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Housing and Regeneration Act 2008

Suspension and removal of officers
Section 259 – Suspension during inquiry

771.This section applies where an inquiry under section 206 is in progress in respect of a non-profit registered provider, and one of two Cases applies. Case 1 is that the regulator has reasonable grounds for believing that the affairs of a registered provider have been mismanaged and that the interests of tenants or its assets require protection. Case 2 is that as a result of an interim report from an inquiry, the regulator is satisfied that the provider’s affairs have been mismanaged.

772.The regulator may suspend an officer, employee or agent of the registered provider who it considers contributed to that failure or mismanagement. The suspension comes to an end 6 months after the final report is made, or the regulator can end it sooner. The regulator may only suspend an officer of a registered charity if it has received public assistance and must notify the Charity Commission.

Section 260 – Removal or suspension following inquiry

773.This section gives the regulator similar powers to those under section 259, but permits permanent removal following (rather than during) an inquiry, and suspension pending a decision on permanent removal. The regulator must take all reasonable steps to give at least 14 days’ notice to the person and the provider.

Section 261 – Suspension under section 259 or 260: supplemental

774.This section is supplemental to sections 259 and 260. It allows the regulator to give directions to the registered provider about the performance of the suspended or removed person’s functions or any other matter arising from the suspension, and allows the regulator to appoint a person to perform the suspended person’s functions.

Section 262 – Disqualification of removed person

775.This section disqualifies anyone from acting as an officer of a registered provider if they have been removed (not suspended) under section 260, or under parts of previous Acts which now only apply to Wales. The regulator may waive a disqualification if the person applies for a waiver. If they do act as an officer while disqualified, their acts are not invalid by reason only of the disqualification – if their acts were automatically void, this could cause problems for the provider.

Section 263 – Register of disqualified persons

776.This section requires the regulator to keep a register of disqualified persons and waivers which is publicly available.

Section 264 – Acting while disqualified: offence

777.This section makes it an offence for a person to act as an officer while disqualified, which can make them liable to imprisonment or a fine.

Section 265 – Acting while disqualified: other consequences

778.This section permits the regulator to require repayment of part or all of any benefits received by a person acting as an officer while disqualified.

Section 266 – Removal of officers

779.The section gives the regulator the power to remove an officer of a non-profit registered regulator in seven specified Cases. These are:

  • the officer has been adjudged to be bankrupt,

  • the officer has made an arrangement with creditors,

  • the officer has been subject to a disqualification order or a disqualification undertaking under the Company Directors Disqualification Act 1986 (or the equivalent statutory provision for Northern Ireland),

  • the officer has been subject to an order under section 429(2) of the Insolvency Act 1986 (which occurs where a person fails to make a payment under a county court administration order under the County Courts Act 1984),

  • the officer is disqualified under section 72 of the Charities Act 1993 from being a charity trustee (whether this is in relation to their position as an officer of the registered provider that is a charity or as an officer of a different charity),

  • the officer is incapable of acting by reason of mental disorder,

  • the officer is impeding the proper management of the registered provider by reason of absence or failure to act.

Section 267Section 266: supplemental

780.Section 267 is supplemental on section 266. It provides that before making an order under section 266 the regulator must give both the officer concerned and the registered provider at least 14 days’ notice. It also specifies that an order under section 266 may only be made in respect of a registered charity if that charity has received public assistance as defined in section 274.

Section 268 – Appeal against removal or suspension

781.This section gives anyone removed or suspended under sections 259, 260 or 266 a right of appeal to the High Court.

Section 269 – Appointment of new officers

782.This section gives the regulator the power to appoint a person as an officer of a non-profit registered provider. Subsection (1) specifies that the regulator may do this where:

a.

it is to replace an officer removed under section 266;

b.

the registered provider has no officers; or

c.

the regulator thinks that the additional officer is necessary for the proper management of the registered provider’s affairs.

783.Subsection (2) specifies that the regulator may appoint more than a minority of the officers of a registered provider only if the provider has fewer officers than required by its constitution.

784.Subsection (3) says that the regulator’s power in subsection (1) overrides any restrictions in the registered provider’s constitution on the eligibility requirements for officers, or the number of officers that the registered provider may have.

785.Subsection (4) requires that an order made by the regulator under subsection (1) must specify the period for which, and the terms on which, the person is appointed as an officer. It also provides that the regulator may renew the appointment when the period specified in the order under subsection (1) expires, and that the new officer appointed by the regulator may resign or retire as allowed in the registered provider’s constitution.

786.Subsection (5) provides that an officer appointed by the regulator under subsection (1) has the same standing, in terms of rights, powers and responsibilities, as if he or she had been appointed as an officer under the constitution of the provider.

787.Subsection (6) provides that the regulator may only make an appointment in relation to a registered charity if one of the conditions in section 274 is fulfilled (which are the conditions that the registered charity has received either homes or financial assistance that are relevant to the functions of the regulator under the specified statutory provisions), and the regulator has consulted the Charity Commission before making the order under subsection (1).

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