Housing Associations Act 1985

Part I — Regulation of Housing Associations

Introductory

Meaning of "housing association " and related expressions

1

• (1) In this Act “housing association” means a society, body of trustees or company—

• (a) which is established for the purpose of, or amongst whose objects or powers are included those of, providing, constructing, improving or managing, or facilitating or encouraging the construction or improvement of, housing accommodation, and

• (b) which does not trade for profit or whose constitution or rules prohibit the issue of capital with interest or dividend exceeding such rate as may be prescribed by the Treasury, whether with or without differentiation as between share and loan capital ;

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) In this Act “fully mutual”, in relation to a housing association, means that the rules of the association—

• (a) restrict membership to persons who are tenants or prospective tenants of the association, and

• (b) preclude the granting or assignment of tenancies to persons other than members;

and “co-operative housing association” means a fully mutual housing association which is a registered society within the meaning of the Co-operative and Community Benefit Societies Act 2014 (in this part referred to as “the 1965 Act”).

• (3) In this Act “self-build society” means a housing association whose object is to provide, for sale to, or occupation by, its members, dwellings built or improved principally with the use of its members’ own labour.

Meaning of " housing trust"

2

In this Act “housing trust” means a corporation or body of persons which—

• (a) is required by the terms of its constituent instrument to use the whole of its funds, including any surplus which may arise from its operations, for the purpose of providing housing accommodation, or

• (b) is required by the terms of its constituent instrument to devote the whole, or substantially the whole, of its funds to charitable purposes and in fact uses the whole, or substantially the whole, of its funds for the purpose of providing housing accommodation.

Registration

The register

3

Eligibility for registration

4

Registration

5

Removal from the register

6

Appeal against removal

7

Disposal of land

Power of registered housing associations to dispose of land

8

Control by Housing Corporation of dispositions of land by housing associations

9

• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (1A) Subject to section 10, the consent of the relevant regulator is required for any disposition of grant-aided land (as defined in Schedule 1) by an unregistered housing association; and for this purpose “the relevant regulator” means,—

• (a) if the land is in England, the Regulator of Social Housing, and

• (b) if the land is in Wales, the Welsh Ministers.

• (2) Consent under this section may be so given—

• (a) generally to all housing associations or to a particular housing association or description of association;

• (b) in relation to particular land or in relation to a particular description of land;

and may be given subject to conditions.

• (3) A disposition by a housing association which requires consent under this section is valid in favour of a person claiming under the association notwithstanding that that consent has not been given; and a person dealing with the association, or with a person claiming under the association, shall not be concerned to see or inquire whether any such consent has been given.

This subsection has effect subject to section 12 (avoidance of certain dispositions of houses without consent).

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) For the purposes of this section “disposition” means sale, lease, mortgage, charge or any other disposal.

• (6) Consent under this section must be in writing.

Dispositions excepted from s. 9

10

• (1) A disposition by an unregistered housing association which is a charity is not within section 9 if by virtue of sections 117 to 121 and 124 of the Charities Act 2011 it cannot be made without an order of the court or the Charity Commission; but before making an order in such a case the Charity Commission shall consult,—

• (a) in the case of dispositions of land in England, the Regulator of Social Housing, and

• (b) in the case of dispositions of land in Wales, the Welsh Ministers.

• (2) A letting ... by an unregistered housing association which is a housing trust, is not within section 9 if it is—

• (a) a letting of land under a secure tenancy, or

• (b) a letting of land under what would be a secure tenancy but for any of paragraphs 2 to 12 of Schedule 1 to the Housing Act 1985 or paragraphs 1 to 8 of Schedule 2 to the Housing (Scotland) Act 1987 (tenancies excepted from being secure tenancies for reasons other than that they are long leases) or

• (c) a letting of land under an assured tenancy or an assured agricultural occupancy, or

• (d) a letting of land in England or Wales under what would be an assured tenancy or an assured agricultural occupancy but for any of paragraphs 4 to 8 of Schedule 1 to the Housing Act 1988, ...

• (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (f) a letting of land under a tenancy or licence that is an occupation contract, or

• (g) a letting of land under a tenancy or licence under what would be an occupation contract if notice had been given (see Schedule 2 to the Renting Homes (Wales) Act 2016 (anaw 1)), other than a long tenancy within the meaning of letting of the type described in paragraph 8 of that Schedule (meaning of long tenancies).

