Part 1 of the Housing Act 1996 (HA 1996) provides for the registration of social landlords (other than those landlords who are deemed local authorities) by the Welsh Ministers as registered social landlords (RSLs). This compares with England, where bodies that provide social housing are registered with the Homes and Communities Agency under Part 2 of the Housing and Regeneration Act 2008 as private registered providers of social housing. There are both statutory requirements and criteria established by the Welsh Ministers that are relevant when registering as an RSL.
Sections 1A and 2 of HA 1996 set out the eligibility requirements for registration. Section 2(1) provides that a ‘Welsh body’ is eligible for registration as a social landlord if it is:
- a registered charity which is a housing association;
- a registered society within the meaning of the Co-operative and Community Benefit Societies Act 2014 which satisfies the requirements in section 2(2); or
- a company which satisfies the requirements in section 2(2).
A ‘Welsh body’ is defined in section 1A of the HA 1996 as a registered charity whose registered address is in Wales; a registered society whose registered office is in Wales; or a company which has its registered office in Wales.
The requirements for registered societies and companies in section 2(2) are that :
- the body must be principally concerned with Welsh housing (i.e. the housing it owns must be all or mainly in Wales, or its activities must be mainly in respect of Wales).
- the body must be non-profit making, and.
- a purpose of the body must be providing or managing houses for letting, houses for occupation by the body’s members or hostels. In relation to this requirement, the registered society or company is permitted to have other purposes too provided they fall within the categories specified in section 2(4).
The other purposes permitted by section 2(4) are:
- providing land, amenities or services, or providing, or improving buildings, for its residents;
- acquiring, improving, or converting houses for sale, lease or shared ownership;
- constructing houses for shared ownership;
- managing other houses which are let or blocks of flats;
- providing services for owners or occupiers of houses;
- providing advice and services in respect of housing associations.
There are also several Orders, made under section 2 of HA 1996 which specify additional permissible purposes or objects. These Orders are:
- Social Landlords (Permissible Additional Purposes or Objects) Order 1996;
- Social Landlords (Additional Purposes or Objects) Order 1999; and
- Social Landlords (Additional Purposes or Objects) (No 2) Order 1999.
Section 5 of HA 1996 provides that the Welsh Ministers must set (and may from time to time vary) the criteria which should be satisfied by a body seeking registration as a social landlord, and in deciding whether to register the body the Welsh Ministers must have regard to whether those criteria are met. The Welsh Ministers must also establish criteria for removal of bodies from the register. Before setting or varying any criteria the Welsh Ministers are required to consult such bodies representative of RSLs, and such bodies representative of local authorities, as they think fit. Any such criteria must be published.
As RSLs can be charities, companies or registered societies (within the meaning of the Co-operative and Community Benefit Societies Act 2014), sources of funding will differ between organisations, for example charities may receive charitable donations. However, RSLs can also receive social housing grant (SHG) in connection with their housing activities. Section 18 of HA 1996 relates to SHG. The Welsh Ministers can attach conditions to any SHG. Local authorities can also assist RSLs by way of grant, loan or guarantee (in certain circumstances) under section 22(3) of HA 1996.
Section 7 of, and Schedule 1 to, the Housing Act 1996 (HA 1996) deal with restrictions on the making of payments or other benefits to members of a RSL (Part 1 of Schedule 1), constitutional matters (Part 2 of Schedule 1), inspection (Part 3A of Schedule 1), accounts and audit (Part 4 of Schedule 1) and powers under which an inquiry can be made into the affairs of a RSL (Part 5 of Schedule 1). Where it appears to the Welsh Ministers that there has been misconduct or mismanagement and an inquiry is conducted, this can lead to the Welsh Ministers requiring the RSL to transfer its land to another landlord, where appropriate (see paragraphs 20-24 and 27 of Part 5 of Schedule 1).
The Housing (Wales) Measure 2011 introduced a power for the Welsh Ministers to set standards of performance in relation to RSLs to strengthen the powers of the Welsh Ministers in relation to the performance of RSLs. The Measure amended HA 1996 by inserting new sections.
