Social Housing Speed Read – the updated Tenant Involvement and Empowerment Standard

We take a look at the changes introduced and considerations to be taken into account when registered providers are considering disposing of properties.

Deregulation

The updated Tenant Involvement and Empowerment Standard (TIE Standard) follows the move in April to deregulate housing associations and a sector consultation. There were a total of 156 responses to the consultation with the majority being in favour of the change.

Prior to this deregulation, housing associations were required to obtain the Homes and Communities Agency’s (HCA) consent before disposing of any properties. In considering whether to grant such consent, the HCA would review the tenant consultation the applicant had carried out to consider whether such was adequate.

Even though such consent is no longer required, housing associations must still comply with the TIE Standard if transferring tenanted stock.

Strengthened standards

Following the deregulation, the HCA considered that the TIE Standard needed to be made “more explicit and strengthened”. The previous standard required registered providers to:

• Consult with tenants if they are proposing to change their landlord or proposing a significant change in their management arrangements; and
• Clearly set out the costs and benefits of relevant options to tenants.

The updated standard requires registered providers to:

• Consult with tenants in a fair, timely, appropriate and effective manner if there is a proposed change in landlord or a significant change in management arrangements;
• Set out the proposals clearly and in an appropriate amount of detail, plus to set out any actual or potential advantages and disadvantages (including costs) to tenants in the immediate and longer term; and
• Be able to demonstrate to affected tenants how they have taken the outcome of the consultation into account when reaching a decision.

Other considerations

Although consent from the HCA is no longer required to dispose of properties, housing associations cannot simply dispose of stock in any which way they choose; there are other matters which need to be taken into consideration:

• Nomination agreements, planning permissions, s106 agreements, transfers, leases or documents registered against the title as any of these may prevent or restrict disposals. Such could prevent disposals outside the sector or restrict to certain types of organisation
• Any existing grant or loan covenants attached to a property, as these may carry conditions which could be breached in the instance of a disposal
• If an association is registered with the Charity Commission, they will need to comply with the Charities Act 2011 requirements in respect of land disposals
• Potential disposal clawback arrangements if the housing stock has previously been the subject of a Large Scale Voluntary Transfer from a local authority.

For the avoidance of doubt, the TIE Standard now clearly sets out to housing providers what is expected of them in consulting with tenants when disposing of stock or significantly changing their management arrangement. Any registered provider who is doing this should carefully consider how to approach the consultation to ensure effective communication to all tenants in line with the Standard.

If you have any questions on the above and how it will affect social housing providers, or any other questions as a social housing provider, please do not hesitate to contact John Murray or a member of our expert Social Housing Team.