Housing Associations Part 6 Appendix 1Major Repairs
Contents
1.01Major Repairs – are defined as works to the structure of Association-owned dwellings/property, which are remedial or essential for the dwelling to remain habitable for the tenant. Works can include:
- Major works arising from structural or environmental deterioration;
- Replacement of or major repairs to services or component features of a dwelling which have reached the end of their useful life; or
- Upgrading or replacement works arising from legislative changes occurring since completion of the original scheme or rehabilitation etc.
Generally, Major Repairs exclude improvement works, and day-to-day cyclical maintenance and are such that they do not justify an increase in rent.
1.02Major Repairs Reserve and the Rent Surplus Fund – since the introduction of Mixed Funding for social housing provision, grant funding for Major Repairs had been available from the Department for Social Development (DSD) for certain property classes and types of repair. However, Housing Association Circular - HAC 06/01 - introduced changes to the Major Repairs Reserve and the Rent Surplus Fund.
1.03Background to the Changes - since 1992 Associations were able to transfer up to 80% of their net rental income from ‘relevant accommodation in Class A’ to a reserve for Major Repairs to specified properties. As a result, Class A stock developed a significant Major Repairs Reserve; but the stock with the greatest need for major repairs was not necessarily the stock with a full Major Repairs reserve set against it. Associations were unable to transfer their major repairs reserve across properties, so the DSD sometimes had to provide Housing Association Grant (HAG) for Major Repairs to relevant accommodation in Class A that did not have a full Major Repairs reserve set against it. This had the effect of reducing the amount of HAG available for new schemes. In an attempt to ensure better value for money - and in the light of the continuous improvement concept - the DSD took a very critical look at the Major Repairs Reserve with a view to redressing the situation described.
2.00 Floating major repairs reserve2.01Floating Major Repairs Reserve - From 1 April 2001 the limitation on Associations as regards designating their major repairs reserve against specific properties ended and the major repairs reserve accumulated to date, as well as future contributions, was allowed to float. Associations are free to draw on this ‘float’ to fund major repairs on any ‘relevant’ properties that have been funded by HAG or from the property disposals fund. The detail of this will be set out in the Rent Surplus Fund Guidance Notes.
2.02Associations are reminded - that they are required to have a properly resourced planned maintenance and re-improvement programme to maximise the lettable life of their housing stock.
3.00 Withdrawal of major repairs HAG3.01Withdrawal of Major Repairs HAG - Given the creation of the floating reserve the DSD decided to generally withdraw the provision of grant for Major Repairs. However if an Association can clearly demonstrate that its floating fund, its free reserves and its ability to borrow privately are insufficient, the NIHE (DPG) may act, exceptionally, as ‘funder of last resort’ to enable Major Repairs to be undertaken.
3.02Any queries - on the content of this Appendix should be addressed to:
Northern Ireland Housing Executive
Development Programme Group
4th Floor, The Housing Centre
2 Adelaide Street
Belfast BT2 8PB
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