Explanatory Notes

Housing (Wales) Measure 2011

5

Commentary on Sections

Part 2: Registered Social Landlords

70.The provisions in Part 2 of the Housing (Wales) Measure 2011 amend the 1996 Act. The amendments apply in relation to Registered Social Landlords (RSLs) registered by the Welsh Ministers, but they do not amend the existing law in relation to those Landlords’ provision of housing in England.

Chapter 1: Performance

71.This Chapter amends Part 1 of the 1996 Act to strengthen the powers of the Welsh Ministers with regard to the performance of RSLs.

72.Sections 35 to 37 insert new sections 33A to 33C before section 34 of the 1996 Act.

Section 35 - Standards of performance

73.Subsection (1) of the new section 33A gives the Welsh Ministers the power to set standards of performance for RSLs. These standards may apply to the functions of RSLs relating to the provision of housing or to the governance and financial management of the RSLs.

74.Subsection (2) provides that when setting standards, the Welsh Ministers must have regard to the desirability of RSLs being free to choose how to provide services and conduct business.

Section 36 - Guidance on standards of performance

75.Subsections (1) and (2) of the new section 33B provide that the Welsh Ministers may issue guidance in relation to the standards they set, and that the Welsh Ministers may have regard to this guidance in considering whether the standards have been met.

76.Subsection (3) provides that the Welsh Ministers may revise or withdraw such guidance.

77.Subsection (4) requires the Welsh Ministers to bring the guidance to the attention of RSLs.

Section 37 - Consultation

78The new section 33C provides that before setting standards or issuing, revising or withdrawing guidance the Welsh Ministers must consult:

i)

one or more bodies representing the interests of RSLs,

ii)

one or more bodies appearing to them to represent the interests of tenants, and

iii)

one or more bodies appearing to them to represent the interests of local housing authorities.

Section 38 - Information as to levels of performance

79.This section (subsection (2)) amends section 35 of the 1996 Act so as to require the Welsh Ministers to collect information from RSLs about their level of performance, both in relation to their provision of housing in Wales and their governance and financial management.

80.Subsection (3) preserves the current duty on the Welsh Ministers to collect information about the performance of RSLs in connection with the provision of housing in England.

81.Subsection (4) amends subsection (2) of section 35 of the 1996 Act to enable the Welsh Ministers to direct each RSL to provide information to them about the level of performance achieved by the RSL in relation to each standard set under section 33A of the 1996 Act (inserted by section 35 of this Measure). A failure to comply with such a direction, without reasonable excuse, is an offence punishable by a fine not exceeding level 5 on the standard scale (currently £5,000).

Section 39 - Guidance about complaints about performance

82.This section inserts a new section 35A into the 1996 Act which allows the Welsh Ministers to publish guidance about the way in which complaints may be made to them about the performance of RSLs. The guidance may specify various matters, such as the procedure for making a complaint, the criteria to be used by the Welsh Ministers in deciding whether to investigate a complaint, and the period within which they aim to inform complainants of the outcome.

83.Subsection (3) of new section 35A provides that the Welsh Ministers may revise or withdraw such guidance.

Section 40 - Consultation

84.This section inserts a new section 35B into the 1996 Act to provide that if the Welsh Ministers issue guidance in relation to complaints about performance, they must consult on the guidance before publication.

Chapter 2 - Voluntary Undertakings
Section 41 - Voluntary Undertakings

85.Section 41 inserts a new section 6A  into the 1996 Act.  Section 6A makes provision about the nature of the voluntary undertakings that may be made to the Welsh Ministers by RSLs, the procedure for making undertakings, and the effect that undertakings may have.

86.Subsection (1) provides that a RSL may give an undertaking in respect of any matter concerning housing.

87.Subsection (2) provides that the Welsh Ministers may prescribe a procedure to be followed in giving an undertaking.

88.Subsection (3) provides that the Welsh Ministers must have regard to any undertaking offered or given by a RSL when exercising a regulatory or enforcement power. Subsection (4) enables the Welsh Ministers, in addition, to take into account the extent to which such undertakings have been honoured when deciding whether to exercise such a power.

89.One of the purposes of this provision is to enable RSLs to formally notify the Welsh Ministers of actions that they propose to take, and believe are necessary to ensure that their affairs are managed in accordance with the standards set by the Welsh Ministers under section 33A of the 1996 Act. It provides a mechanism by which such commitments can be brought to the attention of the Welsh Ministers, and requires the Welsh Ministers to take account of those undertakings when determining whether to investigate the performance of RSLs, and to take enforcement action where RSLs have not complied with regulatory requirements.

