News story

Commission reminds housing associations of changes to the land disposal framework

Regulator issues advice to English registered providers of social housing (RPs) which are charities.

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The Charity Commission, the independent regulator of charities in England and Wales, is issuing this alert to English registered providers of social housing (RPs) which are charities, as regulatory advice under section 15(2) of the Charities Act 2011. This alert reminds affected charities about changes to the way in which RPs which are registered charities must comply with Part 7 of the Charities Act 2011 with regard to disposals of land and mortgages, as well as about general duties that apply both to registered and exempt charities.

These changes will take effect from 6 April 2017 (today) and have been brought about by changes made by the Housing and Planning Act 2016. These changes include the repeal of the existing requirements for private RPs to obtain consent from:

a. The Homes and Communities Agency (HCA) under section 172 of the Housing and Regeneration Act 2008.

or

b. The HCA, or Welsh Ministers in relation to land in Wales, under section 133 of the Housing Act 1988.

Consent under these acts automatically disapplied the requirements of sections 117-121 and 124 of the Charities Act 2011.

The repeal of these consent provisions, brought about by the Housing and Planning Act 2016, means that non-exempt charitable RPs will now need to comply with sections 117-121 of the Charities Act 2011 when they dispose of land, and with section 124 when granting mortgages over land, either by self-certification of compliance or by obtaining an order from the Commission or the court (unless one of the other exemptions in the Act applies). These provisions do not apply to RPs that are exempt charities. All charities, whether registered or exempt, must continue to comply with their general legal duties when disposing of land.

Those charities affected by these changes are now subject to the requirements of sections 117-121 and 124 of the Charities Act 2011 and need to actively consider them. The Commission is writing to charities who may be affected to remind them of the changes.

The Commission provides clear guidance to all charities about the requirements of the Charities Act 2011 with regards to land disposals, and non-exempt charitable RPs should follow this guidance and seek legal advice if required.

David Holdsworth, Chief Operating Officer at the Charity Commission, said:

This legal framework supports trustees in making responsible and well-informed decisions about charity property, and provides safeguards to deal with conflicts of interest and protect the interests of charity beneficiaries. Self-certification is not onerous and involves taking appropriate professional advice - these are, on the whole, basic steps that you would expect responsible charity trustees to be taking. We have clear guidance which the trustees of charities affected by these changes should consider further.

The Charities Act framework is designed so that that most disposals by registered charities are eligible for self-certification. The Commission is aware that certain types of disposals by registered charities that are RPs will require consent by order. The Commission will be working with the sector and with the HCA to ensure that such disposals can be dealt with as promptly as possible.

Charities who do require an order from the Commission can do so by using the Get our permission page on the website.

Published 6 April 2017