Office of Public Sector Information
298.Subsection (4) provides that a direction may provide specifically for how registered providers that are charities should distinguish in their accounts between social housing activities and other matters. This broadly replicates the effect of paragraph 16(2) of Schedule 1 to the 1996 Act.
299.Subsection (5) provides that directions under this power may make general provision, or provision specific to particular cases, and that provision may vary according to different cases or types of provider.
300.Subsection (6) provides that where directions relate to more than one provider, those directions must first be consulted on by the regulator with bodies appearing to represent the interests of registered providers.
301.Subsection (7) requires the regulator to make arrangements to ensure that providers to whom directions apply are made aware of their requirements.
302.This section broadly replicates the effect of paragraphs 16(5) to 16(8) of Schedule 1 to the 1996 Act. It requires all registered providers to send a copy of their accounts to the regulator within six months of the end of the year to which they relate. These accounts must be accompanied by an auditor’s report, or, if an enactment requires a report other than an auditor’s report, that other report. The report must specify whether the accounts comply with any relevant directions under section 127.
303.This section applies in relation to a registered provider which is a registered company, other than a registered charity, which is exempt from the audit requirements of the Companies Act 2006 by virtue of section 477 of that Act, because it is a small company. Registered providers in this category must cause an accountant’s report to be prepared, in accordance with section 130 and made to the company’s members in respect of the company’s individual accounts for any financial year in which the company takes advantage of its exemption from audit. ‘Individual accounts’ has the same meaning as in section 396 of the Companies Act 2006.
304.Subsection (1) of this section specifies that the report required by section 129 must be prepared by a reporting accountant eligible under section 131.
305.Subsection (2) requires the report to state whether the individual accounts are in accordance with the company’s accounting records kept under section 386 of the Companies Act 2006.
306.Subsection (3) requires that on the basis of information contained in the accounting records the report must also state whether the accounts comply with Part 15 of the Companies Act 2006, and whether the company is entitled to exemption from audit under section 477 of that Act (small companies’ exemption) for the year in question.
307.Subsection (4) requires that the report must give the name of the reporting accountant and be signed and dated.
308.Subsection (5) requires that the report is signed by the reporting accountant (where it is an individual) or an authorised person (where the reporting accountant is a firm).
309.Subsection (6) defines the meaning of ‘firm’.
310.This section specifies who is eligible to act as a reporting accountant for a company. Under subsections (1) to (3), a person is eligible if the person is not prohibited from acting as an auditor and is:
a member of one of the professional accountancy bodies listed in subsection (4) and under its rules entitled to engage in public practice and not ineligible for appointment as a reporting accountant, or
subject to the rules of one of the professional accountancy bodies listed in subsection (4) in seeking appointment or acting as a statutory auditor under Part 42 of the Companies Act 2006, and under those rules is eligible for appointment as a statutory auditor.
311.Subsection (4) lists the professional accountancy bodies mentioned in subsections (1) to (3). Subsection (5) allows the Secretary of State to amend the list by order.
312.Subsection (6) defines the rules of those bodies, which are rules which the body has power to enforce and which are relevant for the purposes of Part 42 of the Companies Act 2006 (statutory auditors) or this section.
313.Subsection (7) specifies that an individual or a firm may be appointed as a reporting accountant; and that section 1216 of the Companies Act 2006 applies to the appointment of a partnership constituted under the law of England and Wales, Northern Ireland, or any other country or territory in which a partnership is not a legal person.
314.This section specifies the provisions of the Companies Act 2006 which apply to the reporting accountant and to the report as they apply to an auditor of the company and an auditor’s report on the company’s accounts (with any necessary modifications). The provisions, listed in subsection (2) are.
sections 423 to 425 (duty to circulate copies of annual accounts),
sections 431 and 432 (right of member or debenture holder to demand copies of accounts),
sections 434 to 436 (requirements in connection with publication of accounts),
sections 441 to 444A (duty to file accounts with registrar of companies),
section 454(4)(b) and regulations made under that provision (functions of auditor in relation to revised accounts),
sections 499 to 502 (auditor’s right to information), and
sections 505 and 506 (name of auditor to be stated in published copies of report).
