Band 2 - Off the Shelf Purchases (OTS)

3.30  Prequalifications are the major scheme development ‘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 the Tranche payment of Grant at Acquisition stage.  

Each ‘step’ or ‘milestone’ is an essential part of a project and uncertainty or failure in any of the ‘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 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 site and properties 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 on Acquisition Issues & Valuations.

Consultation:

Associations are statutorily obliged to consult secure tenants on decisions of housing management as defined in Article 40(2) of the Housing (Northern Ireland) Order 1983.  However to secure best value and enhance public involvement when making decisions, the range of issues on which Associations should consult needs to be more extensive. For further guidance on Consultation.

Land/Property:

Mostly covered by certifications on scheme forms.  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 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 65 years for New Build schemes at the date of start on site.

Code for Sustainable Homes:

Off the Shelf properties are not required to meet the Code for Sustainable Homes rating level ‘3 stars’ or better. However, where an OTS does meet the CSH standard the supplementary multiplier will be allowed but only paid on production of the certificate of compliance. In addition, Associations should be aware that, from 30 June 2008, Energy Performance Certificates (EPCs) are required.

Planning:

In this type of scheme, the responsibility for obtaining all necessary permissions rests with the Developer/ Contractor.  However, Associations must be satisfied that all the necessary permissions have been obtained.

Site Appraisal:

In this type of scheme, the responsibility for assessing the site and ground conditions rests with the Developer/ Contractor. However, Associations must be satisfied that the scheme complies with DSD’s Design Standards.

Consultants:

The Association must ensure that the completed properties have been inspected by a consultant to confirm that it is satisfied the property(s) have been completed to DSD’s required standards.  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. 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.