90.Subsection (5) defines what is meant by a “regulatory or enforcement power”.

Chapter 3 - Regulation
Survey and examination
Section 42 - Failure to give notice to occupiers

91.This section amends section 37 of the 1996 Act  so that a RSL commits an offence if it fails, without reasonable excuse, to give tenants of premises in Wales at least seven days’ notice that a person authorised by the Welsh Ministers will be carrying out a survey and examination of those premises.

92.Such a survey and examination may be carried out if it appears to the Welsh Ministers that a RSL may be failing to maintain or repair any premises in accordance with standards set under section 33A, or guidance issued under section 36, of the 1996 Act.

Sections 43 to 48: Inspection

93.Sections 43 to 48 insert a new Part 3A into Schedule 1 to the 1996 Act. This new Part 3A deals with inspection.

Section 43 - Inspection: Overview and application

94.Section 43 inserts a new paragraph 19B into Schedule 1 to the 1996 Act. This new paragraph explains that Part 3A of Schedule 1 makes provision for the inspection of a RSL’s affairs, save those affairs that relate to the provision of housing in England.

Section 44 - Inspection

95.Section 44 inserts a new paragraph 19C into Schedule 1 of the 1996 Act. Sub-paragraph (1) of new paragraph 19C allows the Welsh Ministers themselves or another person to inspect a RSL’s affairs. Sub-paragraph (2) indicates that the inspection can be broad or in relation to a specific issue. Sub-paragraph (3) specifies that the Welsh Ministers may direct that an inspection is discontinued.

96.Sub-paragraph (4) specifies that if a person other than the Welsh Ministers carries out an inspection, the arrangements may include provision for payments.

Section 45 - Inspection: supplemental

97.Section 45 inserts a new paragraph 19D into Schedule 1 to the 1996 Act. Sub-paragraph (1) of new paragraph 19D requires the person carrying out the inspection to produce a written report. Sub-paragraph (2) requires the Welsh Ministers to provide the RSL with a copy of the written report and permits the Welsh Ministers to publish the inspection report and any related information. Sub-paragraph (3) makes it clear that where the Welsh Ministers have arranged for another person to carry out an inspection, that person may publish the inspection report and any related information (whether or not the Welsh Ministers have done so).

98.Sub-paragraphs (4), (5), (6) and (7) together make provision for the Welsh Ministers to charge a RSL a fee for the inspection and for the payment of that fee.  The Welsh Ministers may direct that payment is made to an external inspector, but if they do so, that person must notify the Welsh Ministers about that payment.

Section 46 - Inspector’s powers to require provision of documents or information

99.Section 46 inserts a new paragraph 19E into Schedule 1 of the 1996 Act. This paragraph specifies the powers conferred on an inspector to require the provision of documents or information.

100.Sub-paragraph (1) of new paragraph 19E allows an inspector to require any person to provide specified documents or information. Sub-paragraphs (2) and (3) provide that an inspector’s request for information may specify the form in which the information is to be provided, and at which time and place.  They also allow an inspector to copy or record information.

101.Sub-paragraphs (4) and (5) make it an offence to fail to comply with a requirement without reasonable excuse or to alter, suppress or destroy requested information intentionally. Sub-paragraph (6) provides, in addition, that if a person fails to comply with a requirement to provide documents or information, the Welsh Ministers or other inspector, may apply to the High Court for a remedy.

102.Sub-paragraph (7) provides that an ‘inspector’ means the Welsh Ministers or a person who is authorised in writing by the Welsh Ministers to exercise powers under this paragraph for the purposes of an inspection.

Section 47 - Inspector’s powers to require provision of documents or information: supplemental

103.Section 47 inserts a new paragraph 19F into Schedule 1 to the 1996 Act. Sub-paragraphs (1) and (2) of new paragraph 19F allow persons to refuse to disclose documents or information on grounds of legal professional privilege or banker confidentiality, (other than a duty of confidentiality owed to the landlord or its subsidiary or associate).

104.Sub-paragraphs (3) and (4) set out the liabilities relating to the two offences related to the provision of documents or information (see section 45 of this Measure). A person guilty of an offence of failing to comply with an inspector’s requirement to provide documents or information is liable on summary conviction to a fine not exceeding the level 5 on the standard scale (currently £5,000). A person guilty of intentionally altering, suppressing or destroying a document is liable on summary conviction to a fine not exceeding the statutory maximum (currently £5,000) or, on conviction on indictment, to imprisonment for up to two years, or a fine, or both.