315.Subsection (3) specifies that in sections 505 and 506 of the Companies Act 2006 as they apply by virtue of this section in a case where the reporting accountant is a firm, any reference to the senior statutory auditor shall be read as a reference to the person who signed the report on behalf of the firm.
316.This section applies where, in accordance with section 129 a company appoints a reporting accountant to prepare a report in respect of its accounts for any year. The regulator may require the company to cause a qualified auditor to audit its accounts and balance sheet for that year, and to send a copy of the report to the regulator by a specified date. A requirement may not be imposed before the end of the financial year to which it relates. Subsection (4) of the section also defines ‘qualified auditor’ in relation to a company.
317.This section broadly replicates the effect of paragraph 17 of Schedule 1 to the 1996 Act. Subsection (1) provides that this section applies only to industrial and provident societies. Subsection (2) provides that an accountant’s report is required even where the society’s turnover does not exceed a sum specified in the Friendly and Industrial and Provident Societies Act 1968, that would otherwise allow the society to disapply the requirement for an accountant’s report.
318.Subsections (3) and (4) give the regulator a power to require the society to appoint a qualified auditor to audit their accounts, and to send to the regulator a copy of the auditor’s report, when the society has disapplied the requirement to appoint a qualified auditor under section 4A of the Friendly and Industrial and Provident Societies Act 1968. The regulator may only use this power in the year following the year to which the accounts relate.
319.Subsection (5) defines “qualified auditor” and “year of account” for the purposes of this section.
320.This section broadly replicates the effect of part of paragraph 18 of Schedule 1 to the 1996 Act.
321.Subsection (1) specifies that this section relates to non-profit registered providers that are registered charities. Subsection (2) requires such providers to keep accounting records and maintain systems of control in relation to housing activities.
322.Subsection (3) requires such providers to prepare a revenue account giving a true and fair view of its housing activities and a balance sheet giving a true and fair view of its activities as a whole for each accounting period. Subsection (4) requires that the reports specified in subsection (3) must be signed by at least two of the provider’s directors or trustees.
323.Subsection (5) defines “period of account” for the purposes of this section.
324.Subsection (6) specifies that this section does not override other provisions relating to charity accounts in the Charities Act 1993.
325.This section broadly replicates the effect of part of paragraph 18 of Schedule 1 to the 1996 Act.
326.The purpose of this section is to define whether a charity must appoint an auditor to produce a report under section 137 or a reporting accountant to produce a report under section 138 on the accounts required under subsection (3) of section 135.
327.Subsection (2) specifies that if either of the conditions specified in subsection (4) or subsection (5) are met, then the requirements for an auditor’s report under section 137 apply. Otherwise, the requirements for an accountant’s report under section 138 apply.
328.Subsection (4) is the first condition which is that the charity’s gross income in relation to housing activities for a period exceeds the amount specified in section 43(1)(a) of the Charities Act 1993.
329.Subsection (5) is the second condition which is that the charity’s gross income in relation to housing activities for a period is greater than the amount specified in section 43(1) of the Charities Act 1993, and that, at the end of that period, the aggregate value of assets (before deduction of liabilities) that relate to housing is greater than the sum specified in section 43(1)(b) of the Charities Act 1993.
330.Subsections (6) and (7) define “gross income” and “qualified person” for the purposes of this section.
331.This section broadly replicates the effect of part of paragraph 18 of Schedule 1 to the 1996 Act.
332.Where an auditor has been appointed under either section 136 or 139, the auditor’s report on the charity’s accounts must meet the requirements of this section.
333.Subsection (2) requires that the report must state whether the revenue account gives a true and fair view of the charity’s income and expenditure in relation to its housing activities, and whether the balance sheet also gives a true and fair view of the charity’s state of affairs at the end of the period to which it relates.
334.Subsection (3) requires the report to give the auditor’s name and for it to be signed.
335.Subsection (4) specifies that the auditor will carry out such investigations as are necessary to reach an opinion on whether the charity has complied with section 135 (2), and whether the accounts are consistent with the accounting records that the charity is required to keep.
