Housing (Miscellaneous Provisions) Act 2014
26. (1) As soon as practicable after a house is sold under this Part, the housing authority shall, subject to such regulations as may be made under section 30, make an order (in this Part referred to as a “charging order”) in the prescribed form, charging the house in the terms specified in this section for the period specified in the order (in this Part referred to as the “charged period”), which period may be reduced in accordance with section 28 .
(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”) in the house equivalent to the percentage (referred to in this Part as the “discount”) by which the purchase price of the house was reduced for the purposes of calculating the purchase money payable by the purchaser.
(3) (a) Subject to paragraph (b), the charged share shall be reduced annually by a proportion equivalent to 2 per cent of the total equity in the house (which proportion is referred to in this section as an “incremental release”), on the anniversary of the vesting date, in respect of each complete year after that date during which the terms and conditions of the transfer order and the charging order have been complied with, until whichever of the following first occurs—
(i) subject to section 29, the first resale of the house,
(ii) the payment by the purchaser to the housing authority of the full amount of the outstanding charge in accordance with section 28(1)(a),
(iii) in the case where a payment has been made to the housing authority under section 28(1)(b), the application of an incremental release under the charging order that reduces the outstanding charged share to zero, or
(iv) subject to section 27, the expiration of the charged period.
(b) The reduction of the charged share for the period of 5 years from the vesting date shall be cumulative and shall not apply until the expiration of that period, but if during that period the terms and conditions of the transfer order and the charging order have not been complied with by the purchaser in any of those years, then the reduction of the charged share for that period shall not take into account a reduction otherwise due in respect of any years for which there has not been such compliance.
(c) Where under paragraph (b) the reduction of the charged share for the period concerned is not to be taken into account, then the housing authority shall, as soon as practicable thereafter, notify the purchaser in writing of that fact and the reasons why it is not being taken into account.
(4) The housing authority shall, at any time where requested by the purchaser, give a statement in writing, in the prescribed form, to the purchaser indicating, in respect of the charge in the house—
(a) the charged share specified in the charging order,
(b) the accumulated per cent of incremental releases that have been applied to the charged share under this section, including incremental releases applied under section 28(1)(b),
(c) the accumulated per cent of incremental releases in respect of the charged share that have been suspended under section 27,
(d) the outstanding charged share, and
(e) the remaining duration of the charged period.
(5) A charging order shall be deemed to be a legal mortgage under Part 10 of the Land and Conveyancing Law Reform Act 2009 and to have been executed, on the vesting date for the house, in favour of the housing authority for a charge in the terms provided for in this section.
(6) Accordingly, the housing authority shall, as on and from the making of the charging order—
(a) be deemed to be a mortgagee of the house for the purposes of Part 10 of the Land and Conveyancing Law Reform Act 2009, and
(b) have, in relation to the charge referred to in subsection (5), all the powers conferred by that Act on mortgagees under mortgages made by deed.
(7) 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 26(2).
(8) A charging order affecting a house 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 that Act as the owner of the land.
(9) A housing authority may, subject to subsection (10), 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.
(10) A housing authority may only enter into an agreement referred to in subsection (9) if it considers that the agreement will—
(a) enable a tenant to whom it is proposing to sell a house under this Part to obtain an advance of moneys from the holder, society or institution referred to in subsection (9) for the purposes of purchasing the house, or
(b) enable a purchaser—
(i) to refinance an existing advance of moneys from the holder, society or institution referred to in subsection (9), or
(ii) to obtain a further advance of moneys from the holder, society or institution referred to in subsection (9) for any purpose.
(11) Any amount that becomes payable to a housing authority under section 27 or 29 , as the case may be, may, without prejudice to any other power in that behalf, be recovered by the authority from the person concerned as a simple contract debt in any court of competent jurisdiction.
(12) 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 or section 28 of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010.
(13) (a) On the occurrence of the earlier of the events specified in subsection (3) (a) and subject to the terms and conditions of the transfer order and the charging order having been complied with, the housing authority shall, where requested to do so by the 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 a purchaser under this section or under section 27 , 28 or 29 .