Registered social landlords

All social landlords (other than those landlords who are deemed local authorities) in Wales must be registered with the Welsh Ministers. These are commonly known as Registered Social Landlords (RSLs).  

Part 1 of the Housing Act 1996 (“the HA 1996”) provides for the registration of RSLs. To be eligible for registration a social landlord must be:  

1. A registered charity which is a housing association; 
2. A society that is registered under the Co-operative and Community Benefit Societies Act 2014 and which satisfy the requirements in section 2(2) of the HA 1996; or 
3. A company that satisfies certain conditions as set out in section 2(2) of the HA 1996.

 Section 2(1) of the HA 1996 provides that a ‘Welsh body’ is eligible for registration as a social landlord if it is:

• 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: 

• 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. When 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.

Finance 

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. 

General 

Section 7 of, and Schedule 1 to, the Housing Act 1996 (HA 1996) deal with the following:

1. Making of payments or other benefits to members of a RSL (Part 1 of Schedule 1)
2. Constitutional matters (Part 2 of Schedule 1),
3. Inspection (Part 3A of Schedule 1),
4. Accounts and audit (Part 4 of Schedule 1):.and
5. Powers under which an inquiry can be made into the affairs of a RSL (Part 5 of Schedule 1). 

Additionally 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). 

Schedule 1 to the Housing Act 1996 was amended by the Regulation of Registered Social Landlords (Wales) Act 2018, the effect of which is that RSLs are no longer required to obtain the Welsh Ministers’ consent before making constitutional changes, amalgamations and other structural changes, and are instead required to notify the Welsh Ministers of such changes. 
  
Additional effects of the amendments made are enhanced enforcement powers for the Welsh Ministers and reduced influence on the boards of the RSLs for local authorities.

Standards

The Housing (Wales) Measure 2011 introduced a power for the Welsh Ministers to set standards of performance in relation to RSLs. This was introduced to strengthen the Welsh Minister’s  powers in relation to the performance of RSLs. This amended the HA 1996 by inserting the following new sections:

1. 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. 
2. 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.3. 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 are obliged to bring the guidance to the attention of RSLs.4. 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. 

Enforcement 

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). 

Insolvency 

The Welsh Ministers also have certain functions and powers where an RSL is facing insolvency (see sections 39 to 50 of HA 1996). Before certain steps are taken in relation to insolvency, the Welsh Ministers must be given notice of those steps by the petitioner In addition, as soon as possible after those steps are taken notice also needs to be provided to the Welsh Ministers by the petitioner. Once certain steps have been taken, there is a moratorium on the disposal of land held 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 a 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 

The Registered Social Landlords (Wales) Act 2018 (“the 2018 Act”) provides that disposals of land made by RLSs will no longer require the Welsh Minister’s consent. RSLs will only need to notify the Welsh Ministers in respect of disposals of dwellings and disposal by leases if they fall within the definition of a relevant disposal. 

Under the 2018 Act the need for Welsh Ministers' consent to certain disposals under section 171D Housing Act 1985, sections 81 and 133 of the Housing Act 1985 and section 9 of the HA 1996 has been removed.

Notifications are not required for, non-residential property and for land unless it is appurtenant to a dwelling.

The consent of the Welsh Ministers will still be required on disposals which took place before 15 August 2018.

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 therefore subject to judicial review, the status of RSLs is not as clear cut.  

In the case of R (on the application of Weaver) v London & Quadrant Housing Trust [2009] EXCA Civ 587, 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. 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. 

The Public Services Ombudsman for Wales considers complaints in respect of local authorities and RSLs.