Part 1 ITEM NO.

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REPORT OF STRATEGIC DIRECTOR FOR SUSTAINABLE REGENERATION ______

TO THE LEAD MEMBER FOR HOUSING ON 20 SEPTEMBER 2010 ______

TITLE: SALFORD CITY COUNCIL RIGHT OF FIRST REFUSAL POLICY 2010 ______

RECOMMENDATION:

That Lead Member approves the Right of First Refusal Policy 2010. ______

EXECUTIVE SUMMARY:

The Housing Act 2004 states that tenants who have purchased their home under the Right to Buy and wish to sell it within 10 years, are required to offer it initially to the Council or another social landlord for re-purchase at full market value.

The market value must be agreed between the two parties and if this cannot be agreed this will be determined by the District Valuer. If an offer to re-purchase a former Council property has not been accepted within 8 weeks, the owner is entitled to sell the property on the open market.

This requirement is termed the “Right of First Refusal”.

The Right of First Refusal Policy and Procedure explains the circumstances that may influence the Council’s decision on whether to purchase or to nominate another Housing Partner to consider buying back such a property through Right of First Refusal and the process for dealing with those requests.

The policy has been drafted in Plain English as far as possible. ______

BACKGROUND DOCUMENTS:

Housing Strategy 2008-11 (Available for public inspection) ______

KEY DECISION: YES DETAILS:

1 Right of First Refusal (Buy Back)

1.1 All properties (freehold and leasehold) sold under the RTB since 18th January 2005 contain a covenant which requires the owner, if the property is offered for sale within ten years of the original purchase, to offer the property back to the Council. This is known as the Right of First Refusal. There is nothing which compels the Council to buy back properties offered to it in this way. However, the Council is required to give consideration to the option of buying back a property. This will apply to properties across the City.

1.2 The policy sets out the factors the Council will take into account when deciding whether to buy back a property when offered by the ex-Council tenant. These include:

a) Capital funds available; b) Housing need and demand established for the type of property being offered and in the area where the property is located; c) Additional costs for any refurbishment work is minimal, i.e. to bring the property up to the Decent Homes Standard; and d) That the purchase represents value for money.

1.3 The Council can nominate a Housing Association to buy the property, and the Council may therefore consult with Housing Association Partners to see whether there is any interest to purchase any property being offered.

1.4 The appropriate Head of Service with responsibility for Strategic Housing will have delegated authority to decide whether the property meets the policy criteria and will follow the Council’s financial regulations in determining whether further approval is required by appropriate Officers or the Lead Member for Housing.

2 Appeals against decisions made

2.1 An appeals procedure will operate for all decisions made in line with the policy. Appeals will be considered where additional information is provided to support the application or where there is a material change of circumstances.

2.2 The appeal must clearly state the grounds for the appeal and a detailed case must be submitted, explaining why the decision is being challenged. Clear and objective evidence should be submitted.

2.3 The letter of appeal and a summary of the original application will be submitted to the Director of Sustainable Regeneration for final consideration together with the initial assessment of the information provided and reason for its original decision.

See Annex 1 Right of First Refusal Policy ______KEY COUNCIL POLICIES: Right to Buy Policy ______

EQUALITY IMPACT ASSESSMENT AND IMPLICATIONS:

A Community Impact Assessment (CIA) was completed in 2010 and concluded that the decision for a Council to seek to exercise its powers in relation to Right of First Refusal is based upon a number of factors including: financial, regeneration, the property itself. The composition of the household including; ethnicity, age, sexual orientation, have no bearing upon the decision and indeed are not required by the government legislation covering Right of First Refusal, but monitoring information will be sought. ______

ASSESSMENT OF RISK: Low

The policy has been developed with a number of internal and external stakeholders. Internal stakeholders include: Finance, Legal, Salix Homes, Housing Connections, Market Support and Strategy and Enabling Team. External stakeholders include: Contour, City West and Great Places Housing Associations and Salford Citizens Advice Bureau. This consultation will ensure that the policy and procedure are fit for purpose. Furthermore, the policy will be regularly reviewed to ensure that issues are identified and where necessary, actions are undertaken to address them. ______

SOURCE OF FUNDING:

Administering this policy is a legislative requirement and will be borne through existing Council officer time. If the Council exercises its right under the legislation, the Council will either nominate a Housing Partner who will fund the purchase or in limited circumstances the Council will use existing funding to purchase the homes. ______

LEGAL IMPLICATIONS

Supplied by Norman Perry: Ext: 3084

The policy and procedure will enable the Council to comply with its statutory obligations under the Housing Act 2004 in relation to its right of first refusal

FINANCIAL IMPLICATIONS

Supplied by Steve Bayley: Ext: 2584

There are no direct financial implications arising from the policy itself, although the Council’s ability to fund buy-backs is likely to be severely limited going forward due to unprecedented pressures on public finances. ______OTHER DIRECTORATES CONSULTED: A working group was set up in order to develop the policy and procedure and included representatives from other sections including Salix Homes and other key stakeholders and partners. ______

CONTACT OFFICER: TEL. NO.

