DECENT HOMES LOANS
POLICY DOCUMENT
Strategic Housing Service
Author:
Responsible Officer:
Portfolio:
Date:
Version:
Review Date:
Principal Housing Officer (Private Sector)
Strategic Housing Manager
Housing Strategy and Regeneration
April 2012
1.0
April 2013
DECENT HOMES LOANS POLICY
Contents
Page
Foreword
3
1.0 Introduction
4
2.0 Funding Decent Homes Loans
4
3.0 Eligibility for Decent Homes Loans
4
3.1
Eligible Applicants
4
3.2
Eligible Properties
5
4.0 General Conditions of Decent Homes Loans
6
5.0 Conditions for the Council to accept an application
8
6.0 Conditions of Approval of Decent Homes Loans
9
7.0 Conditions of Payment of Decent Homes Loans
10
8.0 Conditions relating to repayment of loans
11
9.0 Complaints
11
10.0 Policy Revision
12
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DECENT HOMES LOANS POLICY
FOREWORD
This document sets out a new Decent Homes Loans Policy outlining the way in which
Mansfield District Council will provide financial assistance to vulnerable homeowners.
Decent Homes Loans were first set out in the overarching Private Sector Housing
Renewal Strategy 2011-2014 approved 17 March 2011.
This document contains information on eligibility for loan assistance, conditions relating to
applications, approval and payment of loan assistance and other relevant conditions and
requirements.
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DECENT HOMES LOANS POLICY
1.0
INTRODUCTION
1.1
The Private Sector Housing Renewal Strategy 2011-14 outlines the basis on
which the Council will provide assistance for improving housing conditions within
the district. One of the recognised ways of delivering assistance to meet the
objectives of the Renewal Strategy is to provide Decent Homes Assistance
Loans to improve non-decent homes occupied by vulnerable owner-occupiers.
1.2
Decent Homes Assistance Loans are interest free and 100% recoverable through
a charge on the property. They are provided to help owner-occupied homes meet
the government’s decent homes standard. A decent home is one which is free
from serious hazards, in good repair, has reasonably modern facilities and has
effective and efficient heating and insulation.
2.0
FUNDING DECENT HOMES LOANS
2.1
The award of financial assistance in the form of a Decent Homes Loan under this
policy is subject to the availability of funding and is at the discretion of the
Council.
3.0
ELIGIBILITY FOR DECENT HOMES LOANS
3.1
Eligible Applicants
3.1.1
In order to qualify applicants must be aged 60 or over and/or disabled and must
also be in receipt of a qualifying means tested benefit.
3.1.2
A qualifying means tested benefit is any of the following:
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Income support
Housing Benefit
Council Tax Benefit (excludes single person discount)
Child tax credit with income less than £16,950
Guaranteed Pension Credit (excludes savings credit)
Working tax credit with income less than £16,950
Income based Job Seekers Allowance
Income based Employment and Support Allowance
3.1.3
The present Welfare Support system is being reformed and from 1 April 2013
Council Tax Benefit will be replaced by a means tested Local Council Tax
Discount. From October 2013 the majority of the qualifying benefits listed in
3.1.2 above will be replaced by Universal Credit and recipients will gradually
migrate over to Universal Credit if they are of working age.
3.1.4
Where there are changes to the names, types and levels of qualifying benefits,
including those planned changes outlined in paragraph 3.1.3 above, the Policy
will be amended accordingly to reflect such changes.
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DECENT HOMES LOANS POLICY
3.1.5
The Applicant must also be the occupier and must have owned and occupied the
property as his/her only or main residence for three years prior to making an
application. The property must be his/her only residence. Proof of ownership will
be required as part of the application process.
3.2
Eligible Properties
3.2.1
Eligible work is any work that is deemed necessary by the Council to help bring
the property up to the government’s decent homes standard. The property must
therefore be assessed as non-decent by the Council to be eligible for loan
assistance. In some circumstances when assistance is offered it may only be
possible to make a property partially decent within the limitations of the loan
amount. In such circumstances, priority will be given to works to address
Category 1 hazards within the property within the limits of the maximum loan
amount. Category 1 hazards are those hazards that are assessed as being the
most serious in accordance with the Housing, Health and Safety Rating System
(HHSRS).
3.2.2
The Council will determine the eligible works and will produce a schedule of
works on which the loan will be based.
3.2.3
Loan assistance is available for work to an Applicant’s main dwelling house only,
not generally for garages, outbuildings or conservatories.
4.0
GENERAL CONDITIONS OF DECENT HOMES LOANS
4.1
Decent Homes Loans are available up to a maximum of £10,000. A minimum
loan amount of £2,000 will apply. The maximum and minimum loan amounts
include any preliminary or ancillary charges. Such charges include the Council’s
legal fees associated with completing a Land Registry search and placing a legal
charge on the property with the Land Registry.