Section 33A of HA 1996 gives the Welsh Ministers the power to set standards of performance for RSLs. These standards may apply to the functions of RSLs relating to the provision of housing or to the governance and financial management of RSLs. When setting standards, the Welsh Ministers must have regard to the desirability of RSLs being free to choose how to provide services and conduct business.
Section 33B of HA 1996 gives power to the Welsh Ministers to issue guidance that relates to a matter addressed by a standard. The Regulatory Framework for Housing Associations Registered in Wales has been published by the Welsh Ministers setting out these standards, known as ‘delivery outcomes’ in the guidance. The Regulatory Framework can be found here.
Section 33B also provides that in considering whether standards have been met by RSLs, the Welsh Ministers may have regard to the guidance. The Welsh Ministers must make arrangements for bringing the guidance to the attention of RSLs.
Section 33C of HA 1996 provides that before issuing guidance under section 33B, the Welsh Ministers must consult one or more bodies appearing to them to represent the interests of RSLs, one or more bodies appearing to them to represent the interests of tenants, and one or more bodies appearing to them to represent the interests of local housing authorities.
Sections 50A to 50V of HA 1996 set out the Welsh Ministers’ enforcement powers where financial or management standards have not been met. Where such standards have not been met the Welsh Ministers may serve an enforcement notice on the RSL requiring it to take action to remedy its failings. The RSL has a right to appeal to the High Court. The Welsh Ministers may impose a penalty on the RSL if they are satisfied certain grounds are met, or require the RSL to pay compensation. Also, in cases of severe mismanagement the Welsh Ministers have powers to require an RSL to transfer its management functions (see paragraphs 15B to 15G of Schedule 1 to HA 1996).
The Welsh Ministers also have certain functions and powers where an RSL is facing insolvency. Sections 39 to 50 of HA 1996 are relevant. Before certain steps are taken in relation to insolvency the Welsh Ministers must be given notice of those steps. In addition, as soon as possible after certain steps are taken notice also needs to be given to the Welsh Ministers. Once certain steps have been taken there is a moratorium on the disposal of land by the RSL. The moratorium will last 28 days from the date that notice is received by the Welsh Ministers. This moratorium can be extended with the agreement of all the secured creditors. The Welsh Ministers can also give consent in relation to the disposal of land.
The Welsh Ministers can make proposals about how the RSL is going to be managed which, once agreed with the secured creditors, will be binding on the Welsh Ministers, the landlord, all of the RSL’s creditors and any liquidator, administrator or equivalent. The Welsh Ministers can appoint an interim manager, pending agreement of any proposals, and can appoint a manager to carry out such proposals once agreed. In addition, the Welsh Ministers can provide such financial assistance as they think appropriate.
Consent for disposal of land
RSLs are also regulated in the sense that they require the Welsh Ministers’ consent to dispose of land in certain circumstances. The power of an RSL to dispose of land is set out in section 8 of HA 1996. The Welsh Ministers’ consent is required for certain disposals under section 9 of that Act, and the Welsh Ministers may issue general consent which applies in certain specified circumstances. The General Consents (Wales) Order 2009 sets out the circumstances in which the consent of the Welsh Ministers has been given, this is attached to circular RSL 29/09. In most other circumstances the consent of the Welsh Ministers will be required on a case by case basis (section 11 of HA 1996 sets out where Welsh Ministers’ consent is not required).
Public law challenge
The decisions of public bodies are subject to public law challenge by way of judicial review. Whilst local authorities are public bodies and so subject to judicial review, the status of RSLs is not as clear cut. The Court of Appeal considered whether the decision of an RSL to terminate a tenancy was an act of a public nature which would render the RSL a public authority, and therefore, amenable to judicial review in the case of R (on the application of Weaver) v London & Quadrant Housing Trust  EXCA Civ 587. It was conceded that some of the functions of the landlord were public functions, and subsequently decided that the act of terminating the tenancy was within the remit of section 6(5) of the Human Rights Act 1998 and therefore the decision was amenable to judicial review. However, it should be noted that the Court stated that not every RSL would necessarily be deemed a public authority, it would depend on the facts of each case.
It should also be noted that the Public Services Ombudsman for Wales considers complaints in respect of local authorities and RSLs.