105Sub-paragraph (5) provides that proceedings for these offences may only be brought by or with the consent of either the Welsh Ministers or the Director of Public Prosecutions.

Section 48 - Inspector’s powers of entry and inspection

106.Section 48 inserts a new paragraph 19G into Schedule 1 to the 1996 Act. Sub-paragraph (1) of new paragraph 19G provides that an inspector may at any reasonable time enter premises occupied by the RSL being inspected, and inspect, copy or take away any documents found there. Under sub-paragraph (3), the reference to ‘documents’ found on premises includes documents stored on computers or electronic storage devices on the premises, and documents stored elsewhere which can be accessed by computers on the premises.  The power to inspect includes inspection of any computer or electronic storage device on which such documents have been created or stored (sub-paragraph (4)).

107.Sub-paragraph (2) states that the inspector may not enter residential accommodation (whether the residential accommodation is the whole of, or only part of, premises occupied by the registered social landlord).

108.Sub-paragraphs (5) and (6) provide that the inspector may require any person on the premises to provide facilities or assistance as the inspector reasonably requests. This includes requiring assistance from any person in charge of a computer as the inspector reasonably requests.

109.Sub-paragraphs (7) to (9) specify that it is an offence for a person, without reasonable excuse, to obstruct an inspector carrying out an inspection. A person guilty of an offence is liable on summary conviction to a fine not exceeding level 3 (currently £1,000) on the standard scale. Proceedings for an offence under this paragraph may only be brought by or with the consent of either the Welsh Ministers or the Director of Public Prosecutions.

110Sub-paragraph (10) provides that an ‘inspector’ means the Welsh Ministers or a person who is authorised in writing by the Welsh Ministers to exercise powers under this paragraph for the purposes of an inspection.

111.Sub-paragraph (10) also provides a definition of “residential accommodation”.

Inquiry
Section 49 - Extraordinary audit for the purposes of inquiry

112.Section 49 amends paragraph 22 of Schedule 1 to the 1996 Act to provide that RSLs must meet the costs of any extraordinary audit requested by the Welsh Ministers.

113.The Welsh Ministers may require an extraordinary audit of the accounts and balance sheet of a RSL to be carried out where they are carrying out an inquiry into that RSL. The Welsh Ministers may carry out such an inquiry if it appears to them that there may have been misconduct or mismanagement in relation to the affairs of an RSL.

Chapter 4 – Enforcement

114.Sections 50 to 71 insert a new Chapter 4A into the 1996 Act. Chapter 4A deals with the enforcement action that the Welsh Ministers may take against RSLs.

Section 50 - Welsh Ministers’ enforcement powers: general

115.This section inserts a new section 50A into the 1996 Act. This new section provides that Chapter 4A does not apply in relation to a RSL’s housing in England.

Section 51 - Exercise of enforcement powers

116.This section inserts a new section 50B into the 1996 Act.  This new section applies where the Welsh Ministers are deciding whether to exercise an enforcement power, which power to exercise, or how to exercise a power. It provides that in all these circumstances, the Welsh Ministers must consider:

(a)

the desirability of RSLs being free to choose how to provide services and conduct business;

(b)

whether the failure or other problem concerned is serious or trivial;

(c)

whether the failure or other problem is a recurrent or isolated incident;

(d)

the speed with which the failure or other problem needs to be addressed

117.Subsection (3) defines an ‘enforcement power’ as a power exercisable under any of the statutory provisions listed in that subsection.

Enforcement Notice

118.Sections 52 to 56 insert new sections 50C to 50G into the 1996 Act. These new sections describe the arrangements relating to the giving of enforcement notices to RSLs.

Section 52 - Grounds for giving notice

119.This section inserts a new section 50C into the 1996 Act to specify the grounds on which the Welsh Ministers may give an enforcement notice to a RSL. Subsection (1) of new section 50C specifies that the Welsh Ministers must be satisfied that one of the cases for issuing an enforcement notice applies and that an enforcement notice is the appropriate intervention power to use, whether alone or as a potential precursor to further action.

120.Subsections (2) to (10) specify the cases that may form the basis for giving an enforcement notice as follows:

121.Subsection (11) provides that where the Welsh Ministers are satisfied that an offence under Part 1 of the 1996 Act has been committed in respect of a RSL but by another person (e.g. a member or employee), the Welsh Ministers may serve an enforcement notice on the other person rather than the RSL and, in such cases, references in Chapter 4A of the 1996 Act to the RSL should be read as references to that person.