336.Subsection (5) requires the auditor to state in the auditor’s report if the opinion arising from investigations under subsection (4) is that the requirements specified there have not been complied with.
337.Subsection (6) requires that where the auditor has not obtained all of the information or explanations that the auditor thinks necessary for the purposes of the audit, this must be stated in the auditor’s report.
338.This section broadly replicates the effect of paragraph 18A of Schedule 1 to the 1996 Act.
339.The section specifies the requirements for an accountant’s report on the charity’s accounts as required by section 136(3).
340.Subsection (2) specifies that the report must say whether the accounts are consistent with the accounting records of the charity.
341.Subsection (3) specifies that the report must say whether, on the basis of the accounting records, the accounts comply with the requirements of the Charities Act 1993 and that the basis on which an accountant’s report rather than an auditor’s report is permitted, as set out in section 136, has been correctly established.
342.Subsection (4) requires the report to give the reporting accountant’s name and for it to be signed.
343.Subsection (5) requires that where the reporting accountant has not obtained all of the information or explanations that the reporting accountant thinks necessary for the purposes of the report, this must be stated in the report.
344.Where under section 136(3) the charity is required to appoint a reporting accountant, this section provides that the regulator has the power to require the charity also to appoint a qualified auditor to audit the accounts, and to send to the regulator a copy of the auditor’s report. The regulator may only use this power in the year following the year to which the accounts relate.
345.Subsection (4) defines “qualified person” and “period of account” for the purposes of this section.
346.This section requires that a charity must give a person appointed to prepare a report on the charity’s accounts under section 136 or 139, whether they are an auditor or a reporting accountant, access to documents that relate to the charity’s social housing activities, and must provide to that person such information or explanation as they require
347.This section broadly replicates the effect of aspects of paragraph 19 of Schedule 1 to the 1996 Act.
348.Subsection (1) specifies certain offences in relation to the accounting requirements.
349.Subsection (4)specifies that where one of the offences in subsection (1) is committed by a registered provider, then every officer of the registered provider is guilty of an offence. Subsection (5) specifies that it is a defence for an officer to show that he or she has done everything that could be reasonably expected to ensure compliance by the registered provider.
350.Subsection (6) provides that a person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 5 (currently £5000) on the standard scale.
351.Subsection (7) provides that proceedings for the offences under this section may only be brought by, or with the consent of, either the regulator or the Director of Public Prosecutions.
352.This section broadly replicates the effect of sub-paragraph (5) of paragraph 19 of Schedule 1 to the 1996 Act.
353.Where a registered provider has failed to do one of the things listed in section 141(1), the regulator may apply to the High Court for an order for the purpose of remedying the failure. A High Court order for this purpose may make provision for costs.
354.This section broadly replicates the effect of paragraph 19A of Schedule 1 to the 1996 Act, concerning the disclosure of information by auditors and reporting accountants.
355.Subsection (1) specifies that this section applies to information that a person has received while acting either as an auditor or a reporting accountant of a registered provider.
356.Subsection (2) permits persons in receipt of information as described in subsection (1) to disclose that information to the regulator for a purpose connected with the regulator’s functions even if there is otherwise a duty of confidentiality on those persons, and regardless of whether or not the regulator has requested the information.
357.Subsection (3) clarifies that disclosure of information in this way includes expression of an opinion on that information.
358.Subsection (4) defines “reporting accountant” for the purposes of this section.
359.These sections broadly replicate the effects of sections 39 to 45 of the 1996 Act.
360.This section provides that specified steps are effective only if the person specified in respect of those steps has given the regulator notice. The steps and the persons who must give notice in respect of those steps are set out in the table in this section. This section broadly replicates the effect of sections 40(1) to 40(5) of the 1996 Act.
361.The steps and the relevant persons who must give notice are as follows.
362.Any step to enforce security over land held by a registered provider must be notified by the person taking that step. The step must be of a description prescribed for the purpose by the Secretary of State by order - this broadly replicates the effect of section 39(3) of the 1996 Act.