• (3) The grant by an unregistered housing association which does not satisfy the landlord condition in section 80 of the Housing Act 1985 (bodies which are capable of granting secure tenancies) of a lease for a term ending within the period of seven years and three months beginning on the date of the grant is not within section 9 unless—

• (a) there is conferred on the lessee (by the lease or otherwise) an option for renewal for a term which, together with the original term, would expire outside that period, or

• (b) the lease is granted wholly or partly in consideration of a fine.

• (4) In subsection (3) the expression “lease” includes an agreement for a lease and a licence to occupy, and the expressions “grant” and “term” shall be construed accordingly.

Further provisions as to certain disposals of houses

11

Avoidance of certain disposals of houses without consent

12

A disposal of a house by a housing association made without the consent required by section 9 is void unless—

• (a) the disposal is to an individual (or to two or more individuals), and

• (b) the disposal does not extend to any other house.

Control of payments to members, etc.

Payments by way of gift, dividend or bonus

13

Maximum amounts payable by way of fees, expenses, etc.

14

Payments and benefits to committee members, etc.

15

Constitution, change of rules, amalgamation and dissolution

General power to remove committee member

16

Power to appoint new committee member

17

Exercise of powers under ss. 16 and 17 in relation to registered charities

18

Change of rules under the 1965 Act

19

Change of objects by certain charities

20

Amalgamation and dissolution under the 1965 Act

21

Housing Corporation's power to petition for winding up

22

Transfer of net assets on dissolution

23

Accounts and audit

General requirements as to accounts and audit

24

Appointment of auditors by associations registered under the 1965 Act

25

Accounting requirements for registered housing associations not within the 1965 Act

26

Responsibility for securing compliance with accounting requirements

27

Inquiries into affairs of housing associations

Inquiry

28

Extraordinary audit for purposes of inquiry

29

General powers exercisable as a result of inquiry or audit

30

Exercise of powers under ss. 28 to 30 in relation to registered charities

31

Power to direct transfer of land to another housing association or the Housing Corporation

32

Miscellaneous

Recognition of central association

33

Provision of land by county councils

34

• (1) Where a housing association wishes to erect houses in Englandwhich in the opinion of the Secretary of State are required and the local housing authority in whose district the houses are proposed to be built are unwilling to acquire land with a view to selling or leasing it to the association, the county council, on the application of the association, may acquire land for that purpose.

• (2) For that purpose the county council may exercise all the powers of a local housing authority under Part II of the Housing Act 1985 (provision of housing) in regard to the acquisition and disposal of land; and the provisions of that Act as to the acquisition of land by local housing authorities for the purposes of that Part apply accordingly.

Housing trusts: power to transfer housing to local housing authority

35

• (1) A housing trust may—

• (a) sell or lease to the local housing authority the houses provided by the trust, or

• (b) make over to the authority the management of the houses.

• (2) So far as subsection (1) confers power to dispose of land—

• (za) it does not apply to private registered providers of social housing (on whom power to dispose of land is conferred by section 171 of the Housing and Regeneration Act 2008);

• (a) it does not apply to registered social landlords (on whom power to dispose of land is conferred by section 8 of the Housing Act 1996);.

• (b) it has effect subject to section 9 (dispositions requiring consent of Corporation) where the housing trust is an unregistered housing association and the land is grant-aided land (as defined in Schedule 1); and

• (c) it has effect subject to sections 117 to 121 of the Charities Act 2011 (restrictions on dispositions of charity land) where the housing trust is a charity.

Housing trusts: functions of Secretary of State with respect to legal proceedings

36

• (1) If it appears to the Secretary of State—

• (a) that the institution of legal proceedings is requisite or desirable with respect to any property belonging to a housing trust, or

• (b) that the expediting of any such legal proceedings is requisite or desirable,

he may certify the case to the Attorney-General who may institute legal proceedings or intervene in legal proceedings already instituted in such manner as he thinks proper in the circumstances.

• (2) Before preparing a scheme with reference to property belonging to a housing trust, the court or body which is responsible for making the scheme shall communicate with the Secretary of State and consider any recommendations made by him with reference to the proposed scheme.

Supplementary

Definitions relating to the 1965 Act and societies registered under it

37

Definitions relating to charities

38

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Minor definitions

39

In this Part—

• “assured tenancy” has, in England and Wales, the same meaning as in Part I of the Housing Act 1988 and, in Scotland, the same meaning as in Part II of the Housing (Scotland) Act 1988;

• “assured agricultural occupancy” has the same meaning as in Part I of the Housing Act 1988.

