Under most construction contracts, the contractor takes on the ground conditions risk. However, a recent case has demonstrated that the risk can fall on the employer.
This clarification overrides the discrepancy in the Recovery of Capital Grants and Recycled Capital Grant Fund General Determination 2017 (the “Determination”) that indicates otherwise.
It is a long accepted practice that on the transfer of properties from one RP to another, any grant would automatically transfer. The HCA would usually approve this as part of an application for disposal under Sections 172 or 133 for consent to disposal: those sections have now been repealed and replaced by the new notification regime.
The Determination sets out a number of “Relevant Events”. Those Relevant Events trigger an obligation to repay or recycle the grant in accordance with Determination and Capital Funding Guide (“CFG”). Disposals of land would usually trigger liability, but there is an exception (under category (o)(i)), which states:
“to a Registered Provider (taking the property or land subject to liability for the Capital Grant within it pursuant to section 33 of the Housing and Regeneration Act 2008, Section 27(6) of the Housing Act 1996 or any other predecessor legislation with equivalent effect) with prior approval of the Agency;” (our emphasis).
A strict interpretation of this wording implies the HCA will have to give prior consent to the transfer of grant on disposals between RPs to ensure the grant transfers automatically. We questioned whether this was really the interpretation of this wording?
The HCA has confirmed that this is not the intention. Whilst the wording of the Determination implies that consent is required, the HCA will not require that RPs seek its approval where they are transferring grant-funded property or land to another RP. The HCA is not proposing to alter the wording of the Determination in the meantime.
So what does this mean?
When property is transferring between RPs, any grant will automatically transfer. There is no need to obtain the consent of the HCA to this. The parties simply have to notify the HCA of the transfer in accordance with the procedures and processes set down in the CFG.
For more information
For more information, please contact Jonathan Cox.
The UK Government has been consulting on how it should promote social value in its procurements. Here is our response that we submitted to the consultation...
The Tenant Fees Act 2019 came into force on 1 June 2019.
A recent case in the Court of Appeal will no doubt bring a sigh of relief for employers, but a corresponding sigh of disappointment may be uttered for equality and gender balance in the workplace.
This briefing assists response to the consultation paper by outlining the consultation questions, providing some background information and prompting some thoughts and potential answers.
A report published on 29 May by the Institute for Fiscal Studies (IFS) has found that since 2009-10, local government spending on services has fallen on average by 21% in real terms.
A long-awaited decision of the Court of Appeal has clarified that a lower standard of proof should apply than previously thought before an Inquest can return a conclusion of suicide.
New regulations come into force on 1 June 2019, amending the Section 21 (s21) prescribed form template for use with assured shorthold tenancies.
In a challenging economic climate with continuing budget cuts and increasing expectations of staff, sickness absence remains an ongoing problem that is important to address.
Social housing providers will routinely have a number of construction projects underway at any one time. It is essential for client teams to understand and avoid key contract management pitfalls.
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.