Social Homebuy 04

1 GENERAL

 
1.1 Following legal completion the Corporation makes the PG payment to the RSL. There will be one payment of PG, based on the discount available to the purchaser in respect of the share purchased.  The share purchased should be between 25% and 100% of the market value.  The discount payable is based on the RTA discount applicable to that location pro-rata to the initial share purchased and is only available respect of the initial purchase. 

 
2 TIMING OF PG CLAIM

2.1 PG cannot be claimed in advance of need nor before disposal. 
 
2.2 The RSL can only apply for the single tranche of PG after the legal completion   of the sale. The HC will pay the PG for each sold property when the RSL    confirms that legal completion has taken place.
 
2.3  After the sale of the property has been completed, the RSL  will be in a    position to make a submission for combined confirmation of grant  and    payment of the discount amount current at legal completion. Entering the    details of the legal completion of the sale together with the required data will   trigger a request for payment. This information should be submitted    within 10 days of the date of sale. 
 
2.4 At the point of claiming PG the RSL must confirm that the application for   Grant payment is correct and conforms with the Funding Conditions as  accepted by the RSL at the beginning of the financial year.
 
2.5 All RSL applications for Confirmation of grant   and claims for payment of SHB purchase grant must be submitted via the internet using the Corporation’s Investment Management System (IMS).  See www.housingcorp-online.org for guidance on IMS
 
2.6 The RSL should determine its estimated receipts and final costs, together with  confirmation of the agreed rents and service charges at the point of exchange  of contracts for the sale for each dwelling as this information will be required  to complete the DPF return that will be initiated at confirmation of grant   and  payment stage. 
 
2.7 The Corporation will pay PG, upon receipt of a correct and accurate claim  following legal completion, within 8 working days provided the claim is  within the RSL’s agreed programme allocation.
 
2.8  The RSL must be able to confirm acceptance of the three certifications that appear on screen when the scheme has been submitted.
 
2.9 It is in the RSL’s interest to submit its PG claim as soon as possible after the key event.
 
 

3 CHECKLIST FOR SCHEMES
 

3.1 Confirmation of grant and payment submission following legal completion of the sale

1. Can the RSL programme allocation accommodate the scheme? If ‘yes’ go to 9, if ‘no’ go to 2.
2. RSL requests the Corporation to action a programme allocation change for the scheme. Are changes acceptable? If ‘yes’ go to 3, if ‘no’ go to 4.
3. Corporation agrees to RSL’s request to programme allocation change on IMS. RSL may now submit the scheme. Go to 9.
4. Corporation reverts the programme allocation back to a bid. Go to 5.
5. RSL consults with the Corporation on what would be acceptable for a revised bid submission. Go to 6.
6. RSL submits the revised bid at Corporation’s request. Go to 7.
7. Corporation approves the agreed revised bid and transfers as an allocation. Go to 8.
8. RSL submits scheme submission for Confirmation of grant   and payment which can now be Allocation Matched. Go to 9.
9. 9. Corporation approves the submission and issues Confirmation of grant   and payment approval.

 
4 INTEREST ON DELAYED PAYMENT OF CLAIMS

 
4.1 The Corporation will compensate the RSL with an interest payment on the delayed payment of a PG claim only for that part of the delay due solely to the Corporation.
 
4.2 Interest to cover delays in payment will only be paid in exceptional circumstances and where the RSL can demonstrate it has suffered a direct financial loss as a result of that delay.
 
4.3 Any claim for such interest must be made after the payment of PG to which it relates. The RSL should submit a claim substantiated with appropriate documentation, e.g. the breakdown of the calculation and evidence of the interest rate.
 
4.4 There is no timetable for the payment of claims for interest however the Corporation will endeavour to make payments as quickly as possible.

 
5 SUPPORTING DOCUMENTATION
 

5.1 The RSL must retain on file the following for Compliance Audit purposes.  See General 09:
 

• solicitors’ letter confirming that the purchase has been completed and setting out the sum paid and date of
• a property schedule showing addresses, floor areas, and valuations  for the completed properties, together with actual rents and HB eligible service charges. This is populated by valuation and rents so is useful.

 
6 ADMISSIBLE DEDUCTIONS FROM INITIAL SALES PROCEEDS

 
6.1 For initial SHB sales (regardless of the % share being bought - which could range from 25% to 100%) RSLs will follow the existing DPF policy guidelines (DPF-1 section 2). The SHB allowance on initial sale, which mirrors that for Shared Ownership, consists of two figures one for houses and one for flats, the allowance is higher for flats as there are often additional leasehold/freehold issues to be resolved. The admissible deductions from the proceeds of a SHB sale are summarised below:

• attributable loan debt;
• valuation fee;
• legal fees;
• survey fees (flats only);
• SHB allowance;
• Other elements as may be specified by the HC.

 
The balance is accounted for in the RSL’s Disposal Proceeds Fund.

 
6.2 Refer to the Disposal Proceeds Fund (DPF) chapter of this guide for full details  of these items and how to deal with the cost of abortive sales.

 
7  ADMISSIBLE DEDUCTIONS FROM STAIRCASING PROCEEDS

 
7.1 Where an initial sale is less than a 100%, and the Social Homebuy purchaser  purchases further shares, a similar approach as used for Traditional Shared  Ownership is adopted, whereby RSLs are able to deduct an allowance to cover  their legal and admin costs in relation to sales of further shares. The SHB  allowance to be deducted from the proceeds of staircasing sales will be a  standard rate equivalent to the initial sales allowance for a house regardless of  whether the property is a house or flat. 
 
7.2 The sale proceeds less the admissible deductions ascribed to the DPF must not be below the applicable proportion of a Valid Valuation by an Independent Qualified Valuer.  The eligible deductions from the sale proceeds are the Deemed Loan Debt outstanding (if insufficient were recoverable from the initial receipt) and the Staircasing Allowance.  The valuation must be paid for by the prospective purchaser.  If the net sales proceeds are insufficient to enable the recovery of all the attributable deemed loan debt, then the shortfall can be deferred.
 
7.3 When the property is subsequently staircased to outright ownership, and it is   still not possible to discharge the deemed loan debt attributable to that     dwelling the final shortfall will be written off.