2 Relevant Events  

2.1 General

2.1.1 Grant is Recoverable when a Relevant Event occurs. Typically this is the sale of a rented property, or a shared owner staircasing, but can also be the failure to complete the development of a scheme, a change in use of a completed scheme, the sale of undeveloped land or property and other specified situations.

For some Guidance on the terms “Recovery” follow the asterisk.  

 

2.1.2 The term "Relevant Event" comes from the Capital Grant Recovery Determination, and must be read in this Section to mean Relevant Events as defined in that Determination.. The term does not refer to milestones, or other "Relevant Events" described in other guidance or contract arrangements (such as JCT contracts).

2.1.3 Depending upon which Relevant Event has triggered Grant Recovery, RSLs will either have to Repay Grant to the Agency, or will have the option of either Repaying the Grant to the Agency, or Recycling it into new schemes through their Recycled Capital Grants Fund , see  RCGF.  

2.2 The Relevant Events

2.2.1 The Relevant Events are defined at clause (7) of the Recovery Determination

2.2.2 When a Relevant Event occurs to land or Property provided with the aid of RCGF, the principles within the Determination (and detailed in this Guide), apply equally to the Recovery and Repayment or re-use of that Grant.

2.2.3 When a Relevant Event occurs the RSL must check if it is one which requires them to Repay the Grant directly to the Agency, or whether they have the option of crediting the Grant to the RCGF. For a list of the Relevant Events that mean that the RSL must Repay the Grant straightaway follow the asterisk.  

 

2.3 Repayment & Recycling Timetables

2.3.1 When a Relevant Event occurs and the Recoverable Capital Grant is to be paid to the Agency, the appropriate form must be sent to the Regional Investment Team responsible for the area in which the Property is situated, within 14 days of:

• the Agency notifying the RSL in writing that one of the Relevant Events (a) to (f) in (7) of the Recovery Determination has occurred (for Repayment within the context of programme management see the immediately following paragraph) or
• the date of completion when a Property is disposed of by sale or transfer or
• the date when demolition started, where a capital receipt is received or
• the date when the Property ceased to be used for a purpose eligible for Capital Grant, or when it ceases to be used for Supported Housing when its use is to change to general needs or
• the receipt of compensation by the RSL where a Property is disposed of under a Compulsory Purchase Order or
• the date the Dwelling is sold by a former tenant who received a discount and all or part of a discount is repayable (i.e. applicable to Right To Buy sales).

The Agency will then raise an invoice, stating the terms and schedule for payment. RSLs should not forward a payment in advance of receiving an invoice.

2.3.2 Where an RSL fails to meet a scheme milestone by the date specified, re-forecasting is not accepted and an acceptable replacement scheme is not available, the Agency will require Repayment of Capital Grant already paid (under Para 7b) of the Recovery Determination, the scheme has been cancelled).  In this case the Agency will issue the RSL with an invoice for the amount to be Recovered. 
 
2.3.4 If the RSL opts to credit the Recoverable Capital Grant to its Recycled Capital Grant Fund (as detailed in this chapter), the effective date of the credit is the date of the Relevant Event.

2.4 Interest Chargeable on Delayed Notification or Repayment

2.4.1 Where the RSL is required to notify the Agency of a Relevant Event and that notification is not received by the appropriate deadline, as set out in paragraph 2.3, the Agency will normally add interest to the amount of Capital Grant Recovered.  For the period between the deadline (i.e. the 15th day following the Relevant Event) and the date of receipt of the notification, the Agency will normally charge interest at the same rate as for late payment of invoices, and interest will accrue daily, with six monthly compounding from the start date for payment.  
 
2.4.2 For the purposes of charging interest following delayed notification, the date of the Relevant Event will be determined by the Agency, on the basis of paragraph (7) of the Recovery Determination.  For events (a), (d) and (e) this will normally be the date of the missed milestone or the milestone on which delivery was non-compliant.  For events (b), (c) and (f) this will normally be the date at which the RSL notifies the Agency of the Relevant Event.
 
2.4.3 Interest will not be charged if the Agency has been informed in writing of a likely delay and has agreed in writing that the circumstances do not justify the charging of interest for a particular period.  When some Supporting Documentation is not available, the RSL can avoid interest by paying the whole of the Recovered Grant to the Agency.
 
2.4.4 The Agency will charge additional interest if the invoice for payment of Capital Grant, or interest due to late notification, is not paid within the specified period.  This will also be at the rate for late payment of invoices (stated on the invoice,) and interest will accrue daily.

2.4.5 Payment of Interest Only

In cases where grant has been paid and a Relevant Event occurs that would normally require Grant to be repaid, the Agency may advise that Grant is not to be recovered. However in these cases the Agency will normally require interest to be paid on the amount of that Grant. For some examples click on the asterisk.  

 

2.4.6 In such cases interest only will be due from the 15th day following the date of the Relevant Event and continue to be charged until,  for example, a  re-forecast milestone is achieved. Interest will normally be charged at the same rate as for late payment of invoices. See paragraph 2.4.1 above.

2.4.7 As per the Programme Management chapter RSLs are required to notify their local Regional Investment Team as soon as they become aware that a forecast payment milestone will not be achieved. 

2.4.8 The Agency will calculate the amount of interest to be paid and invoice RSLs accordingly. RSLs should not make a payment in advance of this invoice.