363.The presenting of a petition for the winding up of a registered provider that is either a registered company or an industrial and provident society must be notified by the petitioner.
364.The passing of a resolution for the winding up of a registered provider that is a registered company or an industrial and provident society must be notified by the registered provider. The exception to this is the passing of a resolution for winding up that requires the regulator’s consent under section 162 or 164. This exception broadly replicates the effect of section 40(5) of the 1996 Act.
365.An application for an administration order in respect of a registered provider that is a registered company under paragraph 12 of Schedule B1 to the Insolvency Act 1986 must be notified by the applicant for the administration order.
366.The appointment of an administrator in respect of a registered provider that is a registered company, under paragraph 14 (i.e. the holder of a qualifying floating charge) or paragraph 22 (i.e. the company itself or its directors) of Schedule B1 to the Insolvency Act 1986 must be notified by the person making the appointment.
367.The filing with the court of a copy of a notice of intention to appoint an administrator in respect of a registered provider that is a registered company under paragraph 14 or paragraph 22 of Schedule B1 to the Insolvency Act 1986 must be notified by the person filing the notice.
368.This section ensures that if the regulator presents a petition for the winding up of a registered provider under section 165 this does not trigger a moratorium on the disposal of the provider’s land.
369.Subsection (1) of this section and section 146 provide that a moratorium on the disposal of land by a registered provider begins when one of the specified steps is taken in respect of that registered provider. This broadly replicates the effect of section 42(1) of the 1996 Act.
370.The steps and the person taking them are set out in a table in this section. This table broadly replicates the effect of section 42(2) to 42(4) of the 1996 Act.
371.Subsection (2) requires that where a step specified in the table in this section is taken in respect of a registered provider, the person specified in the table for that kind of step must give the regulator notice that they have taken that step as soon as reasonably practicable. This broadly replicates the effect of section 41(1) of the 1996 Act.
372.Subsection (3) provides that the step taken is not itself invalidated if the notice required in subsection (2) is not given to the regulator but that the end of the moratorium period specified in section 146(2) depends upon the notice being given to the regulator. This subsection broadly replicates the effect of section 41(5) of the 1996 Act.
373.Subsection (4) requires the regulator to give the HCA a copy of any notice received under section 145.
374.The steps and the relevant persons who must give notice are as follows.
375.Any step to enforce security over land held by a registered provider must be notified by the person taking that step if the step is of a description by the Secretary of State by order - this broadly replicates the effect of section 39(3) of the 1996 Act.
376.The presenting of a petition for the winding up of a registered provider that is a registered company or an industrial and provident society (but not by the directors or other governing body of the provider) must be notified by the petitioner.
377.The passing of a resolution for the winding up of a registered provider that is a registered company or an industrial and provident society must be notified by the registered provider.
378.This section provides that if the regulator presents a petition for the winding up of a registered provider under section 165 this does not trigger a moratorium on the disposal of the provider’s land.
379.A decision by the directors or other governing body of a registered provider to move a resolution for the winding up of the registered provider (where it is a registered company or an industrial and provident society) must be notified by the registered provider.
380.The making of an administration order in respect of a registered provider that is a registered company in accordance with paragraph 13 of Schedule B1 to the Insolvency Act 1986 must be notified by the person who applied for the administration order.
381.The appointment of an administrator in respect of a registered provider that is a registered company, under paragraph 14 (i.e. the holder of a qualifying floating charge) or paragraph 22 (i.e. the company itself or its directors) of Schedule B1 to the Insolvency Act 1986 must be notified by the person making the appointment.
382.This section broadly replicates the effect of sections 43(1) to 43(6) of the 1996 Act.
383.Subsection (1) specifies that the moratorium begins when one of the steps specified in section 145 is taken.
384.Subsection (2) specifies that the moratorium ends 28 working days after the regulator has received notice under section 145(2) unless the moratorium is extended as provided for in subsection (3) of this section or cancelled as provided for in subsection (5) of this section. “Working day” is defined by section 275.
