3  Grant Claims and Payment

3.1  General

3.1.1  RSLs must not claim Grant: 

1. if they do not have a secure legal interest in the property;
2. in advance of need i.e
   a. when the RSL has not entered into the commitment for which the Grant payment is intended OR
   b. even though contractually committed, the RSL does not yet have to make payments;
3. before the relevant Payment Milestone has been achieved;

For Guidance on “a secure legal interest in the property” click on the asterisk.  

 

3.1.2 Under the Investment Partnering route grant can be paid via the Lead Partner to other RSLs within the partnerships. In this case, the Lead Partner is simply a conduit for payment and not a grant recipient.  Lead Partners do not, therefore, need an interest in the site to enable this transaction.

3.2  Bank Details

3.2.1  When the RSL receives Grant from the Agency for the first time, the RSL must provide details of the bank account to be credited, and notify any subsequent change of bank or account details. Why? Click on the asterisk.  

 

3.2.2  The RSL must provide in writing the following information on headed notepaper, signed by the Secretary and two members of the Committee Members and sent, with a copy of the bank mandate, to the Finance Division of the Agency:

• Bank name;
• Bank branch/address;
• Bank sort code;
• Bank account number;
• Bank account name.

3.2.3  All RSL claims for payment of SHG must be submitted via the Internet using the Agency’s Programme Investment Management System (PIMS).  PIMS guidance documents are on the Agency’s PIMS web site - www.housingcorp-online.org

 
3.3  General Procedural Requirements

3.3.1  At the point of claiming Grant RSLs must confirm:

1. that the application for Grant payment is correct and conforms with the Funding Conditions as accepted by them at the beginning of the financial year plus any further conditions issued by the Homes and Communities Agency in year (if the RSL is unable to confirm this, the application for Grant payment will be rejected);
2. acceptance of the certifications that appear on the screen when the scheme has been submitted;
3. the Regional Investment Team has been notified of any change that has occurred to the scheme since Bid stage;
4.  the RSL has (or will have) good title in the property;
5. (for Off the Shelf  & HOLD schemes)  all necessary consents have been obtained prior to exchange of contract.

3.3.2  In the case of Off the Shelf & HOLD schemes, the single tranche of SHG can be claimed after exchange of purchase contracts.  For this purpose Off the Shelf means the purchase of a fully developed and existing property.

3.3.3  RSLs will need to obtain approval from the Regional Investment Team for any scheme variation, including changes to milestone dates.
  
3.3.4  For schemes that fail to reach completion, RSLs must contact the Regional Investment Team, see the Recovery Chapter.

3.3.5  The Regional Investment Team will check that all comments made on IMS for any variations from the bid stage are consistent with what has been previously agreed by the Regional Investment Team for that scheme.
  
3.3.6  The Corporation may terminate a scheme  and Recover any Grant paid on the scheme where:

• the scheme no longer meets a strategic need and
• the scheme no longer offers value for money and
•  the RSL has not previously told the Regional Investment Team of the changes, even if the changes are not fundamental.

 
3.4  Start on Site Claim   

3.4.1  The trigger for claiming Grant at  Start on Site is the date of the start on site of the main contract works. This is deemed to be the date when the contractor takes possession of the site/property AND both parties have signed the  main building contract. For further Guidance  see sub section 3.5 below.
 
3.4.2  The amount of SHG payable at Start on Site will be set out on the relevant payments screen of IMS.
 
3.4.3 Where the Start on Site SHG tranche has been drawn down too soon the RSL may be charged interest for the period between the date when the tranche was received by the RSL and two weeks after the correct closing date for start on site. In such cases the RSL must notify the Regional Investment Team.

3.5 Start on Site – Grey Areas

3.5.1 Building Licence / Agreement to Lease or Buy
 
Where the RSL wishes to start building works on land that it does not yet own, it must demonstrate that it has a secure legal interest in the property for Grant to be payable. Specifically it must:

• ensure there is a legally binding agreement that the legal interest in the property will be transferred to the RSL immediately or within a reasonable timescale following completion of the development;
• seek legal advice to ensure they have sufficient security to proceed; 
• be aware that if the scheme fails to complete, or the legal interest is not transferred to them, the Agency will recover any Grant paid.