Section 53 - Content

122.This section inserts a new section 50D into the 1996 Act to specify what an enforcement notice must include. It must specify which of the cases in section 50C of the 1996 Act are the grounds for the enforcement notice, the specific action which the RSL must take in response to the notice, the date by when the specified action must be taken, and the effect of an appeal or withdrawal.

123.Subsection (2) permits the Welsh Ministers to specify in an enforcement notice that the notice must be published in a specified manner.

Section 54 - Appeal

124.This section inserts a new section 50E into the 1996 Act to provide that a RSL served with an enforcement notice may appeal against it to the High Court.

Section 55 - Withdrawal

125.This section inserts a new section 50F into the 1996 Act to provide that the Welsh Ministers may withdraw an enforcement notice.

Section 56 - Sanction

126.This section inserts a new section 50G into the 1996 Act.

127.Subsection (1) of new section 50G places limitations on the further steps that may be taken by the Welsh Ministers where the enforcement notice has been served on a person (other than the RSL) under section 50C(11) of the 1996 Act. In these circumstances, the Welsh Ministers may only issue a penalty notice (as set out in sections 50H to 50M of the 1996 Act), or take steps to instigate a prosecution in relation to the offence which provided grounds for service of the enforcement notice. Subsection (2) provides that a person who has been served with an enforcement notice under Case 8 of section 50C of the 1996 Act may be prosecuted for the offence which gave grounds for that enforcement notice only if they have failed to comply with that notice.

Penalty

128.Sections 57 to 63 insert new sections 50H to 50N into the 1996 Act. These new sections describe the arrangements relating to the imposition of penalties on RSLs.

Section 57 - Grounds for imposition

129.This section inserts a new section 50H into the 1996 Act to specify the grounds on which the Welsh Ministers may decide to require RSLs to pay penalties. As well as being satisfied that one of the cases specified in this section applies, the Welsh Ministers must also be satisfied that a penalty is appropriate for the identified problem.

130.Subsections (2) to (6) of new section 50H specify the cases where the Welsh Ministers may issue a penalty. These cases are where:

131.Subsection (7) provides that where the Welsh Ministers are satisfied that an offence has been committed in respect of a RSL by another person, the case for imposing a penalty is that which is set out in subsection (6), and the Welsh Ministers may require that other person rather than the RSL to pay the penalty. This subsection also provides that, in such cases, references in Chapter 4A of the 1996 Act to a RSL should be read as references to that other person.

132.Subsection (8) requires the Welsh Ministers to be satisfied beyond reasonable doubt if they wish to rely on the case described in subsection (6) as a basis for the imposition of a penalty.

Section 58 - Imposition

133.This section inserts a new section 50I into the 1996 Act to provide that a penalty is imposed by a written notice being served on a RSL. Subsection (2) of new section 50I requires the notice to specify which of the cases listed in subsections (2) to (6) of section 50H of the 1996 Act is the basis for the notice, the amount of the penalty that must be paid, how the penalty must be paid, the deadline for the payment, and any interest or additional penalty payable in the event of late payment.

134.Subsection (3) allows the notice to require the RSL to publish information about the penalty. Subsection (4) requires the notice to explain the enforcement action that may be taken in the event of non-payment and the right to appeal to the High Court against the penalty.

Section 59 - Amount

135.This section inserts a new section 50J into the 1996 Act which provides that the amount of the penalty that may be imposed on the ground specified in Case 5 (where an offence has been committed by a RSL) of section 50H of the 1996 Act may not exceed the maximum amount that the court could impose for that offence. In all other cases the maximum amount of penalty that the Welsh Ministers may impose is £5,000. The Welsh Ministers may amend this maximum penalty of £5,000 by affirmative resolution order.

Section 60 - Warning

136.This section inserts a new section 50K into the 1996 Act which sets out a warning procedure which must be followed before a penalty notice can be imposed. The Welsh Ministers must give a RSL a notice, called a “pre-penalty warning”, which must specify the grounds on which they think a penalty could be imposed, warn the RSL that the Welsh Ministers are considering imposing a penalty, include any indication the Welsh Ministers can give of the likely amount, and explain the RSL’s right to make representations (section 50L of the 1996 Act), the enforcement action that  may be taken in relation to penalties (section 50M of the 1996 Act) and the RSL’s right to appeal against the penalty (section 50N of the 1996 Act).

137.Subsection (2) requires the Welsh Ministers to send any other person that it thinks appropriate, a copy of the pre-penalty warning. In deciding to whom it would be appropriate to send a copy, they must have particular regard to any person who provided information which has led to the giving of the pre-penalty warning.

