Housing associations consider deregistering with the Charity Commission

It follows a change in the law around the disposal of housing stock

Some housing associations are considering deregistering with the Charity Commission in a bid to avoid extra red tape after a change in the law.

About a third of housing associations are registered as charities but they are primarily regulated by the Homes and Communities Agency and were required to seek its consent when disposing of housing stock, which would be accepted by the Charity Commission.

But the Housing and Planning Act, which gained royal assent earlier this month, removes the requirement for the HCA to approval to sales, meaning those housing associations registered as charities would require the commission’s permission to proceed.

The change is part of a move to reduce regulation and make it easier for housing associations to dispose of stock within the act, which also extends the right-to-buy scheme to housing associations tenants, allowing them to buy their homes at a discounted rate.

Some housing associations are investigating the possibility of becoming community benefit societies, allowing them to keep their charitable status but avoid the need for the commission's approval for disposals. 

In a board meeting on 19 May, a week after the act gained royal assent, the Cheshire-based social landlord Halton Housing Trust, said it had taken legal advice on the matter.

The minutes, available on the housing association’s website, describe the deregulation of disposals from the HCA as a positive step but express concerns about obtaining commission regulation.

"This could present a worse situation than exists at the moment because the Charity Commission has never had to do this before and it will not have the resources to do this," the minutes said.

"For housing associations like the trust this could severely hinder effective asset management and put us at a disadvantage when compared with others."

The minutes say legal advisers had told the association that it could change its legal status from a company limited by guarantee and registered with the Charity Commission to a community benefit society.

The change would mean the trust could still benefit from its charitable status but would remove the need to obtain Charity Commission consent for disposals, the minutes say.

The London-based housing association Poplar Harca also said it would consider the move but its board had yet to discuss all possibilities.

A spokeswoman for the National Housing Federation, the umbrella body for social landlords, told Third Sector it was a choice for boards to make for themselves, but that the issue would only affect a small number of its members.

Neal Green, senior policy adviser at the Charity Commission, said the regulator was aware some charities were considering making the switch but warned it might be unnecessary.

He said this was because many charities were able to complete self-certification when disposing of assets, to avoid the extra bureaucracy of going through the commission.

"If you are considering taking this step, we would urge you to think carefully before doing so," he said.

He said he appreciated the complying with regulation from the Charity Commission might lead to increased governance costs, but pointed out trustees would have to balance this with "the inevitable and potentially substantial costs" of converting to a CBS.

"Once the changes take effect, most disposals by registered charities that are also registered social housing providers should be eligible for self-certification under the charities act," he said.

"Self-certification is not onerous; it involves taking appropriate professional advice but does not require an order from the commission." 

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