Dcc sale of flats presentation 20101[1]

On behalf ofOPENING THE DOOR TO BETTER HOMES

Sale of Flats Scheme

PATHS INTO SUSTAINABILITY THROUGH HOME OWNERSHIP

Evelyn Hanlon

Housing & Residential Services

Dec 2010

OPENING THE DOOR TO BETTER HOMES

Sale of Flats - Overview

Commencement order expected early 2011

Focus is on achieving social mix through tenure diversity -

stock retention is important but so is social sustainability.

Not “Right-to-Buy” it provides Council with system for

selling in schemes which Council approve. Reserved Function

Uptake will be affected by price & income, loan availability

and which units can be sold

Sale of flats has financial implications for DCC initial cash

injection but thereafter reduction in rent charge as better off

on higher rents purchase.

PATHS INTO SUSTAINABILITY THROUGH HOME OWNERSHIP Evelyn Hanlon



Sale of flats will affect net housing income:

– Reduced weekly rent charge

– Some decrease in landlord costs

– Income from service charges from purchasers

– Capital receipts and clearing of arrears in year one.

Sales will reduce casual vacancies; typically flats were handed

back more often because there was no right to buy.

People who have serious arrears including those on which NQ

have been served won’t be entitled to purchase.

Issues




As owners become a majority (or significant minority) they will want to decide how their common areas are managed.

Quality & cost will of service charges will decide whether they will change to different provider/managing agent.

DCC have opportunity to remain as agent and to compete for mixed tenure schemes.

We could also offer landlord maintenance services to former tenants and other landlords. This would be in line with Supporting Effective Private Housing Market DOEHLG, Building Sustainable Communities Dec 2005.

Agency Services




2011 Regulations

Housing authority may designate a flat complex for sale if satisfied that this would be consistent with good estate management :

Scheme is in a suitable condition, design, affordable cost of management & maintenance

Scheme is in good structural condition (works within last 10 years or structural survey within last 5 years showing it is in good structural condition.

There are no redevelopment/regeneration planned

Good marketable title exists

Scheme is not in excluded class as set out by Minister e.g. senior citizen/special needs, mixed use, Part V

Tenants willing to act as directors in Management Company




Regulations 2011 (contd)Draft proposal for each complex to be designated showing arrangements for: Tenant plebiscite within 3 months of adoption by Councillors Vesting of common areas Sale of apartments to tenants Common area management & maintenance Sinking fund requirement

Reserved Function - Members can refuse, adopt or modify proposal

to designate a complex for sale

A complex may only be designated when and if:

65% of tenants vote in favour in the plebiscite (tenants can only vote at the time of the plebiscite) Only current/valid tenants

Required number of tenant/purchasers are willing to act as directors (3-10 directors)




Purchaser: money issues Sale Price: Not yet agreed by DOEHLG

Sinking fund – established from day one and Council to set aside

percentage of capital receipts for future structural works

Service Charge

Determined by Council for first few years until required percentage of owner occupation achieved

Proposal to set out clearly service charge and its basis in budget

Service Charge will be paid on basis of size of unit

Communal areas including estate offices and community rooms to be excluded from contributing to service charge

Council will pay service charge for its units




Legal Issues

Management company established just before first sales are finalised – everything in place but not incorporated until the Company is needed

Firsts members and directors need to be in place; some will be local authority (councillors/staff)

All property (flats /common areas) vested in management co. Flats leased back to Council who will sell/rent units as required

Areas which can logically remain in public control e.g. footpaths, extensive green areas, sewers etc will not be vested in management company in order to keep service charges and sinking funds affordable.

Tenants only can vote in plebisite, one vote per flat and no vote for people who are not tenants because of notices to quit etc.




Right to Sell Flats

246 different schemes listed in rent file (over 10,000 units)

Not all schemes will be for sale some will be:

– affected by regeneration

– Awaiting PIP works

– Part V / Special Needs / Mixed Use

Approx 96 schemes with 1000 tenants likely to be included

in sales scheme.




Sustainability

Social sustainability is as important as stock retention but

inescapable conclusion - some stock should not be sold.

housing estates have become socially sustainable following

action of housing market e.g. Cabra, Drimnagh. Fatima, O

Devaney same people but not same level of sustainability.

Some units should not be sold: Part V “buys in” flats in areas

with good social mix already;

Sale of Flats should be seen as opportunity to increase

sustainability in flat schemes through action of the housing

market and people’s desire for home ownership even with the

economic downturn



Dcc sale of flats presentation 20101[1]

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