4.2
In certain cases the Council may require a current valuation of the property with a
view to establishing available equity. The cost of carrying out such a valuation
will be included as preliminary costs and will be included within the loan amount.
Where there is insufficient equity to accommodate the loan amount, after
considering any mortgage and/or loan secured against it, a loan will not be
approved.
4.3
The maximum and minimum amounts of loan assistance include any VAT due on
the works, ancillary and preliminary charges and a contingency sum of £1,000. A
contingency sum of £1,000 will be allowed within each loan to allow for any
additional or unforeseen works.
4.4
Where there are additional or unforeseen works and where the cost of eligible
works change, the Council may re-determine the estimated expense and the
amount of the loan. The charge placed against your property will reflect the redetermined loan amount. Where the final cost of eligible works plus any ancillary
charges and VAT exceed the maximum loan amount, the Council will cover any
costs in excess of the maximum loan amount.
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DECENT HOMES LOANS POLICY
4.5
All Applicants who enquire about Decent Homes Loans will be advised to take
independent specialist financial advice before applying for assistance. The
Council do not in any way provide financial advice in respect of loan assistance.
4.6
The Council advises all potential Applicants to explore all other means of funding
the works to their home and to seek professional advice from a solicitor or
financial advisor before making a loan application.
4.7
Decent Homes Loans are offered in the form of an interest free loan. Applicants
will not be required to pay regular monthly payments.
4.8
The loan will be registered as a legal charge on the property with the Land
Registry and will be repayable to the Council when the property is disposed of
(see section 8.0).
4.9
The loan recipient can select to repay either a proportion of the loan or the total
loan amount to the Council at any time prior to the property being disposed of.
Where a proportion of the loan is paid to the Council the Applicant will be
responsible for the payment of any administrative charges associated with
placing a revised charge on the property.
4.10
Decent Homes Loans will only be offered where the Applicant is aged 18 or over
on the date of the application. This age restriction is only relevant to those
Applicants that are disabled and in receipt of means tested benefits.
4.11
Decent Homes Loans will not be available for caravans or canal boats.
4.12
The Applicant is responsible for selecting contractors to complete the works and
any contractual relationship will be between the Applicant and the contractor.
Whilst the Council cannot recommend contractors, we can provide a list of
contractors that have completed similar work for the Council previously. The
Applicant may select contractors from this list to quote or they may select their
own contractors or a mixture of both.
4.13
A ten year period must pass following completion of works before a subsequent
application for loan assistance can be made to the Council.
5.0
CONDITIONS FOR THE COUNCIL TO ACCEPT AN APPLICATION
5.1
An application for a Decent Homes Loan will be accepted by the Council
providing it includes the detail outlined below.
5.2
A completed application form with signatures from the Applicant/s and all
persons with an owner’s interest. If the application is a joint application, the
signatures of all relevant parties should be present on the application form. The
application must be dated.
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DECENT HOMES LOANS POLICY
5.3
A signed and dated ownership certificate, confirming the owners’ intention to
occupy the dwelling after the eligible work is complete up to the point the
property is disposed of.
5.4
A signed and dated certificate of title confirming the Applicant’s interest in the
property.
5.5
At least three estimates must be provided from genuine contractors. If the
Applicant intends to carry out the works themselves or if a member of their family
intends to complete the works, the Applicant must detail the amounts and costs
of materials needed to carry out the work.
5.6
Proof of current building insurance for the property.
5.7
Evidence of permission from a bank and/or building society for a loan to be
applied for, where relevant e.g. where there is a mortgage and/or loan secured
against the property. Where there is a mortgage and/or loan secured against the
property the Applicant must provide evidence of redemption figures.
5.8
Particulars of any preliminary or ancillary charges in relation to the preparation
for and the carrying out of works.
6.0
CONDITIONS OF APPROVAL OF DECENT HOMES LOANS
6.1
The property subject to loan assistance must be registered with the Land
Registry at the time of application for assistance.
6.2
The Council will not approve an application for loan assistance unless it is
satisfied that the Applicant has an owner’s interest in every parcel of land on
which the relevant works are to be carried out.
6.3
The Council will not approve an application for loan assistance unless it is
satisfied that the Applicant has lived in the property which is the subject of the
application as his only or main residence for at least three years at the date of
application.
6.4
The Council will not approve an application unless it is satisfied that the work is
sufficient and adequate to meet the purpose for which the loan is given.
6.5
The estimated costs for the works are set at a reasonable cost, when compared
to each other and to estimates for similar work at other properties within the last
three years.
6.6
The approval of loan assistance will be based on the least expensive estimate of
those submitted with the application form. If the Applicant wishes to use another
contractor whose estimate is not the least expensive the Council will consider
this following a written request from the Applicant. In such circumstances the
Council will still approve the loan on the basis of the lowest quote and any
additional costs will be met by the Applicant and will be paid to the contractor
direct.