138.Subsection (3) requires the Welsh Ministers to refer to section 6A of the 1996 Act (inserted by section 41 of this Measure and which permits RSL’s to offer voluntary undertakings) and indicate in its pre-penalty warning whether the Welsh Ministers would accept a voluntary undertaking instead of, or in mitigation of, a penalty.

139.Subsection (4) allows the Welsh Ministers to combine the pre-penalty warning with warnings about the use of its other enforcement powers.

Section 61 - Representations

140.This section inserts a new section 50L into the 1996 Act which allows RSLs issued with a pre-penalty warning to make representations to the Welsh Ministers.

141.Subsection (2) of the new section 50L specifies that the minimum period for representations must be at least 28 days, beginning on the date on which the RSL receives the pre-penalty warning.

142.The representations may address whether a penalty should be imposed, or the likely amount of any penalty

143.Subsection (4) provides that at the end of the period for representations the Welsh Ministers must consider any representations that have been made, and decide whether to impose a penalty.

Section 62 - Enforcement

144.This section inserts a new section 50M into the 1996 Act which specifies how penalties will be enforced, and provides sanctions for late payment or non-payment. Penalties are treated as a debt to the Welsh Ministers once a penalty notice is issued.

145.Subsection (2) of the new section 50M allows the Welsh Ministers to charge interest on penalties that are not paid by the date specified in the penalty notice and to impose additional penalties for late payment. In such cases, subsection (3) provides that the additional sums are also treated as penalties, and that these additional amounts may have the effect of increasing the penalty above the limit set by section 50J of the 1996 Act.

146.Subsection (4) gives a discretionary power to the Welsh Ministers to offer an early payment discount if the RSL pays the penalty in advance of the date specified in the penalty notice.

147.Subsection (5) specifies that if the penalty notice is served on a person under Case 5 of section 50H of the 1996 Act, that person may not be prosecuted for the offence which is the ground for requiring the payment of the penalty.

Section 63 - Appeal

148.This section inserts a new section 50N into the 1996 Act which gives a RSL the right to appeal to the High Court against the imposition of, and amount of, a penalty.

Compensation

149.Sections 64 to 71 insert new sections 50O to 50V into the 1996 Act. These new sections describe the arrangements relating to the imposition of a requirement on a RSL to pay compensation.

Section 64 - Grounds for Award

150.This section inserts a new section 50O into the 1996 Act which specifies the grounds on which the Welsh Ministers may require a RSL to pay compensation. The Welsh Ministers must be satisfied either that the RSL has failed to meet a standard of performance as set out in section 33A of the 1996 Act, or that the RSL has failed to comply with an undertaking that it has given to the Welsh Ministers under section 6A of that Act. They must also be satisfied that the award of compensation is appropriate.

Section 65 - Persons to whom compensation may be awarded

151.This section inserts a new section 50P into the 1996 Act which indicates those circumstances under which compensation may be awarded. It should be awarded to a person or persons who have suffered as a result of the failure that forms the basis for awarding compensation.

Section 66 - Award

152.This section inserts a new section 50Q into the 1996 Act which specifies the process for giving a notice to a RSL that requires payment of compensation, and the content of that notice. Compensation is awarded by the Welsh Ministers giving written notice (a “compensation notice”) to the RSL and the person or persons to be compensated.

153.Subsection (2) of new section 50Q provides that compensation notices must set out:

154.The notice may require the RSL to publish information about the award and must explain the effects of sections 50U (enforcement) and 50V (appeal) of the 1996 Act.

Section 67 - Impact

155.This section inserts a new section 50R into the 1996 Act which requires the Welsh Ministers to take account of any information available to it about the financial situation of the RSL when considering awarding compensation and when considering the amount. The Welsh Ministers must consider the likely impact on the RSL’s ability to provide services and in particular, must aim to avoid jeopardising its financial viability, existing financial commitments, and ability to remedy the problem.

Section 68 - Warning

156.This section inserts a new section 50S into the 1996 Act which allows for the issue of a ‘pre-compensation warning’ and specifies a similar procedure to that in section 50K(1) of the 1996 Act (pre-penalty warnings), as inserted by section 60 of this Measure.

Section 69 - Representations

157.This section inserts a new section 50T into the 1996 Act which allows the RSL to make representations to the Welsh Ministers in relation to compensation. The process specifies a similar procedure to that in section 50L of the 1996 Act (pre-penalty warnings - representations), as inserted by section 61 of this Measure.

