Band 1 - Existing Satisfactory Purchases (ESPs)

3.29  Prequalifications are the major scheme development ‘steps’ or ‘milestones’ that an Association must comply with in order to meet the agreed timetable in the Social Housing Development Programme (SHDP) and the DSD’s project approval criteria.  Each ‘step’ or ‘milestone’ represents what must be achieved or obtained at a particular stage and, in association with other Certifications, allows the Association to apply for project approval and payment of Grant at Acquisition stage.    

Each ‘step’ or ‘milestone’ is an essential part of a project and uncertainty or failure in any of these steps can delay or put at risk the project.  It is essential that the Association works with the NIHE (DPG), various stakeholders, its Solicitor and Consultants on all the Prequalifications.  Each ‘step’ or ‘milestone’ completed or still to be completed allows the progress of a scheme to be measured by the Association.  

Housing Need:

Housing need must be already identified and site/ scheme included in the Social Housing Development Programme (SHDP). The Association will require a letter from the NIHE supporting the need.  The Association will of course have to write to the NIHE requesting support for the Association’s proposals, a copy of which shall be retained on file. The breakdown of property types on both letters must correspond.

Valuation:

This will require the valuation of the property prepared by an independent valuer engaged by the Association.  The Association will of course have to fully brief the valuer on the site, site boundaries, development constraints etc.  For further guidance Acquisition Issues & Valuations.

Consultation:

Associations should note that consultation may not, as a rule, be required for Existing Satisfactory Purchases unless a number of ESPs are planned for a particular area or an ESP is likely to be considered novel or contentious.

For more information on consultation.

Land/ Property:

Legal Aspects - All schemes with an Acquisition Stage will require the normal pre-purchase legal and site/ property checks by the Association’s Solicitor.  The land/ property to be acquired must offer good title.  Details of any restrictions, easements, covenants, pre-emption clauses or any provisions of the contract, draft lease or conveyance which might adversely affect the proposed scheme or its future use must be referred to the NIHE (DPG) for notification prior to the Association being committed to the acquisition of the property.

Leasehold - The interest to be acquired must be freehold or leasehold for a term of years certain.  Associations should always seek to acquire the vendor’s full interest in a site or property, rather than accepting a newly created lease or sub-lease.  In other words:

Where, however, an Association finds it impossible to negotiate a purchase on the above terms and judges that a HAG-subsidised scheme should still proceed on that site or property, the Association may acquire a newly created lease or sub-lease (depending on whether the vendor owns the freehold or leasehold interest, respectively). The terms of such a lease or sub-lease should be as long as possible and at least 35 years for Rehabilitation schemes.

Code for Sustainable Homes:

ESPs are not required to meet the Code for Sustainable Homes rating level ‘3 stars’ or better. However Associations should be aware that, from 30 June 2008, Energy Performance Certificates (EPCs) are required.

Planning:

Not normally, an issue for ESPs, however alterations may have been carried out since the original planning permission was granted. It is the Association’s responsibility to check the position and obtain all necessary permissions as required.

Tender Stage:

In obtaining tenders for the works the Association must select the procurement method it considers most cost effective, subject to the criteria and advice contained in Procurement

On receipt of tenders the Association must reassess the scheme costs.  If scheme costs at tender stage exceed the limit for works to ESPs the Association will need to consider reductions. More information on Scheme Types

The Association needs to take a view of:

Consultants:

The Association must appoint Consultants to assess the condition of the existing dwelling and its environs, and to prepare and cost proposals or necessary repairs/ checks/ upgrading etc to meeting the proposed need. Appointments must meet with the requirements of the Procurement

Economic Appraisal:

An Economic Appraisal must be prepared to take account of alternative sites and proposed solutions for the intended need.  As part of the EA process, Associations would be expected to reconsider the suitability of any property, where the identified repairs/ checks/ upgrading works would not achieve the Decent Homes Standard. The EA should include any qualitative benefits the project may bring to sustaining local communities.

Where costs exceed TCI levels, reasons for exceeding TCI must be provided.