Authority House Sales
Powers of Sale
Local authorities have the power to sell or lease dwellings under a purchase scheme to another housing authority or to other persons where the dwellings are not occupied. Regulations may be made in relation to
- the classes of houses to which a purchase scheme may apply
- the determination of the discount,
- allowance to be deducted from the purchase price
- and other terms and conditions,
- other related matters
- together with the period for which the scheme will apply.
The 1997 Act placed restrictions on the sale by local authorities and State-subsidised housing. The sale need not be made if it considers that the tenant or a member of this house is or has engaged in antisocial behaviour or the sale would not be in the interests of good estate management.
Post-Sale
Where a dwelling is sold under a purchase scheme, the housing authority is not liable for any charges payable in relation to the dwelling, in relation to services, insurance or the management of control of common areas after the date of the sale.
The former duty to ensure that houses were sold in good repair was repealed. However, there is a common law duty on local authorities in relation to fitness for habitation of houses sold.
Sale of Apartments
The 2009 Act allows for the sale of local authority apartments. When an authority considers an apartment complex as suitable for sale, it is to hold a vote. The housing authority continues as landlords of unsold units.
Tenant purchasers may have the option to purchase their properties by incremental equity purchases over a 20 to 30-year period. In this case, a charge is based on the property for the proportion of the equity not paid for, which declines over a 20 to 30-year period of occupancy.
The housing authority may invoke provisions allowing suspension in cases where the purchaser breaches the terms of the lease. Under the scheme, the equity portion may effectively be given free of charge to the purchaser, provided the terms of the scheme are complied with.
If the tenant purchaser wishes to resell the apartment during the period, the authority has the first option to purchase it back. The authority must repay the value of any outstanding charge on the property.
Selling Apartments
Part 4 of the Housing (Miscellaneous Provisions) Act 2009 provides for the purchase by local Authority tenants of apartments of their accommodation.
A local Authority may designate an apartment complex for the purpose of making the apartments available to tenants for sale. This is subject to the condition that the Housing Authority considers the sale consistent with good estate management of its overall dwelling stock in accordance with policy objectives in its housing services plan relating to the management and maintenance of dwellings owned by the Housing Authority.
The apartment complex must be suitable for designation having regard to
- the configuration of the complex or by reference to the design and layout of the common areas structures, works and service
- the  annual cost of managing and maintaining the apartment complex and providing for future capital works to preserve and improve it
- the number of apartments available for use.
Criteria for Sale
The authority may propose the sale of the apartments where
- it is satisfied that the sale is consistent with good estate management;
- the complex is suitable for designation.
- it is satisfied with the management and maintenance arrangement;
- that the complex is structurally sound and
- has a good and marketable title that can be transferred to the management company.
Where 65% of tenants are entitled to vote, vote in favour, and a minimum number agree they are willing to serve as directors of the owners’ management company. The OMC accepts ownership leases back to the authority, the unsold apartments. Tenants are permitted to purchase under the incremental purchase scheme.
In order for the owner’s management company to proceed, a minimum number of sales must proceed, and a minimum number of 10 tenants must have indicated their willingness to act as directors for the initial period.
Part IV of the legislation applies to separate and self-contained dwellings in an apartment complex, which require arrangements for management and upkeep. This is similar to the Multi-Unit Developments Act legislation.
Procedure
The Authority must be satisfied, where structural work has been carried out within the previous 10 years or in any other case where a survey on the structural condition has been carried out in the previous five years, that the apartment is in good structural condition,  order and repair. It must not be subject to reconstruction proposals, improvement works, or be in an area planned for regeneration.
The Housing Authority must first prepare a draft,  provide certain information and seek the tenants’ views. It must be published online. The proposal to designate the apartment must be approved by elected members of the Council. Alternatively, the manager may decide not to proceed.
A vote of the tenants is required. A 65 per cent vote in favour of the designation is required. Owners must indicate their willingness to act as directors. The proposals may only proceed provided at least the specified minimum numbers are prepared to vote in favour and a minimum number of directors are available.
Management Structure
An owners’ management company must be established. Each apartment owner including purchased apartments, become members of the owners management company. The Housing Authority may decide not to designate any director in certain circumstances.
The 2009 Act specifies particular matters with respect to the owners’ management company, which replicates the Multiunit Development Act. The Housing Authority must transfer the common areas for a nominal consideration to the management company. This is subject to tenancy agreements with the Housing Authority, and the sale is by way of a long lease.
The management company must grant for nominal consideration a lease to the Housing Authority in relation to each apartment by means of an apartment transfer order. The consent of the OMC is not required for sales or lettings.
The Housing Authority may enter a property service agreement with the owners’ management company for the provision of property management services in relation to the apartment block.
Sale Terms
Sales of the apartments take place by way of a charging order creating a reducing charge in favour of the local Authority in respect of the discount given in accordance with a formula. This may be suspended if the apartment owner is not compliant with the terms and conditions of the order.
Where the apartment purchaser proposes to sell during the charging period, he must give notice. The Authority may purchase the apartment for a sum equal to the current value reduced by the proportion representing the Authority’s share.
Priority of Charges
A housing authority may, in the case of homeowners who purchased their homes under previous schemes, enter an agreement with a lending institution as regards the priority of charges to enable a subsequent equity release or ‘top-up’ mortgage by the homeowner (for example, to finance an extension). This is in respect of affordable homes provided under Part V of the Planning and Development Act 2000 and Part 2 of the Housing (Miscellaneous Provisions) Act 2002.