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Social Housing Act, 2008 (Act No. 16 of 2008)

Rules

Rules in respect of the Transfer of Social Housing Stock or Rights and the Disposal of Social Housing Stock, 2014

Part II : Transfer and Disposal of Social Housing Stock in terms of Regulation 13(2) and Regulation 14

4. Procedure for transfers and disposals

 

4.1 No social housing institution shall transfer or dispose of social housing stock to another social housing institution save with the express written consent of the Regulatory Authority.

 

4.2 A social housing institution that intends to transfer or dispose social housing stock to another social housing institution shall apply in writing to the Regulatory Authority for approval in respect of the proposed transfer. Such application shall be made on Form A for the purposes of a transfer and on Form B for the purposes of a disposal.

 

4.3 For the remainder of this rule—
4.3.1 an application to transfer and an application to dispose shall be referred to as "the transfer application";
4.3.2 the parties to the intended transfer or disposal shall be referred to as:
4.3.2.1 the "transferor" being a reference to the applying party; and
4.3.2.2 the "transferee" being the party to whom the social housing stock is to be transferred or disposed.

 

4.4 The transfer application shall contain at least the following:
4.4.1 full details of the transferor and the transferee;
4.4.2 a description of the nature of the proposed transfer;
4.4.3 details of whether the social housing stock was acquired, developed or refurbished by the transferor;
4.4.4 details of the funding model that was used to fund the project which is the subject of the transfer application. The transferor must provide the Regulatory Authority with a detailed breakdown of the funding procured for the project indicating the total funding procured in terms of the Institutional Subsidy Programme and the RCG programme, provincial funding, debt finance and/or equity finance;
4.4.5 full details of the social housing stock which is the subject of the proposed transfer, including the number of units or buildings comprising the social housing stock, the number of units which are occupied and unoccupied, and the market value of the social housing stock (including a breakdown of the value per unit or building, where the value per unit is not reasonably ascertainable), as determined by a qualified independent property valuer;
4.4.6 a copy of the curriculum vitae of the property valuer referred to in rule 4.4.5;
4.4.7 a copy of the valuation report prepared by the independent property valuer referred to in rule 4.4.5;
4.4.8 details of the price (if any) which the transferee will pay to take transfer of the social housing stock which is the subject of the transfer application (including a breakdown of the price per unit or building) taking cognisance of the fact that the transferor may not gain a profit as a result of the transfer;
4.4.9 a copy of the tenant or membership roll referred to in regulation 3(7)(f) of the Regulations in respect of the social housing stock which is the subject of the proposed transfer;
4.4.10 details of the rent payable by tenants residing in the social housing stock which is the subject of the transfer;
4.4.11 the payment history by the tenants of their rentals;
4.4.12 detailed reasons for the proposed transfer or disposal;
4.4.13 detailed reasons why the Regulatory Authority should approve the transfer or disposal;
4.4.14 implications of the proposed transfer or disposal on the rights of tenants;
4.4.15 a draft transfer or disposal agreement (as the case may be) recording the provisional terms and conditions between the parties in relation to the proposed transfer, which must stipulate, amongst other things, that:
4.4.15.1 the transferor will ensure that any large scale maintenance and any other maintenance or repairs as agreed to between the parties or as determined by the Regulatory Authority will be carried out by the transferor prior to the transfer or disposal;
4.4.15.2 in the case of a proposed transfer, that such transfer will not negatively affect the rights enjoyed by existing tenants and the transferee will administer the social housing stock substantially on the same terms and conditions applicable prior to the transfer; and
4.4.15.3 in the case of a proposed disposal and only where the social housing stock is to be sold on the open market, a detailed plan explaining and committing to a reasonable relocation plan to alternative social housing units for tenants who qualify for such social housing, such plan having to adequately address the accommodation needs of all such tenants;
4.4.16 a letter from the proposed transferee on its letterhead confirming its intention to take transfer of the social housing stock which is the subject of the proposed transfer, motivating why the transferee is suitable to take transfer of the social housing stock and explaining in detail how it will manage the social housing stock, and how, where applicable, it will comply with the obligations imposed on social housing institutions by the Act and the Regulations (particularly the qualifying criteria set out in regulation 3 of the Regulations);
4.4.17 sworn undertakings from the transferor and transferee that should the transfer application be approved by the Regulatory Authority, the transferor and the transferee will conclude a transfer agreement which is in all material respects the same as the draft transfer agreement referred to in rule 4.4.15 and that it will not infringe upon or terminate the security of tenure of existing residents who meet the terms and conditions of their tenancy prior to, during, and, in the case of the transferee, after the transfer;
4.4.18 a sworn undertaking from the transferee, except where the transaction is a disposal which may result in the stock being sold on the open market, that should the application be approved by the Regulatory Authority and the transfer is implemented, the transferee will safeguard and maintain the social housing stock which is the subject of the transfer;
4.4.19 proof that the transferor consulted with the tenants or a committee mandated by the tenants to inform them of the proposed transfer or disposal, explained its implications in relation to the rights of the tenants and invited the tenants to provide it with comments in writing in relation to the proposed transfer or disposal;
4.4.20 copies of any written comments or objections furnished to the transferor by the tenants or a committee of representatives mandated by the tenants in relation to the proposed transfer or disposal;
4.4.21 where the transferor received objections from the tenants or a committee of representatives mandated by the tenants:
4.4.21.1 a detailed explanation of the steps which the transferor and/or the transferee took or will take to resolve the objections;
4.4.21.2 confirmation of whether the objections have been resolved; and
4.4.21.3 where the transferor indicates that the objections have been resolved, proof of and the nature of such resolution;
4.4.22 where applicable, proof that the transferor notified any private funder to whom money is owed by the transferor in respect of the relevant project, of the proposed transfer and written proof of the consent of the private funders to the proposed transfer or disposal;
4.4.23 where the transferor seeks to transfer the social housing stock on the basis that it is no longer financially sustainable for it to manage such stock, it shall explain how the transferee shall ensure it will manage the social housing stock in a financially sustainable manner with reference to the criteria for financial sustainability contemplated in the Regulations;
4.4.24 in the case of a proposed disposal:
4.4.24.1 details of the municipality in whose area of jurisdiction the social housing stock which is the subject of the proposed disposal is situated;
4.4.24.2 submissions on whether there is sufficient social housing stock in the area in which the social housing stock which is the subject of the application is situated and whether there is any need to retain the social housing stock which is the subject of the disposal application as social housing.

