Dcc sale of flats presentation 20101[1]

Sale of Flats Scheme

Evelyn Hanlon
PATHS INTO SUSTAINABILITY THROUGH HOME OWNERSHIP Housing & Residential Services
OPENING THE DOOR TO BETTER HOMES On behalf of

Dec 2010

Sale of Flats - Overview
 Commencement order expected early 2011
 Focus is on achieving social mix through tenure diversity -
stock retention is important but so is social sustainability.
 Not “Right-to-Buy” it provides Council with system for
selling in schemes which Council approve. Reserved Function
 Uptake will be affected by price & income, loan availability
and which units can be sold
 Sale of flats has financial implications for DCC initial cash
injection but thereafter reduction in rent charge as better off
on higher rents purchase.

PATHS INTO SUSTAINABILITY THROUGH HOME OWNERSHIP Evelyn Hanlon
OPENING THE DOOR TO BETTER HOMES
Housing & Residential Services

Issues
 Sale of flats will affect net housing income:
– Reduced weekly rent charge
– Some decrease in landlord costs
– Income from service charges from purchasers
– Capital receipts and clearing of arrears in year one.
 Sales will reduce casual vacancies; typically flats were handed
back more often because there was no right to buy.
 People who have serious arrears including those on which NQ
have been served won’t be entitled to purchase.


Agency Services
 As owners become a majority (or significant minority) they will
want to decide how their common areas are managed.
 Quality & cost will of service charges will decide whether they
will change to different provider/managing agent.
 DCC have opportunity to remain as agent and to compete for
mixed tenure schemes.
 We could also offer landlord maintenance services to former
tenants and other landlords. This would be in line with
Supporting Effective Private Housing Market DOEHLG, Building
Sustainable Communities Dec 2005.


2011 Regulations
Housing authority may designate a flat complex for sale if
satisfied that this would be consistent with good estate
management :
 Scheme is in a suitable condition, design, affordable cost of
management & maintenance
 Scheme is in good structural condition (works within last 10
years or structural survey within last 5 years showing it is in
good structural condition.
 There are no redevelopment/regeneration planned
 Good marketable title exists
 Scheme is not in excluded class as set out by Minister e.g.
senior citizen/special needs, mixed use, Part V
 Tenants willing to act as directors in Management Company

Regulations 2011 (contd)
Draft proposal for each complex to be designated showing
arrangements for:
 Tenant plebiscite within 3 months of adoption by Councillors
 Vesting of common areas
 Sale of apartments to tenants
 Common area management & maintenance
 Sinking fund requirement
Reserved Function - Members can refuse, adopt or modify proposal
to designate a complex for sale
A complex may only be designated when and if:
 65% of tenants vote in favour in the plebiscite (tenants can only
vote at the time of the plebiscite) Only current/valid tenants
 Required number of tenant/purchasers are willing to act as
directors (3-10 directors)

Purchaser: money issues
Sale Price:
 Not yet agreed by DOEHLG
Sinking fund – established from day one and Council to set aside
percentage of capital receipts for future structural works
Service Charge
 Determined by Council for first few years until required
percentage of owner occupation achieved
 Proposal to set out clearly service charge and its basis in budget
 Service Charge will be paid on basis of size of unit
 Communal areas including estate offices and community rooms to
be excluded from contributing to service charge
 Council will pay service charge for its units


Legal Issues
 Management company established just before first sales are
finalised – everything in place but not incorporated until the
Company is needed
 Firsts members and directors need to be in place; some will be
local authority (councillors/staff)
 All property (flats /common areas) vested in management co.
Flats leased back to Council who will sell/rent units as required
 Areas which can logically remain in public control e.g. footpaths,
extensive green areas, sewers etc will not be vested in
management company in order to keep service charges and
sinking funds affordable.
 Tenants only can vote in plebisite, one vote per flat and no vote
for people who are not tenants because of notices to quit etc.


Right to Sell Flats
 246 different schemes listed in rent file (over 10,000 units)
 Not all schemes will be for sale some will be:
– affected by regeneration
– Awaiting PIP works
– Part V / Special Needs / Mixed Use
 Approx 96 schemes with 1000 tenants likely to be included
in sales scheme.


Sustainability
 Social sustainability is as important as stock retention but
inescapable conclusion - some stock should not be sold.
 housing estates have become socially sustainable following
action of housing market e.g. Cabra, Drimnagh. Fatima, O
Devaney same people but not same level of sustainability.
 Some units should not be sold: Part V “buys in” flats in areas
with good social mix already;
 Sale of Flats should be seen as opportunity to increase
sustainability in flat schemes through action of the housing
market and people’s desire for home ownership even with the
economic downturn


Dcc sale of flats presentation 20101[1]

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