Section 70 - Enforcement

158.This section inserts a new section 50U into the 1996 Act which makes provision for compensation payments to be enforced in a similar manner to section 50M of the 1996 Act, as inserted by section 62 of this Measure. Compensation is treated as a debt to the person or persons to whom it has been awarded. The Welsh Ministers may award interest or additional compensation for non payment or late payment of compensation.

Section 71 - Appeal

159.This section inserts a new section 50V into the 1996 Act which gives a RSL the right to appeal to the High Court against the award of compensation or the amount of compensation awarded.

Management and constitution of registered social landlords

160.Sections 72 to 78 insert new paragraphs 15B to 15H into Schedule 1 to the 1996 Act.  These give the Welsh Ministers additional powers in relation to the management of RSLs.

Section 72 - Management Tender

161.This section inserts a new paragraph 15B into Schedule 1 to the 1996 Act. Sub-paragraph (1) of new paragraph 15B specifies that the Welsh Ministers may use the power conferred by this paragraph where they are satisfied that a RSL has failed to meet a standard set under new section 33A of the 1996 Act, or that there has been misconduct or mismanagement in its affairs.

162.If the Welsh Ministers are satisfied that one of the conditions in sub-paragraph (1) is met, sub-paragraph (3) gives them the power to require the RSL to put the RSL’s management functions out to tender. The Welsh Ministers must specify the process that the social landlord is to follow in putting the services out to tender and making an appointment as a result of that process.

163.The services to be tendered out may relate to the RSLs affairs generally, or may relate to specified affairs.

164.The Welsh Ministers must specify certain matters when they exercise this power, as follows:

Section 73 - Management tender: supplemental

165.This section inserts a new paragraph 15C into Schedule 1 to the 1996 Act. Sub-paragraph (1) of new paragraph 15C provides that before the Welsh Ministers require a RSL to implement the tendering process, they must give that RSL a notice which specifies the grounds on which action may be taken, warns the RSL that they are considering action under this section, and explains the effect of the paragraph.

166.Sub-paragraphs (2) and (3) provide that the notice must specify a period during which the RSL may make representations to the Welsh Ministers, and that the period must be at least 28 days and begin on the date the social landlord receives the notice.

167.Sub-paragraph (4) requires the Welsh Ministers to send a copy of the notice to any person they think appropriate. In deciding to whom it would be appropriate to send a copy, they must have particular regard to any person who provided information which has led to the giving of the notice.

168.Sub-paragraph (5) provides that the notice served must advise the RSL on whom it is served about the provisions for the landlord to give voluntary undertakings to the Welsh Ministers, and the extent to which they would accept an undertaking instead of, or in mitigation of, the use of their powers under Chapter 2.

169.Sub-paragraph (6) allows the Welsh Ministers to issue the notice in conjunction with warning notices relating to the potential use of other enforcement powers.

170.Sub-paragraph (7) provides that in deciding whether to use this power, the Welsh Ministers must have regard to the views of relevant tenants, the RSL and, if appropriate, any relevant local housing authority.

171.Sub-paragraph (8) states that a RSL served with a notice by the Welsh Ministers under paragraph 15B of the 1996 Act has a right of appeal to the High Court.

Section 74 - Management Transfer

172.This section inserts a new paragraph 15D into Schedule 1 to the 1996 Act. The powers set out in this paragraph are exercisable following an inquiry as provided for under paragraph 20 of Schedule 1 to the 1996 Act, or an audit under paragraph 22 of that Schedule.

173.Sub-paragraphs (2) and (3) provide that the Welsh Ministers may require a RSL to transfer some or all of its management functions to a specified person. The requirement may relate to the RSL’s affairs generally or to specified affairs only.

174.Sub-paragraph (4) provides that the requirement must specify the terms and conditions of the transfer (including as to remuneration) or make provision for the manner in which they are to be determined.

175.Sub-paragraph (5) gives the person to whom the management functions are to be transferred, the powers specified by the Welsh Ministers in the requirement. In addition the person to whom management is transferred by the requirement will have any other powers in relation to the RSL’s business that are necessary to give effect to the purposes specified in the requirement. These specifically include the power to enter into agreements and take other action on behalf of the RSL.

Section 75 - Management Transfer: supplemental

176.Section 41 inserts a new paragraph 15E into Schedule 1 to the 1996 Act. This makes similar supplemental provision in relation to management transfer to that made in paragraph 15C of that Schedule (inserted by section 73 of this Measure) in relation to management tender.

