Certain milestones need to be achieved before payment of grant. These milestones should be detailed in the timetable.
Prequalifications are the major scheme development ‘steps’ or ‘milestones’ that an Association must comply with in order to meet the agreed timetable in the Social Housing Development Programme (SHDP) and the Department’s project approval criteria. Each ‘step’ or ‘milestone’ represents what must be achieved or obtained at a particular stage and, in association with other Certifications, allows the Association to apply for project approval and payment of Grant at Acquisition stage.
Each ‘step’ or ‘milestone’ is an essential part of a project and uncertainty or failure in any of these steps can delay or put at risk the project. It is essential that the Association works with the NIHE (DPG), various stakeholders, its Solicitor and Consultants on all the Prequalifications. Each ‘step’ or ‘milestone’ completed or still to be completed allows the progress of a scheme to be measured by the Association.
Housing need must be already identified and site/ scheme included in the Social Housing Development Programme (SHDP). The Association will require a letter from the NIHE supporting the need. The Association will of course have to write to the NIHE requesting support for the Association’s proposals, a copy of which shall be retained on file. The breakdown of property types on both letters must correspond.
This will require the valuation of the property prepared by an independent valuer engaged by the Association. The Association will of course have to fully brief the valuer on the site, site boundaries, development constraints etc. For further guidance see Acquisition Issues & Valuations.
Associations should note that consultation may not, as a rule, be required for Existing Satisfactory Purchases unless a number of ESPs are planned for a particular area or when an ESP is likely to be considered novel or contentious. For more information see consultation.
Legal Aspects - All schemes with an Acquisition Stage will require the normal pre-purchase legal and site/ property checks by the Association’s Solicitor. The land/ property to be acquired must offer good title. Details of any restrictions, easements, covenants, pre-emption clauses or any provisions of the contract, draft lease or conveyance which might adversely affect the proposed scheme or its future use must be referred to the NIHE (DPG) for notification prior to the Association being committed to the acquisition of the property.
Acquisition of ESPs shall be via a purchase contract. The purchase contract is for the property as it stands and cannot include works to repair/upgrade the property. As such the Association cannot instruct the vendor to deliver repairs or upgrading of a property as a requirement of the property purchase. Subsequent to purchase contract, allowance is made in the Housing Association Grant for upgrading and repair works, within a set financial limit, to be delivered by contractors and consultants procured by the Association
Leasehold - The interest to be acquired must be freehold or leasehold for a term of years certain. Associations should always seek to acquire the vendor’s full interest in a site or property, rather than accepting a newly created lease or sub-lease. In other words:
- if the vendor owns the freehold, the Association should seek to buy the freehold or
- if the vendor owns a long lease or sub-lease, the Association should seek to buy the residue of the leasehold estate, provided the lease or sub-lease still has at least 150 years to run
Where, however, an Association finds it impossible to negotiate a purchase on the above terms and judges that a HAG-subsidised scheme should still proceed on that site or property, the Association may acquire a newly created lease or sub-lease (depending on whether the vendor owns the freehold or leasehold interest, respectively). The terms of such a lease or sub-lease should be as long as possible and at least 35 years for Rehabilitation schemes.
Although Planning is not normally an issue for ESPs, the Association must check the position regarding Planning and ensure that ESPs have planning permission and that they have been constructed in compliance with the planning approval. If an ESP has been subject to alteration subsequent to approval of the original planning application, the Association shall also ensure that planning permission for any alteration has been granted.
Similarly if the property at time of construction required Building Control approval, the Association shall confirm that the approval has been granted and that any subsequent alterations have appropriate Building Control approval.
The Association shall ensure all appropriate permissions and approvals are in place from Statutory Authorities and utility providers including but not limited to Northern Ireland Water, DFI Roads, Rivers Agency, Northern Ireland Environment Agency, DfC Historic Environment, N Ireland Electricity etc.
For further guidance see Statutory Approval and Agreements.
The Association when tendering for ESP associated works shall select a procurement method that is considered best value for money and that is compliant with the requirements of NIPPP and PCR 2015.
