46.— (1) As soon as practicable after a dwelling to which this Part applies is sold under an incremental purchase arrangement, the housing authority or approved body, as appropriate, shall, subject to such regulations as may be made under section 49, shall make an order (in this Part referred to as a “charging order”), in the prescribed form, charging the dwelling 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 or approved body concerned in respect of an undivided percentage share (in this Part referred to as the “charged share”), calculated in accordance with subsection (3), in the dwelling 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 dwelling at the time of sale to the purchaser and the purchase money, and

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

(4) (a) Subject to paragraph (b) and section 47, 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 transfer order, in respect of each complete year after that date during which a purchaser or a member of his or her household has been in occupation of the dwelling as his or her normal place of residence, until the earlier of—

(i) subject to section 48, the first resale of the dwelling, or

(ii) subject to section 47, the expiration of the charged period.

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

(5) The housing authority or approved body, as the case may be, shall, at any time where requested by the purchaser, give a statement in writing, in the prescribed form, to the 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 dwelling, in favour of the housing authority or approved body, as appropriate, for a charge in the terms provided for in this section.

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

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

(b) have, in relation to the charge referred to in subsection (6), all the powers conferred by those Acts on mortgagees under mortgages made by deed.

(8) Where a housing authority or an approved body 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 46 (2) of the Housing (Miscellaneous Provisions) Act 2009.

(9) A charging order affecting a dwelling 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 or an approved body 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 or an approved body may only enter into an agreement referred to in subsection (10) if it considers that the agreement will—

(a) enable an eligible household to whom it is proposing to sell a dwelling to which this Part applies under an incremental purchase arrangement to obtain an advance of moneys from the holder, society or institution referred to in subsection (10) for the purposes of purchasing the dwelling, or

(b) enable a 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 or an approved body under section 47 or 48 may, without prejudice to any other power in that behalf, be recovered by the authority or approved body, as the case may be, 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 transfer order and of the charging order having been complied with, the housing authority or approved body, as the case may be, shall, where requested to do so by the purchaser, execute a deed of discharge in respect of the charging order.

(b) The housing authority or approved body, as the case may be, 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 a purchaser under this section or under section 47 or 48.