Section 76 - Appointment of manager of registered social landlord

177.This section inserts a new paragraph 15F into Schedule 1 to the 1996 Act. This gives the Welsh Ministers the power either to appoint an individual as manager of the RSL, or to require the RSL to appoint an individual as manager as set out in sub-paragraph (2) of new paragraph 15F.

178.The Welsh Ministers may exercise this power if they are satisfied that a RSL has failed to meet a standard set under section 33A of the 1996 Act or that there has been misconduct or mismanagement in its affairs.

179.Sub-paragraphs (3) to (5) of new paragraph 15F set out the nature of the requirement or the appointment that will be specified by the Welsh Ministers.

180.Sub-paragraph (3) provides that the Welsh Ministers may determine the matters in respect of which the manager is to be appointed.

181.Sub-paragraph (4) provides that the appointment of a manager is to be on  terms and conditions (including as to remuneration) specified in or determined in accordance with the appointment of, or the requirement to appoint, a manager under sub-paragraph (3).

182.Sub-paragraph (5) gives the appointed manager any powers specified in the requirement or appointment, and any other powers in relation to the RSL,s business that are required for the purposes specified in the requirement or appointment. These specifically include the power to enter into agreements and take other action on behalf of the RSL.

Section 77- Appointment of manger: supplemental

183.This section inserts a new paragraph 15G into Schedule 1 to the 1996 Act. This makes similar provision to that made in paragraph 15C of that Schedule in relation to appointment of a manager.

Section 78 - Amalgamation

184.This section inserts a new paragraph 15H into Schedule 1 to the 1996 Act. Sub-paragraph (1) of new paragraph 15H sets out the cases where this paragraph applies, which are where the Welsh Ministers are satisfied that there has been misconduct or mismanagement in the affairs of a RSL which is an industrial and provident society, or that the amalgamation of an industrial and provident society with another industrial and provident society would be likely to improve the management of its affairs.

185.Sub-paragraph (2) gives the Welsh Ministers power to bring about the amalgamation of the society with another industrial and provident society.

186.Sub-paragraph (3) specifies that an instrument providing for an amalgamation has the same effect as a resolution by that society under section 50 of the Industrial and Provident Societies Act 1965. Sub-paragraphs (4) to (6) require that a copy of the instrument be sent to and registered by the Financial Services Authority, at which point the instrument takes effect, and require that the copy is sent for registration within 14 days of the date of execution.

187.Sub-paragraph (7) provides that any body created by virtue of an amalgamation must be registered with the Welsh Ministers as a social landlord and pending registration, it is to be treated as registered.

Amendments relating to inquiries or audits

188.Sections 79 to 82 make amendments to paragraphs 23 to 26 of Schedule 1 to the 1996 Act to amend the Welsh Ministers’ powers in relation to matters consequential to the carrying out of inquiries or audits under that Schedule.

Section 79 - Restrictions on dealings during an inquiry

189.This section amends paragraph 23 of Schedule 1 to the 1996 Act by inserting a new sub-paragraph (2A). This sub-paragraph requires the Welsh Ministers to take reasonable steps to give notice to a RSL before making an order to restrict the dealings of the RSL during an inquiry. It also requires the Welsh Ministers to take reasonable steps to give notice to the landlord and the person to whom the order will directed where the Welsh Ministers propose to make an order directing a bank (or other person) holding money or securities on behalf of a landlord not to part with the money or securities during an inquiry.

Section 80 - Restrictions on dealings following an inquiry or extraordinary audit

190.This section makes an equivalent amendment to that made by section 79 by amending paragraph 24 of Schedule 1 to the 1996 Act. It does this by inserting a new subparagraph (3A) in relation to dealings following an inquiry or audit. A new sub-paragraph (7) is also inserted into paragraph 24, stating that any restriction on dealings following an inquiry or extraordinary audit will have effect until it is revoked by the Welsh Ministers.

Section 81 - Disqualification of removed person

191.This section amends paragraph 25 of Schedule 1 to the 1996 Act by inserting a new sub-paragraph (4A). Paragraph 25 disqualifies a person removed from office under certain statutory provisions from acting as an officer of a RSL, and requires the Welsh Ministers to keep a register of all persons removed from office under those provisions. The Welsh Ministers may, however, waive a person’s disqualification. Where they do so, new sub-paragraph (4A) will require the Welsh Ministers to show the details of any waivers in the register.

Section 82 - Acting while disqualified

192.This section makes a number of amendments to paragraph 26 of Schedule 1 to the 1996 Act.

