C1Part 2Regulation of Social Housing
Chapter 4Registered providers
General provisions
I1122Payments to members etc.
1
This section restricts the making of gifts, and the payment of dividends and bonuses, by a non-profit registered provider to—
a
a member or former member of the registered provider,
b
a member of the family of a member or former member,
c
a company which has as a director a person within paragraph (a) or (b).
2
A gift may be made, and a dividend or bonus may be paid, only if it falls within one of the following permitted classes.
3
Class 1 is payments which—
a
are in accordance with the constitution of the registered provider, and
b
are due as interest on capital lent to the provider or subscribed in its shares.
4
Class 2 is payments which—
a
are paid by a fully mutual housing association (within the meaning of section 1(2) of the Housing Associations Act 1985 (c. 69)),
b
are paid to former members of the association, and
c
are due under—
i
tenancy agreements with the association, or
ii
agreements under which the former members became members of the association.
5
Class 3 is payments which—
a
are in accordance with the constitution of the registered provider making the payment (“the payer”), and
b
are made to a registered provider which is a subsidiary or associate of the payer.
F15A
Class 4 is payments which—
a
are in accordance with the constitution of the registered provider,
b
are paid for the benefit of tenants of the provider, and
c
are in any particular case paid to assist the tenant to obtain other accommodation by acquiring a freehold, or long-leasehold, interest in a dwelling.
5B
For the purposes of subsection (5A)—
“ long-leasehold interest ”, in relation to a dwelling, means the lessee's interest under a lease of the dwelling granted, for a premium, for a term certain exceeding 21 years;
“ acquiring ”, in relation to a long-leasehold interest in a dwelling, includes acquiring by grant and acquiring by assignment.
6
If a registered company or industrial and provident society contravenes this section—
a
it may recover the wrongful gift or payment as a debt from the recipient, and
b
the regulator may require it to take action to recover the gift or payment.
F27
The Secretary of State may by order amend this section for the purpose of—
a
adding to the permitted classes, or
b
modifying or removing a permitted class added by order under this subsection.
8
Before making an order under subsection (7), the Secretary of State must consult—
a
the Charity Commission,
b
the regulator, and
c
one or more bodies appearing to the Secretary of State to represent the interests of registered providers.
Pt. 2 modified (1.4.2012) by Localism Act 2011 (c. 20), s. 240(2), Sch. 16 para. 69(2); S.I. 2012/628, art. 6(i) (with arts. 911141517)