385.Subsection (3) allows the regulator to extend the moratorium for a specified period provided that the registered provider’s secured creditors, who the regulator is able to locate following reasonable enquiries, have consented to the extension. There is no limit to the number of extensions that may occur provided the secured creditors consent to those extensions.
386.Subsection (4) requires that, when the moratorium is extended, the regulator must notify the registered provider, and any liquidator, administrator, administrative receiver or receiver appointed in respect of the registered provider or its land, and the HCA.
387.Subsection (5) allows the regulator to cancel the moratorium if it is satisfied that it is unnecessary to make proposals under section 152.
388.Subsection (6) requires the regulator to consult the person who took the step specified in section 145 that triggered the moratorium before cancelling the moratorium as provided for in subsection (5).
389.Subsection (7) requires the regulator to give notice to the registered provider and those of its secured creditors the regulator is able to locate after making reasonable enquiries when the moratorium ends and to provide an explanation of the effects of section 147. The latter requirement does not apply where the regulator has cancelled the moratorium under subsection (5).
390.Subsection (8) sets out that the regulator must notify the HCA when a moratorium ends.
391.Subsection (9) specifies that any further steps taken during a moratorium do not have the effect of either starting a new moratorium or of altering the existing moratorium’s duration as defined in this section.
392.This section broadly replicates the effect of sections 43(7) and (8) of the 1996 Act.
393.Subsection (1) of the section defines when the provisions of this section apply. It applies if a moratorium ends other than by cancellation by the regulator under section 146(5), and a further step specified in section 145 is taken in relation to the same registered provider within 3 years from the end of that moratorium.
394.Subsection (2) provides that a further step of this kind does not automatically trigger a further moratorium.
395.Subsection (3) allows the regulator to impose a further moratorium for a specified period but only if all of the registered provider’s secured creditors whom the regulator is able to locate after making reasonable enquiries consent to that further moratorium.
396.Subsection (4) requires the regulator to notify the registered provider, and any liquidator, administrator, administrative receiver, receiver appointed in respect of the registered provider or its land, and the HCA if it imposes a further moratorium under subsection (3).
397.Subsection (5) provides that the provisions in sections 144 to 159 apply to a further moratorium imposed by the regulator under this section as they would to a first moratorium, except for section 146(2).
398.This section together with section 149 broadly replicates the effect of section 42(2) to 42(6) of the 1996 Act. Section 148 provides that during a moratorium certain disposals of land by a registered provider require the regulator’s prior consent.
399.Subsection (1) provides that the HCA may not give the registered provider a direction under section 32(4) (to repay or reapply grant) and may not take steps to enforce such a direction against the registered provider, during a moratorium.
400.Subsection (2) provides that the registered provider’s land may not be disposed of without the regulator’s prior written consent during a moratorium.
401.Subsection (3) provides that section 149 sets out the exceptions to subsection (1), and are therefore disposals which do not require the regulator’s prior written consent during a moratorium.
402.Subsection (4) provides that the regulator’s consent may be given before the moratorium begins and may be subject to conditions.
403.Subsection (5) provides that the requirement for the regulator’s prior written consent under this section does not prevent a liquidator from disclaiming land as onerous property during a moratorium.
404.Subsection (6) includes within the definition of “land” in this section any present or future interest in rent or other receipts arising from land.
405.Subsection (1) provides that the list of exceptions set out in this section do not require the regulator’s prior written consent under section 148. This broadly replicates the effect of section 42(3) of the 1996 Act.
406.Subsections (2) to (8) set out the following exceptions:
a letting under an assured tenancy or an assured agricultural occupancy
a letting under what would be an assured tenancy or an assured agricultural occupancy but for the provisions of paragraphs 4 to 8, 12(1)(h) and 12ZA to 12B of Schedule 1 to the Housing Act 1988 (this schedule sets out tenancies which cannot be assured tenancies)
a letting under a secure tenancy
a letting under what would be a secure tenancy but for any of paragraphs 2-12 of Schedule 1 to the Housing Act 1985 (this schedule sets out tenancies which are not secure tenancies)
a disposal to which section 81 or 133 of the Housing Act 1988 or section 173 of the Local Government and Housing Act 1989 applies (as consent is already required for disposal by those Acts)
a disposal under the right to buy
a disposal under a tenant’s right to acquire.
