These regulations are part of a suite of measures introduced over the last 12 months to reverse the Office of National Statistics’ decision to reclassify housing associations as ‘public non-financial corporations’.
The Regulations largely reflect what was anticipated (see detail below), but also go further in removing all rights for local authorities in their capacity as company members or shareholders of private registered providers (“PRPs”). Key to note is also that they will override any contractual arrangements to which a PRP is party, in so far as these are inconsistent with the Regulations, and they will apply irrespective of any inconsistency between the Regulations and the PRP’s constitution.
The Regulations are awaiting formal approval by Parliament, and they will take effect six months after the day that the Regulations come into effect (the “appointed day”). It is anticipated that this will be around the end of March 2018, in line with the end of the financial year, but no definitive timetable is in place.
Key provisions are as follows:
Any attempts to subsequently exceed 24% (by way of appointment etc.) will be invalid.
A PRP must remove a sufficient number of local authority board members to meet this requirement; if the local authority does not inform the PRP which board members it would like to remove, the rest of the board can select who to remove by way of majority vote.
Any provision within a PRP's constitution requiring the presence of a local authority Board Member for a Board meeting to be quorate will no longer have effect.
A local authority that is a company member or shareholder will cease to hold or exercise any local authority voting rights in that capacity.
The Regulations require the PRP to amend its constitution to re-assign the votes pro-rata among the remaining voting membership. If the PRP does not amend its constitution, then the voting rights will be deemed to be re-assigned in this way.
Please note that this provision only applies to PRPs where the local authority itself is a member/shareholder; it does not affect the voting rights of local authority nominees/appointees who are individual members/shareholders. Any voting rights offered to such a class of shareholder will not, therefore, be affected by these Regulations.
If a PRP has local authority officers on the board, then any provision within its constitution that requires a board resolution be approved other than by a majority of the Board (i.e. unanimous decisions) will be amended to require approval by at least 75% of the votes cast (or a lower percentage if specified in the constitution.)
There is a slight lack of clarity here – the Regulations state this is only where such a requirement is within the constitution itself. There may, however, be provisions within a PRP’s transfer agreement and it is unclear how to interpret these where the changes relate to issues unconnected to the subject matter of the Regulations (for example, changes to objects requiring consent under the transfer agreement). The Regulations do state that they apply notwithstanding anything in contractual arrangements, and therefore it could be assumed that this will also apply to any requirement to obtain consent to constitutional changes within a transfer agreement.
Nothing in the Regulations apply to non-profit PRPs which are wholly owned by local authorities.
The Regulations are not yet in a final form, and we will, therefore, issue updates as and when any changes arise; in particular, we will be liaising with the NHF and DCLG regarding our comments on the Regulations.
In the meantime, we understand that many of our clients will be keen to discuss the Regulations with their local authorities and we are happy to advise on the best approach to this in light of your constitutional arrangements. We also offer fixed-fee packages to amend your constitution to reflect the new Regulations.
You can find a full copy of the Regulations here. You can also see our previous ebriefings on the Regulations: Deregulation Day and Goodbye to the Golden Share.
To find out more about the change in regulations and how it will affect you, please contact Gemma Bell, Victoria Jardine, Sarah Greenhalgh or Rose Klemperer.
It is anticipated that as lockdown restrictions ease, and particularly with children and young adults returning to education, cases of meningitis will start to rise.
As we continue to emerge from lockdown measures and deal with local measures and the short and long term economic impact of Covid-19, local authorities will need to re-assess how services will be delivered for years to come.
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).
Two final pieces of the possession jigsaw have been published on 15 September 2020. Mr Justice Knowles’ working group on possession proceedings has issued its guidance on the “overall arrangements” for possession proceedings.
One change proposed by the Building Safety Bill is the introduction of a duty holder regime, which will see statutory responsibility for the safety of higher risk buildings placed on key individuals
Throughout this pandemic, the Competition and Markets Authority (CMA) has been publishing various “Statements on Coronavirus” (Statements) which provide guidance on consumer rights during this time.
A recent increase in COVID-19 cases in the UK means new measures are being put in place in an effort to reduce the risk of a second wave. Whilst the impact of COVID-19 continues to be felt, it is important to remain focused on the sector’s road to recovery.
Sometimes half an hour at a conference gives you the reality that has been staring you in the face all along. That was my experience watching “Change is on the Horizon”
Following our recent e-briefing on Possession Notices, Helen Tucker and Emilie Pownall from our housing litigation team discuss the impact of the changes on social landlords.
Not only has the possession stay been extended until 20 September, the notice periods to be given to tenants has been extended in certain circumstances with some important exceptions.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.