This innovative new system requires a strong working partnership between the Homes and Communities Agency, the registered social landlord (RSL) and the house builder. But once the funding approval is given, what are the key things to bear in mind to speed a bulk purchase through the legal process:
- Be pro-active. Provide the house builder with a clear list of the information you require, from full and up-to-date planning and infrastructure disclosure to service charge and ground rent information.
- Set out the standard of specification you need to achieve and your handover requirements right at the outset.
- Make sure that any planning agreement restrictions which could affect you are taken into account. Not only nomination rights, but in the current market any conditions which would prevent the plots being used as social rented accommodation too, as shared ownership becomes less attractive.
- Be robust. Agree a clear set of heads of terms. From the outset make your position clear on the extent of the development obligations you require, timescales, liquidated damages and security for those obligations, retentions and your position on the payment of deposits.
- Resource. Several strands of the transaction will be running simultaneously. From planning, infrastructure and service charge due diligence to surveys, title requisitions, plots specific drafting and the negotiating of the commercial development obligations. You and your advisers must resource each such element adequately and have streamlined reporting systems in place to keep everyone involved up to speed.
Given the changes brought forward by the Housing and Regeneration Act, the wide-ranging role now envisaged for the Homes and Communities Agency and the recent announcement from its chief executive Sir Bob Kerslake that the Agency may relax the 40% limit on how much grant can be used towards the costs of acquisitions, more deals of this nature are a real possibility.