3.5.2 In addition to the Requirements on obtaining a secure legal interest in the property, the RSL must not claim Grant in advance of need i.e:

1. when the RSL has not entered into the commitment for which the Grant payment is intended OR
2. even though contractually committed, the RSL does not yet have to make payments

3.5.3 Golden Brick schemes 
 
For an explanation of “Golden Brick” click on the asterisk.  

 

3.5.4 4  RSLs can normally only claim Grant when work has progressed from Golden Brick level onwards, so long as they also satisfy the conditions about secure legal interest and having signed the contract set out above.  Further detail of when a start on site claim may be made under Golden Brick arrangements is contained at 3.5.3 above.

3.5.5 RSL's must confirm the date when they completed on the purchase of the land under the Golden Brick arrangement.  Grant is not normally claimable prior to that date.

3.5.6  For some Guidance on scenarios where Grant is not claimable click on the asterisk.  
 

3.6 Final (Practical Completion) Claim

3.6.1 For SHG purposes,  Practical Completion  is when the last dwelling is handed over even though external works such as landscaping may remain to be completed.

The claim can be submitted against the issue of a certificate of Partial Completion provided all of the dwellings in the scheme, or phase, have been handed over.
 
Where a Partnering Programme Agreement has been signed, the claim can be submitted after the date that scheme completion is confirmed in writing or by confirmation notice issued from the client or the client’s representative.
 
3.6.2  The RSL must input the following data in to the Corporation’s Investment Management System (IMS), based upon the RSL’s forecast final costs (see IMS guidance):

• rents and service charges, setting out any details that have changed since Grant Confirmation stage (not required for Reimprovements, Rehabilitation Works Only, RSI3 and City Challenge schemes);
•  costs at Practical Completion;
•  Final Cost calculation of SHG;
• actual on-costs (fees, interest, minor works, insurance/bonds etc).

3.6.3  At the point of claiming SHG 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.
 
3.6.4  Rents to be charged are referred to in the Funding Conditions. Rents at Practical Completion must be equal to or less than those agreed between RSLs and Regional Investment Teams at confirmation of agreement stage.

3.7  Social HomeBuy 

3.7.1  Following legal completion the Agency makes the PG payment to the RSL. There will be one payment of PG, based on the discount available to the purchaser at Initial Sale stage.
 
3.7.2   The RSL must claim Grant within 10 working days from the date of legal completion.  The RSL can only apply for the single tranche of PG after the legal completion of the sale. 
 
3.7.3  The HCA will pay the PG for each sold property when the RSL confirms that legal completion has taken place.
 
3.7.4  For details on RTA issues refer to the RTA chapter.

3.8 Key Worker Living 

3.8.1 Open Market HomeBuy:

The total amount of Grant payable to the HomeBuy Agent will be the Grant to the key worker plus the agreed administrative fee. The Agency must agree changes in the allocation of funding between financial years. Grant will not be paid until a key worker completes the purchase of a property acquired through Open Market HomeBuy.

3.8.2 New Build HomeBuy and Intermediate Rent:

Grant payment is in two tranches, start on site (60%) and final cost (40%).

3.9  Payment  

3.9.1 The Agency will pay Grant within 8 days of the claim being approved for payment:

3.9.2 The Agency will compensate the RSL for any late Grant payment that is the sole responsibility of the Homes and Communities Agency. The compensation will be for any interest charges suffered or for any potential loss of interest that would have been earned by the RSL.  It is payable upon receipt of a claim from the RSL supported by evidence that such loss has been incurred. The claim can be in the form of a letter addressed to the Finance Department containing an explanation of the amount of the loss, how it has been incurred together with relevant calculations.

3.9.3 The interest rate payable will be at the maximum of the Bank of England base rate plus 4%.