 

4.5 Within 90 (ninety) days of receipt of the application, the Regulatory Authority shall, having considered the transfer application and such other factors as may be appropriate in the circumstances:
4.5.1 grant the transfer application with or without conditions, or
4.5.2 refuse the application.

 

4.6 The Regulatory Authority, on any reasonable ground, may refuse an application to transfer or dispose of social housing stock including but not limited to, the applicant having allowed the project to fall into a state of disrepair or wilfully damaged the relevant project thereby strengthening its application for such transfer or disposal.

 

4.7 The Regulatory Authority shall, within 14 (fourteen) days of taking its decision, notify the transferor in writing of its decision and, where it has refused the transfer application, it shall, upon written request, provide the reasons for its decision.

 

4.8 Should the Regulatory Authority approve the application, the transferor and transferee shall ensure that the transaction is executed in accordance with all relevant legislation applicable to the transfer of immovable property.

 

4.9 If the Regulatory Authority approved a transfer application subject to conditions (as provided for in rule 4.5.1), and one or more of such conditions must be fulfilled prior to the transfer or disposal, then the transaction may not be effected until such time as the conditions have been fulfilled.

 

4.10 The Regulatory Authority shall update the register accordingly to reflect the transfer or disposal of the social housing stock to the transferee.

 

4.11 The Regulatory Authority may appoint an independent accountant and a public auditor to consider the valuation report referred to in rule 4.4.7 and to independently value the social housing stock. Where the independent accountant and public auditor determines that the value of the social housing stock to be different to that of the value reflected in the valuation report, the Regulatory Authority shall be entitled to rely on the value furnished to it by the independent accountant and public auditor appointed for the purposes of considering the transfer application.