• “mental disorder” has the same meaning as in the Mental Health Act 1983 or the Mental Health (Scotland) Act 1984;

• “occupation contract” has the same meaning as in section 7 of the Renting Homes (Wales) Act 2016 (anaw 1);

• “secure tenancy” has the same meaning as in section 79 of the Housing Act 1985 or 44 of the Housing (Scotland) Act 1987;

• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Index of defined expressions: Part I

40

The following Table shows provisions defining or explaining expressions used in this Part (other than provisions defining or explaining an expression used only in the same section or paragraph):—

Part II — Housing Association Finance

Housing association grants

Housing association grants

41

Projects qualifying for grant: accommodation for letting, hostels

42

• (1) A project is a housing project for the purposes of housing association grant if it is undertaken for the purpose of—

• (a) providing dwellings for letting,

• (b) providing a building for use as a hostel,

• (c) improving or repairing such accommodation, or

• (d) providing land or buildings which, in the opinion of the Secretary of State, will be for the benefit of persons for whom such accommodation is provided, or improving or repairing such buildings.

• (2) In subsection (1)—

• (a) " letting " in paragraph (a) includes the grant of a shared ownership lease, and

• (b) in paragraph (b) " building " includes part of a building and " hostel" includes part of a hostel.

• (3) References in this section to letting or the grant of a lease include the grant of a licence to occupy.

Projects qualifying for grant: improvement for sale

43

A project where a registered housing association, after carrying out works of repair, improvement or conversion—

• (a) disposes of a house as one dwelling,

• (b) divides a house into two or more separate dwellings and disposes of them, or

• (c) combines two houses to form one dwelling and disposes of it,

is a housing project for the purposes of housing association grant.

Projects qualifying for grant: repair or improvement after exercise of right to buy etc.

44

• (1) A project where a registered housing association carries out works of repair or improvement to a dwelling-house, or to the building in which a dwelling-house is situated, after the tenant has exercised, or claimed to exercise, the right to buy or the right to a shared ownership lease under Part V of the Housing Act 1985 is a housing project for the purposes of housing association grant.

• (2) Where in such a case a housing association grant is made after the tenant has exercised the right to buy or the right to be granted a shared ownership lease, the Secretary of State may reduce the amount of the grant.

• (3) In this section " dwelling-house " has the same meaning as in Part V of the Housing Act 1985.

Projects qualifying for grant: disposal to tenant of charitable housing association etc.

45

• (1) A project where a registered housing association first acquires a house and then disposes of it at a discount to a tenant to whom this section applies is a housing project for the purposes of housing association grant.

• (2) This section applies to a tenant of a publicly-funded dwelling who, but for paragraph 1 of Schedule 5 to the Housing Act 1985 (exceptions to the right to buy: landlord a charitable housing trust or housing association) would have the right to buy.

• (3) A dwelling is publicly-funded for this purpose if housing association grant has been paid in respect of a project which included—

• (a) the acquisition of the dwelling,

• (b) the acquisition of a building and the provision of the dwelling by means of the conversion of the building, or

• (c) the acquisition of land and the construction of the dwelling on the land.

• (4) Where a registered housing association contracts for the acquisition of a house and, without taking the conveyance, grant or assignment, disposes of its interest to a tenant to whom this section applies, subsection (1) and the following provisions have effect as if the association first acquired the house and then disposed of it to the tenant—

• section 8 (disposal of land by registered housing associations),

• section 9 (consent of Housing Corporation to disposals),

• Schedule 2 (covenants for repayment of discount on early disposal and restricting disposal of houses in National Parks, &c),

• section 79(2) (power of Housing Corporation to lend to person acquiring interest from registered housing association), and

• section 130 of the Housing Act 1985 (reduction of discount on exercise of right to buy where previous discount given).

Applications for housing association grant

46

• (1) A housing association grant is not payable in respect of a project unless an application for it is submitted to the appropriate body.

• (2) The appropriate body in England and Wales is—

• (a) where the housing association concerned makes an application to a local authority for a loan under section 58(2) in connection with the project, that authority, and

• (b) in any other case, the Housing Corporation.

• (3) The appropriate body in Scotland is a local authority, the Housing Corporation or the Secretary of State.

• (4) Where a local authority or the Housing Corporation receive an application under this section, they shall forward it to the Secretary of State together with their own assessment of the project.

Amount of housing association grant: net cost

47

• (1) The housing association grant payable in respect of a project is equal to the net cost of the project to the association, determined in accordance with the following provisions, but subject to section 48 (maximum levels of cost and grant).

• (2) The net cost of a project to the association is the difference between—

• (a) the estimated expenditure of the association which is, in the opinion of the Secretary of State, attributable to the project and is reasonable and appropriate having regard to all the circumstances, and