landlord or when proposing a significant change in their management arrangements.’ [THIS IS NO LONGER IN FORCE]
To: 2.2.3 ‘Where registered providers are proposing a change in landlord for one or more of their tenants or a significant change in their management arrangements, they shall consult with affected tenants in a fair, timely, appropriate and effective manner. Registered providers shall set out the proposals clearly and in an appropriate amount of detail and shall set out any actual or potential advantages and disadvantages (including costs) to tenants in the immediate and longer term. Registered providers must be able to demonstrate to affected tenants how they have taken the outcome of the consultation into account when reaching a decision.’ [NOW IN FORCE]
In summary, the changes are as follows:
- The term ‘Tenants’ has been changed to ‘affected tenants.’ This is to stop the consultation requirements from becoming disproportionately burdensome. For example, if a large provider with 10,000 units was changing the landlord for 10 tenants, they would only need to consult with the 10 affected tenants instead of all 10,000 tenants.
- Consultations must take place in a ‘fair, timely, appropriate and effective’ manner. This is designed to encourage consultations to be meaningful and not just a tick-box exercise. There is no specific definition of these terms, however, so how it is applied will vary depending on the circumstances.
- ‘Proposing to change their landlord’ was replaced with ‘proposing a change in landlord for one or more of their tenants’. This clarified that no matter how small the disposal or number of tenants affected, consultation must still occur.
- It was included within the TIE Standard that providers should set out ‘clearly and in an appropriate amount of detail and shall set out any actual or potential advantages and disadvantages (including costs) to tenants in the immediate or longer term.’ This is to ensure that information given to tenants will cover possible future risks. The wording initially proposed was ‘over the short, medium and long term’, but, following the consultation accepting this was overly specific and unclear, this was amended to the ‘immediate or longer term’.
- A requirement that ‘Registered providers must be able to demonstrate to affected tenants how they have taken the outcome of the consultation into account when reaching a decision’ was added to the TIE Standard. This wording is designed to ensure that providers can show they took the consultation outcome into account, but ultimately leaves the final decisions in their hands.
For more information on the consultation, please see here.
If you have any queries regarding the content of this article, please contact Katherine Raison.
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