Housing (Miscellaneous Provisions) Act 2009

74

Charging order.

74.— (1) As soon as practicable after an apartment is sold to an apartment purchaser under this Part, the housing authority shall, subject to such regulations as may be made under section 77, make an order (in this Part referred to as a “charging order”), in the prescribed form, charging the apartment in the terms specified in this section for the period specified in the order (in this Part referred to as the “charged period”).

(2) The charging order shall create a charge in favour of the housing authority in respect of an undivided percentage share (in this Part referred to as the “charged share”), calculated in accordance with subsection (3), in the apartment which charged share shall be reduced in accordance with subsection (4).

(3) The charged share is calculated in accordance with the following formula:

Y x 100

Z

where—

(a) Y is the difference between the purchase price of the apartment at the time of sale to the apartment purchaser and the purchase money, and

(b) Z is the purchase price of the apartment at the time of sale to the apartment purchaser.

(4) (a) Subject to paragraph (b) and section 75, the charged share shall be reduced in equal proportions (referred to in this section as “ incremental releases ”) applied annually on the anniversary of the date of the apartment assignment order in respect of each complete year after that date during which an apartment purchaser or a member of his or her household has been in occupation of the apartment as his or her normal place of residence, until the earlier of—

(i) subject to section 76, the first resale of the apartment, or

(ii) subject to section 75, the expiration of the charged period.

(b) The reduction of the charged share for the period of 5 years from the date of the apartment assignment order shall be cumulative and shall not apply until the expiration of that period, provided the apartment purchaser or a member of his or her household has been in occupation of the apartment as his or her normal place of residence for that period.

(5) The housing authority shall, at any time where requested by the apartment purchaser, give a statement in writing in the prescribed form, to the apartment purchaser indicating the accumulated amount of incremental releases that have been applied under the charging order.

(6) A charging order shall be deemed to be a mortgage made by deed within the meaning of the Conveyancing Acts 1881 to 1911 and to have been executed, at the time of the sale of the apartment, in favour of the housing authority for a charge in the terms provided for in this section.

(7) Accordingly, the housing authority shall, as on and from the making of the charging order—

(a) be deemed to be a mortgagee of the apartment for the purposes of the Conveyancing Acts 1881 to 1911, and

(b) have, in relation to the charge referred to in subsection (8), all the powers conferred by those Acts on mortgagees under mortgages made by deed.

(8) Where a housing authority makes a charging order, it shall, as soon as practicable thereafter, cause the order to be registered in the Registry of Deeds or the Land Registry, as appropriate, and it shall be a sufficient description of the charge in respect of which the order is being registered to state that charge to be the charge referred to in section 74 (2) of the Housing (Miscellaneous Provisions) Act 2009.

(9) A charging order affecting an apartment which is registered land within the meaning of the Registration of Title Act 1964 shall be registrable as a burden affecting such land whether the person named in the order as the owner of the land is or is not registered under the said Act as the owner of the land.

(10) A housing authority may, subject to subsection (11), enter into an agreement with a holder of a licence under the Central Bank Act 1971, a building society or other financial institution that a charge proposed to be created by it by a charging order shall have a priority, as against a mortgage or charge proposed to be created in favour of that holder, society or institution, that is different from the priority the charge would otherwise have if this subsection had not been enacted.

(11) A housing authority may only enter into an agreement referred to in subsection (10) if it considers that the agreement will—

(a) enable a tenant to whom it is proposing to sell an apartment under this Part to obtain an advance of moneys from the holder, society or institution referred to in subsection (10) for the purposes of purchasing the apartment, or

(b) enable an apartment purchaser—

(i) to refinance an existing advance of moneys from the holder, society or institution referred to in subsection (10), or

(ii) to obtain a further advance of moneys from the holder, society or institution referred to in subsection (10), for any purpose.

(12) Any amount that becomes payable to a housing authority under section 75 or 76 , as the case may be, may, without prejudice to any other power in that behalf, be recovered by the housing authority from the person concerned as a simple contract debt in any court of competent jurisdiction.

(13) For the avoidance of doubt, neither a charging order nor a charge that arises under it shall be regarded as a conveyance for the purposes of section 3 of the Family Home Protection Act 1976.

(14) (a) On the occurrence of the earlier of the events specified in subsection (4)(a) and subject to the terms and conditions of the apartment assignment order and of the charging order having been complied with, the housing authority shall, where requested to do so by the apartment purchaser, execute a deed of discharge in respect of the charging order.

(b) The housing authority shall be liable for any expenses incurred in the execution and registration of a deed of discharge but shall not otherwise be liable for any expenses incurred by an apartment purchaser under this section or under section 75 or 76 .