Mark Hart 0161 793 2039 ______

WARD(S) TO WHICH REPORT RELATE(S):

All ______Annex 1

Right of First Refusal Policy

Salford City Council

1 1. SUMMARY

1.1 The Housing Act 2004 states that anyone who received their offer notice for Right to Buy after 18th January 2005 and wants to sell their home within the first 10 years of purchase must give Right of First Refusal to their former landlord (in this case Salford City Council).

1.2 This policy explains the circumstances that may influence the Councils decision whether or not to purchase or to nominate another Housing Partner to buy back such a property through the Right of First Refusal and the process for dealing with requests. The policy has been drafted in Plain English as far as possible.

2. Introduction

2.1 The Council has a Duty to have First Right of Refusal for any home purchased through Right to Buy after 18th January 2005. This Duty will apply for ten years after the purchase date of the home. This means that if your home was purchased through Right to Buy after this date, then you will need to offer it to the Council before offering to sell to anybody else.

3. What You Need to Do

3.1 If you, the applicant are bound by the Right of First Refusal, the Government rules say that you must send an “Offer Notice” or letter to the Council stating the following:

 That you wish to dispose of the property,  That there is a covenant requiring you to first offer the property back to the council,  Give the property’s full postal address,  State the property type (house, flat etc…),  Specify the number of bedrooms,  Give details of heating system; and  Specify any improvements or structural changes which have been made since the purchase (inc adaptations).

3.2 This “Offer Notice” needs to be sent to the following address:

Law and Administration Customer and Support Services Salford Civic Centre Chorley Road Swinton Salford M27 5DA.

Tel: 0161 793 2706. Fax: 0161 794 6595.

2 4. What Happens next?

4.1 When the Council receive your “Offer Notice” it will write to you confirming receipt. The Council will then have eight weeks in which to assess the Right of First Refusal on the property and reply to you confirming if it will a) buy the property, b) nominate another Housing Partner to buy the property; or c) not purchase the property. This letter will inform you of the process and the next steps - shown below:

4.2 If the letter confirms a) or b) then the Council or Housing Partner will buy back the home within an additional 12 weeks of the date of the letter, with any Discount monies owed being repaid to the Council. If the Council or Housing Partner does not complete the contract for sale within 12 weeks you can sell your home on the open market, with any Discount monies being repaid to the Council. This means that the process will be completed within 20 weeks of receipt of the initial “Offer Notice” letter by the Council.

4.3 If the Council or Housing Partner does not wish to purchase your property, then you are free to sell the property on the open market and the rules of Right of First Refusal will no longer apply. This means that whoever buys the property it does not have to offer the property back to the Council when they come to sell it. However, any Council discounts that are applicable will need to be paid back to the Council. See Discount Waiver Policy for details. If after 12 months, you have still not sold your property and you still wish to, a fresh “Offer Notice” to the Council must be made in writing.

5. Customer Satisfaction and Reviews

5.1 Once you have been contacted with the outcome of the decision, the Council will send a customer satisfaction letter to you, to give you the opportunity to comment upon your experiences of the Right of First Refusal. This will help make sure that this policy is put into practice and is effective, fair and consistent for all customers. Feedback will be used to inform an annual review of the Policy.

6. Appeals

6.1 Any appeal must be lodged in writing within 28 working days of receipt of the decision letter. Appeals should be sent to:

Right of First Refusal Appeal Strategy and Enabling Team Sustainable Regeneration Salford Civic Centre Chorley Road Swinton M27 5BY.

3 6.2 The appeal must clearly state the grounds for the appeal and a detailed case must be submitted, explaining why the decision is being challenged. Clear and objective evidence should be submitted.

6.3 The letter of appeal and a summary of the original application will be submitted to the Director of Sustainable Regeneration for final consideration together with the initial assessment of the information provided and reason for its original decision.

6.4 The decision of the Director Sustainable Regeneration on the current application is final.

6.5 If an appeal is rejected this does not prevent a re-application based on changed circumstances or further sufficient evidence.

6.6 If you still feel that your complaints or queries have not been sufficiently addressed you are entitled to contact the Housing Ombudsman at:

Housing Ombudsman Service 81 Aldwych London WC2B 4HN.

Tel: 020 7421 3800 Fax: 020 7831 1942 Email: [email protected]

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