For further guidance see Procurement Guide.
On receipt and review of tenders the Association must reassess the scheme costs. If scheme costs at tender stage exceed the limit for works to ESPs the Association will need to consider reductions.
The Association needs to take a view of:
- whether the total amount of the cost increase remains within the ESP cost limit and how it will fund the cost of the increase; and/or
- whether the total amount of the cost increase exceeds the ESP cost limit and a revised approval is required or if Acquisition and Works (Rehabilitation) is an appropriate Scheme Type.
For further guidance see Scheme Types
The Association shall appoint appropriately qualified and experienced consultants to assess the condition of the existing property including its environs, and to prepare and cost proposals for necessary repairs/ checks/ upgrading etc. to meet the proposed need in line with the Design Standards.
For further guidance see Annex D Specific ESP & OTS Design Issues
The procurement of consultant services shall be on the basis of best value for money and in compliance with NIPPP and PCR2015.
For further guidance see Procurement Guide.
An Economic Appraisal must be prepared to take account of alternative sites and proposed solutions for the intended need. As part of the EA process, Associations would be expected to reconsider the suitability of any property, where the identified repairs/ checks/ upgrading works would not achieve the Decent Homes Standard.
The EA should include any qualitative benefits the project may bring to sustaining local communities. Where costs exceed TCI levels, reasons for exceeding TCI must be provided.
Submissions for Existing Satisfactory Purchases are required to include various documents, if these supporting documents are not present the Association will be contacted by NIHE DPG.
ESP Submissions – Scheme Documentation
ESP Submissions (including Disposals Proceeds Fund schemes) must include:
- a copy of the sale advertisement from the property market, unless the property is being offered for sale back to the Association under the terms of the Statutory House Sales Scheme or is being sold directly to the Association by the NIHE. The Association shall provide confirmation when either of these two exceptions to the requirement for public advertisement apply
- an economic appraisal
- a copy of NIHE letter supporting need
- form NT1 (non-tariff funded schemes) or
- form TA1 (tariff schemes)
- form SFN1
- copy of the valuation prepared by independent valuer, and an accompanying plan, endorsed by the valuer (i.e. signed and dated), that clearly identifies the site/property valued. A copy of the Association’s brief to the valuer will be required where there are evident issues affecting the property value not clearly taken account of in the valuation report. For further guidance see Acquisition Issues & Valuations Acquisition Issues & Valuations
- a condition report (For guidance see Annex D: Specific ESP& OTS Design Issues)
- site location plan - A certified or licenced, dated ACE map plan for the property highlighting the property boundaries in red. The Ace map should clearly identify the address of the property
- site layout plan: Where external works are to be carried out a 1:200 scale drawing must be provided and
- property plans - (1:50) including sections, elevations etc. Plans must be fully dimensioned and show the furniture and kitchen layout. The scale must be adequate to enable assessment, if required
Internal Environment for further guidance refer to Design Standards which includes the minimum standards for kitchen storage units and appliance spaces.
For further guidance see Scheme Approval Forms which include:
- TA1 Explanatory Notes
- NT1 Explanatory Notes and
- Scheme Submission Documents – Ready Reckoner
Costs over TCI
The Association’s explanation for costs exceeding TCI and the structural/condition report should together cover all abnormal cost factors and ensure that the content of the proposals can be understood. The Association should also include a cost analysis.
Note: In order to expedite matters the Association should submit readily available documentation in support of this paragraph. Supporting documentation will vary depending on scheme type but should, as a minimum, include a Consultant’s or Technical Agent’s report confirming that the scheme represents value for money. Where submitted documentation does not contain sufficient detail to permit assessment the NIHE (DPG) will contact the Association.
The Project Approval Forms [NT2/TA2] will set out any specific conditions attached to the approval, which have to be met by the Association.
The term ‘Completion’ in the New Engineering Contract (NEC) Engineering Construction Contract (ECC) is a defined term. The definition enables, in this instance the Association, to define exactly what is meant by completion as part of Works For guidance to Associations on Completion of Non-Tariff and Tariff ESPs including Recoverable Costs Post Completion see: