IFM09420 - Becoming a RIF: Conditions not initially met
When a co-ownership scheme is applying to become a RIF and it has not previously been a RIF then, provided certain conditions are met, there is a grace period where specified qualifying conditions can be treated as met.
This is designed to provide some flexibility in the early stages of the scheme. The term ‘grace period’ is not used in the regulations (instead referring to the condition or requirement as “treated as met for initial period”) but is used here as a descriptive term for the effect of the rules.
The qualifying conditions that can be covered by a grace period are:
the ownership requirement (Regulation 9) – IFM09220
the UK property rich condition (Regulation 13) – IFM09250
To use a grace period, the entry notice submitted for the scheme must include the following:
- A clear statement that the scheme is relying on Regulation 9 or 13 to meet the qualifying condition.
- A declaration that the scheme operator intends and reasonably expects to meet the qualifying condition within 12 months from the date specified in the notice.
- A detailed explanation of the actions the scheme operator has already taken or intends to take to ensure the qualifying condition is met within 12 months (the ‘initial period’).
- There is no definition of ‘intends’ or ‘reasonably expects’, so those terms will take their normal meaning. It is expected that the operator of a relevant scheme will have a clear documented plan to meet the relevant conditions within 12 months.