Key information
Request reference number: MGLA200223-0435
Date of response:
Summary of request
Our response
What is the GLAs responsibility to take action where the Capital Funding Guide requirements are breached?
Given that you have ruled that Estuary Housing by not accepting the Royal Institute of Chartered Surveyors (RICS) valuation as final and binding has not broken the Capital Funding Guide requirements, please given a legal reason for your ruling.
Please see our e-mail to you, dated 7 February 2023:
'..In respect to Estuary breaking GLA funding conditions, …, 4.1.51 in Chapter 4 of the
GLA Capital Funding Guide confirms that ‘Initial sales must be based on the full Market
Value of the property which shall be assessed as the price the leasehold interest in the
property would fetch if sold on the open market by a willing seller upon the terms and
conditions contained in the shared ownership lease on the assumption that the leaseholder
would acquire a 100 per cent interest in the lease’. A full market valuation would take account of both parties liabilities (including cladding works and the terms and conditions of the shared ownership lease agreement)…'
Given the above, state all possible reasons under which a housing association do not have to abide by the fundamental clauses and Capital Funding Guide.
The GLA cannot compel a housing association to abide by the capital funding guide, and a
housing can for any number of reasons choose not to. If a housing association does not abide by the Capital Funding Guide, the GLA can take action (see your question 1).
What legal reason did Estuary housing provide the GLA for their not have to abide by the Capital Funding Guide requirement on RICS valuations in regard staircasing?
Estuary have not told us that they are not abiding by the Capital Funding Guide.
5. 4.1.205. of the Capital Funding Guide states Leases containing restrictive staircasing
provisions (other than in programmes mentioned above) will render a scheme ineligible for
grant funding. 4.1.306. The tenant has three months from the date of acceptance to
exchange contracts and a further month in which to complete the purchase. Where the
tenant fails to exchange contracts on the property within this prescribed period the
application may be deemed to be withdrawn.
It is Estuary's written legal position from Devonshire’s solicitors that 'in any event, the
purchase of the Outstanding Share has not taken place within 3 months of the Valuer’s
valuation. Accordingly, the parties are not bound by the Valuer’s determination and we
are not required to sell the Outstanding Share in the Property to yourself for a sum
based upon the Valuer’s determination.'
Although, as far as I know, the GLA has not seen Estuary's legal advice my understanding is that you have some how agreed with it. Therefore can you confirm if you believe that housing associations have the right to refuse staircasing if they simply delay and do not allow it to proceed with in the 3 month period?
If the answer is yes will you begin to retrieve all grant funding from properties that have this clause which is clearly a restrictive staircasing provision?
I regret to advise that this part of your request is being refused under Section 8(1)(c), as your request is not a request for recorded information held by the GLA, your question is seeking for an opinion. Therefore, this email represents as refusal under Section 8(1)(c) of the Freedom of Information Act 2000.
Is it the policy of the GLA to take action against housing associations who try to compel
leaseholders to breach the capital funding guide, specifically in my case Estuary are
demanding that I have a valuation completed on a non full ownership basis rather that a
full valuation as required by the Capital Funding Guide.
Where the GLA refuse to take action against housing association who are not biding by the Capital Funding Guide what rights do individuals have to compel them to do so?
We do not maintain a comprehensive list of the rights of an individual to compel a housing
association to abide by the Capital Funding Guide.
What is the GLA policy in regards to housing associations who commit contract fraud by agreeing to abide the terms of the Capital Funding Guide where they can demonstrably be shown to have policies in place that indicate they have no intention of abiding by the Capital Funding Guide?
If you have any further questions relating to this matter, please contact us, quoting
reference MGLA200223-0435.