This list of exceptions broadly replicates the effect of section 42(3) of the 1996 Act.
407.Section 150 clarifies that a disposal without consent under section 148 is void. A disposal is not void if it is of a single dwelling and the registered provider reasonably believes at the time of the disposal that the buyer intends to use the dwelling as the buyer’s principal residence.
408.This section gives the regulator power to appoint an interim manager during a moratorium. The appointment of an interim manager comes to an end at the end of the moratorium, on a date specified in the appointment, or on the agreement of proposals under section 152. Proposals themselves may provide for the appointment of a manager under section 155.
409.Subsection (5) provides that an interim manager shall have any power specified in the appointment, and any other power in relation to the registered provider’s affairs required by the manager for the purposes specified in the appointment. However, subsection (6) provides that an interim manager’s powers are more limited than those of a manager appointed under section 155; an interim manager may not dispose of land or grant security over land.
410.Subsection (1) gives the regulator the power to make proposals about the future ownership and management of the registered provider’s property during a moratorium with the objective of ensuring that the property will be properly managed by a registered provider. This broadly replicates the effect of section 44(1) of the 1996 Act.
411.Subsection (2) specifies that, when making proposals, the regulator must:
have regard to the interests of all of the registered providers’ creditors (broadly replicates the effect of section 44(2)(b) of the 1996 Act),
as far as reasonably possible, avoid making the position of unsecured creditors worse (broadly replicates the effect of section 44(5) of the 1996 Act).
412.Subsection (3) allows the proposals to include the appointment of a manager as described in section 155 to implement some or all of the regulator’s proposals.
413.Subsection (4) specifies things that the regulator’s proposals must not include. This broadly replicates the effect of section 44(4) of the 1996 Act. The things that may not be included in proposals are:
a preferential debt being paid other than in priority to a non-preferential debt,
any preferential creditor being paid a lesser proportion of their preferential debt than any other preferential creditor.
414.Subsection (5) provides that where the registered provider is a charity, the regulator’s proposals may not require the charity to act outside the terms of its trusts, and that the proposals may provide for the disposal of the registered provider’s accommodation only to another charity whose objects are similar to those of the registered provider. This subsection broadly replicates the effect of section 44(6) of the 1996 Act.
415.Subsection (1) requires the regulator to consult the following before making proposals:
the registered provider (broadly replicates the effect of section 44(2)(a) of the 1996 Act),
its tenants as far as it is reasonably practicable (broadly replicates the effect of section 44(2)(a) of the 1996 Act),
the Financial Services Authority, if the registered provider is an industrial and provident society (broadly replicates the effect of section 44(3)(a) of the 1996 Act),
the Charity Commission, if the registered provider is a registered charity (broadly replicates the effect of section 44(3)(b) of the 1996 Act).
416.Subsection (2) requires the regulator to send a copy of its proposals to-
the registered provider and its officers,
such of its secured creditors as the regulator is able to locate after making reasonable enquires, and
any liquidator, administrator, administrative receiver or receiver appointed in respect of the registered provider or its land.
417.Subsection (3) requires the regulator to make arrangements for the proposals to be brought to the attention of –
the members and officers of the registered provider,
its tenants, and
its unsecured creditors.
418.Subsections (2) and (3) broadly replicate the effect of the provisions of section 44(7) of the 1996 Act.
419.Subsection (4) specifies that the regulator’s proposals have effect if all of the registered provider’s secured creditors to whom proposals were sent agree to those proposals by giving written notice to that effect to the regulator.
420.Subsection (5) provides that further modifications to the proposals may be made and that these shall also have effect if all of the registered provider’s secured creditors to whom the proposals were sent agree to those modifications by giving written notice to that effect to the regulator, and the regulator consents.
421.Subsections (4) and (5) broadly replicate the effect of section 45(1) of the 1996 Act.
422.Subsection (6) requires the regulator to send a copy of the proposals agreed under subsections (4) or (5) to the following:
Housing and Regeneration Act 2008