193.The effect of the amendment in subsection (2) is to increase the period for which a person guilty of an offence of acting as an officer of a RSL while disqualified may be imprisoned on summary conviction. At present, such a person may be imprisoned for up to six months, but subsection (2) will enable such a person to be imprisoned for up to 12 months.

194.The effect of subsection (3) is to prevent this increased period of imprisonment from being imposed in relation to an offence committed before section 282 of the Criminal Justice Act 2003 has been commenced.

195.Under paragraph 26 of Schedule 1 to the 1996 Act, the Welsh Ministers may order a person to repay sums to a RSL or to the Welsh Ministers where that person has acted as an officer of that landlord while disqualified and has received payments or benefits in connection with that role. Subsection (4) inserts a new sub-paragraph into paragraph 26 to enable the landlord or the Welsh Ministers to recover that sum as a debt if the disqualified person fails to comply with an order.

Chapter 5- Miscellaneous and General Provisions

196.Sections 83 to 88 make various miscellaneous and general amendments to the 1996 Act.

Section 83 - Insolvency, etc. of registered social landlord: appointment of interim manager

197.This section inserts a new section 43A into the 1996 Act which gives the Welsh Ministers power to appoint an interim manager to manage a RSLs affairs during a moratorium. Such a moratorium will come into being where any of the steps mentioned in section 41 of the 1996 Act (relating to insolvency etc.) are taken.

198.Subsection (2) of new section 43A of the 1996 Act enables an interim manager to be appointed in relation to the RSL’s affairs generally, or in relation to specific affairs.

199.Subsection (3) requires the appointment to be made on terms and conditions which must be specified in, or determined in accordance with, the appointment.

200.Subsection (4) provides that an interim manager is to have any power specified in the appointment, and any other power in relation to the RSL’s affairs required by the manager for the purposes specified in the appointment. However, subsection (6) provides that an interim manager may not dispose of land or grant security over land.

201.Subsections (7) and (8) enable the Welsh Ministers to give directions to the interim manager and to amend or revoke such directions.

202.Subsection (9) provides that the appointment of an interim manager comes to an end at the end of the moratorium, at the time when proposals as to the future ownership and management of the RSL is agreed, or on a date specified in the appointment, whichever is the earliest. If a person ceases to be an interim manager before that end date (for example, due to illness or death), subsection (10) enables the Welsh Ministers to appoint a new interim manager.

Section 84 - Removal of officers

203.This section amends paragraphs 4 and 5 of Schedule 1 to the 1996 Act so as to expand the powers of the Welsh Ministers in relation to the removal of the officers of a RSL.  The Welsh Ministers are currently able to remove only certain types of officers (for example, the directors and trustees of a RSL which is a registered charity). The amendments will enable the Welsh Ministers to remove any person who is an “officer” of a RSL within the meaning given by section 59 of the 1996 Act.

204.The Welsh Ministers may remove an officer on grounds such as bankruptcy, disqualification under the Company Directors Disqualification Act 1986 or Charities Act 1983, or failure to act.

Section 85 - Appointment of new officers

205.This section makes amendments to paragraphs 6, 7 and 8 of Schedule 1 to the 1996 Act so as to expand the powers of the Welsh Ministers to appoint officers of an RSL. The Welsh Ministers are currently able to appoint only certain types of officers (for example, the directors and trustees of a RSL which is a registered charity). The amendments will enable the Welsh Ministers to appoint any kind of “officer” within the meaning given to that term by section 59 to the 1996 Act.

206.The Welsh Ministers may appoint a new officer of a RSL where they have removed an officer, where there are no officers in place for a RSL, or where they consider that such an appointment is necessary for the proper management of a RSL’s affairs.

Section 86 - Charities that have “received public assistance”

207.This section amends section 58 of the 1996 Act (definitions relating to charities) by inserting a new subsection (1A).  This new subsection defines the circumstances in which a registered charity will be regarded as having ‘received public assistance’ for the purposes of the Part 1 of the 1996 Act. These include circumstances in which the charity has been given financial assistance for privately let accommodation under section 24 of the Local Government Act 1988, or has had housing transferred to it under section 34 of the 1985 Act or section 135 of the Leasehold Reform, Housing and Urban Development Act 1993, or has received a grant or loan under various provisions, including social housing grant under section 18 of the 1996 Act.

Section 87 - Minor definitions

208.This section amends section 63 of the 1996 Act (minor definitions applying to Part 1 of that Act) by inserting definitions of ‘action’, ‘misconduct’ and ‘representations’ to the list of definitions in that section.

Section 88 - Minor and consequential amendments

209.This section introduces the schedule of minor and consequential amendments.