Friday, 24 October 2014

Government sets out right to transfer rules

Long-awaited plans to give tenants’ groups the right to take ownership of their estates have been published.

The Communities and Local Government department yesterday published its ‘right to transfer’ regulations, which will come before parliament in the autumn. The regulations will bring into force section 34a of the Housing Act 1985, which forces councils to co-operate with tenants’ stock transfer requests.

The rules have been ‘streamlined’ following responses to a public consultation on an earlier draft of the regulations, although a controversial mechanism to allow the secretary of state to halt transfers in some circumstances has been retained.

Under the plans, tenant groups can serve a notice on a council saying they want their homes to be transferred to a new housing association. If certain criteria are met the council would have to co-operate, by providing facilities to help tenants carry out a feasibility study, agreeing a timetable for transfer and to provide facilities and information to help the tenants’ develop their transfer option.

Following a consultation last year, a number of changes have been made to the regulations.

A requirement for an assessment of the competency of the tenant group has been dropped. The CLG has accepted that this is unnecessary as a new tenant-led landlord would have to be assessed by the Homes and Communities Agency. The CLG has also removed a requirement for an arbitrator to become involved if a council rejects a transfer proposal. Instead tenants can complain to the secretary of state.

The CLG has increased the minimum properties to be transferred in a proposal from 25 to 100 and has clarified that a majority of secure tenants are needed for proposals to go through.

The regulations include measures to allow the secretary of state to halt transfers in circumstances where there is ‘clear evidence of a significant detrimental effect on the local authority’s ability to provide housing or other services in the wider authority area’. The department rejected calls for more detailed criteria for such an intervention as it does not wish to ‘fetter’ the discretion of the secretary of state.

The regulations state: ‘An authority can object only where it can show clear evidence of a significant detrimental effect on the local authority’s ability to provide housing or other services in the wider authority area or on the regeneration of the area.’

Tenant groups have previously complained that this allows councils to have tenant-led stock transfer requests blocked too easily.

Mark Prisk, housing minister, said: ‘The new right to transfer is a win-win offer for tenants, giving them the chance to decide who owns and manages the homes they live in, and a commitment to new affordable homes being built in their area.

‘I want to see tenants making full use of the rights at their disposal, and councils standing ready to work with them to maximise any deal’s potential to meet local housing need.’

Readers' comments (13)

  • Why does this not apply to tenants of housing associations? Why can't they havea right to change their landlord?
    Who pays for the transferred stock?
    What about the tenants who don't want to transfer?
    Can anyone envisage Eric Pickles supporting a local authority that argued against such a transfer?
    How does a simple transfer of stock from one owner to another give 'potential to meet housing need'?
    When will private tenants be given any rights at all?

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  • Does 'secure tenants' include those on fixed term insecure 'flexible tenancies'?

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  • This shouldn't happen in London or many parts of the country where there is a housing shortage IF the government is actually concerned about this. Evidence is of course that they're not.
    The lack of requirement for a test of competency is also very worrying.
    Can wider taxpayers appeal against the theft of their assets? Not if Pickles has anything to do with it.

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  • Eric Blair

    I can understand the confusion around Right to Transfer, because although the Government has published its regulations, I can't find a basic guide to this anywhere.

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  • Also possible loss of stock as depending on the nature of the transfer there is the potential that many homes who didn't previously qualify would now be able to be purchased under Right to Acquire. Not a hugely popular scheme, granted, but still possibly an issue, especially in areas of lower housng cost where the lower RTA discount levels are likely to have had more of an effect.

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  • Chris

    With the new financial settlement against council stock will housing associations be able to or wish to afford transfers?

    If the government is serious about choice then the right to transfer landlord should be applied to all rented tenures - otherwise it is just another ruse to remove social housing tenure.

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  • About time too, Parliament granted Council tenants this right in 2008.

    It is quite right that the legitimate desire for tenants to own and control the homes in which they live should be stymied by dogmatic local authorities.

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  • Gresley - HA tenants have never had a right to transfer whilst Councils have long had the option, but I cannot disagree with you that they should.
    The new landlord pays for the stock and will finance this by borrowing against the stock.
    As with any stock transfer there is a ballot of affected tenants. If the ballot is in favour of transfer then all tenants are transferred. That is the nature of a democratic process.
    Moving to a new landlord gives the potential to meet housing need because a) it will use tenants' rent money more efficiently and b) is not constrained by artifical public sector borrowing constraints.
    The rights of private sector tenants are an important issue, but not pertinent to Right to Transfer.
    Cannot answer your question about fixed term tenancies, saw no mention of this in the draft Stock Transfer Manual.

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  • no win no fee - why should tenant led stock transfer not happen in London or anywhere else? There is no loss of social housing stock and the local authority will almost certainly retain significant nomination rights.
    With regards to competency, two points:
    1) Tenants are the real experts when it comes to the quality of the home and the service their landlord provides and the history of tenant management clearly demonstrates that empowered tenants are hugely competent.
    2) The Summary of responses to the Right to Transfer consultation just published makes it clear that CLG believes that the registration requirements of the HCA are a more than adequate test of the competency of any new landlord. If you aren't competent, you won't be registered, so no transfer.
    See page 6 of the Summary here:https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/224535/130717_Response_on_Right_to_Transfer_Regulations.pdf
    How is there any "theft of assets" when the new landlord pays the full value of the stock to the local authority? You may disagree in principle with transfer, but the taxpayer does not lose out financially.
    Whatever your view of Eric Pickles, this legislation was brought in by the Labour government. It is not a party political issue as all main parties support the empowerment of social housing tenants.

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  • Eric Blair - the Statutory Guidance gives more explanation of the regulations. Starts at page 20 of this document: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/224535/130717_Response_on_Right_to_Transfer_Regulations.pdf
    Right to Transfer is brand new, so until it is tried and tested there will be some uncertainty. My organisation hopes to be one of those trailblazers.

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