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DECENT HOMES LOANS POLICY
6.7
If appropriate, Building Regulations approval and/or planning permission must be
properly applied for and granted prior to approval of an application for loan
assistance. Copies of all relevant approvals should be provided to the Council
prior to the commencement of any works.
6.8
The application for loan assistance will be approved subject to the availability of
sufficient finances in the Council’s budget to pay the loan on satisfactory
completion of works.
6.9
The Council will not approve an application for loan assistance if the relevant
works have begun before the application is approved.
6.10
The eligible works should be completed within 6 months of the date of approval
of the application for loan assistance. The period for completion of works can be
extended at the discretion of the Council, but must be requested in writing and
agreed prior to the expiry of the initial period.
6.11
The Council will provide written notification to the Applicant of approval or refusal
of the loan assistance application. Where the Council decides to approve an
application for assistance it will determine the eligible expense which includes:
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The amount of the expenses which in its opinion are properly to be
incurred in the execution of the eligible works;
The amount of the costs which in its opinion are to be properly incurred
with respect to preliminary or ancillary charges and services, and;
The amount of loan it has decided to pay, taking into account all relevant
provisions.
6.12
If the Council notifies the Applicant that the loan application is to be refused, it
will at the same time notify him/her of the reasons for the refusal. Where
Applicants are dissatisfied with the decision to refuse a loan they should contact
the Strategic Housing Manager at the main Council address (see Section 9.0).
6.13
Once the application for loan assistance is approved, the loan will be registered
as a legal charge with the Land Registry and as a local land charge.
7.0
CONDITIONS OF PAYMENT OF DECENT HOMES LOANS
7.1
The Council will make loan payments in one of 3 forms –
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An interim payment – where part of the eligible works are completed. No
single interim payment, or total of all interim payments, will be more than
90% of the total loan approved;
A final Payment – where eligible works are satisfactorily completed and
where interim payments have been made previously. All final payments
will be for at least 10% of the total loan approved;
A full payment – where eligible work is completed satisfactorily and no
interim payments have been made.
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DECENT HOMES LOANS POLICY
7.2
In terms of all of the above types of payment, the criteria outlined below will
apply.
7.3
The work must be done in accordance with the Council’s specification of works,
unless otherwise agreed in writing during the course of the work.
7.4
The eligible works must be complete to the Council’s satisfaction and is
satisfactory under any building and planning laws where these apply. All relevant
certification documents will be required prior to payment being made. Council
officers will be required to inspect the works to determine satisfaction prior to
payment being made.
7.5
The eligible works must be completed by one of the contractors who submitted
an estimate with the application (unless otherwise agreed in writing).
7.6
Genuine written invoices, demands or receipts will be required or, in the case of
DIY work, receipts that clearly identify the materials purchased in order for the
eligible work to be carried out. The invoice must accurately reflect the work
carried out and the cost of that work.
7.7
Payments will be paid to the building contractor direct upon satisfactory
completion of works. This in itself does not constitute a contract between the
Council and the building contractor. The contract remains between the Applicant
and the building contractor.
7.8
In terms of full/final payments, if costs have varied from the approved loan figure,
the full or final payment will reflect the revised loan figure (whether this has been
increased or decreased).
8.0
CONDITIONS RELATING TO REPAYMENT OF DECENT HOMES LOAN
8.1
The loan must be repaid in the following circumstances;
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Where the Applicant disposes of the property whether by sale,
assignment, transfer or otherwise.
Where the Applicant is successful in claiming on their insurance or in
claiming legal damages in respect of the eligible works.
Where the Applicant fails to occupy the property in accordance with the
Certificate of Owner Occupation from the date the works are completed as
certified by the Council.
8.2
The conditions stated in paragraphs 8.1 above are charges on the property.
8.3
Where the Council wishes to purchase a property by virtue of its inclusion in a
regeneration scheme loan repayment will not be required.
9.0
COMPLAINTS
9.1
Where Applicants are dissatisfied with the service they have received (including
where a loan has been refused), they should contact the Strategic Housing
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DECENT HOMES LOANS POLICY
Manager at the main Council address. If the matter is not resolved to Applicants’
satisfaction they can make a formal complaint.
9.2
The Council’s complaints procedure has two steps. Step one is a complaint to
the Head of Housing which will be investigated within 15 working days. If it will
take longer than that the complainant will be notified. If the complainant is not
happy with the outcome, the matter can be progressed to step two by writing to
the Council’s Managing Director.
9.3
If after receiving the Managing Director’s response the complainant is still
dissatisfied, they can write to the Local Government Ombudsman. Details of how
to do this will be included within the Managing Director’s response.
10.0
Policy Revision
10.1
Minor changes to policy delivery may be required, especially in the first year of
operation. The Head of Housing has delegated authority to make changes,
which do not affect the broad thrust of policy direction. This will enable changes
to policy delivery to be accommodated and best practice to be included without a
formal re-adoption process.
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