Band 2 - off the shelf purchases (OTS)

Part of: Housing Association Guide, Development Guide, Scheme Approval

Certain milestones need to be achieved before payment of grant. These milestones should be detailed in the timetable.

Band 2 - development milestones

Pre-qualifications are the major scheme development ‘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 the Tranche payment of Grant at Acquisition stage.

Each ‘step’ or ‘milestone’ is an essential part of a project and uncertainty or failure in any of the ‘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 Pre-qualifications. Each step completed or still to be completed allows the progress of a scheme to be measured by the Association.  

Housing need

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 site and properties 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 and Valuations.


Associations are statutorily obliged to consult secure tenants on decisions of housing management as defined in Article 40(2) of the Housing (Northern Ireland) Order 1983.  However to secure best value and enhance public involvement when making decisions, the range of issues on which Associations should consult needs to be more extensive.

Associations should note that consultation may not, as a rule, be required for Off the Shelf purchases unless 6 or more units are planned for a particular area or when an OTS is likely to be considered novel or contentious

For further guidance see Consultation - Scheme Approval.


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 OTSs shall be via a purchase contract, the Association shall not enter into negotiations with the vendor to carry out alterations to the property as marketed, other than those that would be deemed to be minor or ancillary in nature. This could be construed to change the nature of the contract from a purchase to a construction works contract requiring a procurement exercise compliant with PCR2015 and NIPPP.

For further guidance on acceptable minor or ancillary works see Annex D - Specific ESP & OTS Design Issues.

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 100 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 65 years for New Build schemes at the date of start on site.

Planning, building control and statutory approvals

The Association must confirm that Planning Permission for the property and associated environs, including access roads and amenities has been granted and that the property as constructed including environs is in compliance with the Planning Permission.

The Association shall ensure that Building Control Approval for the property has been granted and a certificate of completion has been issued.

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, Northern Ireland Electricity etc.

The Association should ensure that the completed property has been constructed in compliance with the statutory approvals.

For further guidance see Statutory Approvals and Agreements.

Site appraisal

In this type of scheme, the responsibility for assessing the site and ground conditions rests with the Developer/ Contractor. However, Associations must be satisfied that the scheme complies with the Department’s Design Standards.

The Association shall gain assurance, when considering the acquisition of properties where ground conditions required remedial actions, that these have been identified, appropriately implemented and certified. Examples include construction on brownfield sites, where radon gas is present and flood risk.

The Association shall ensure that a proposed OTS property is not detrimentally impacted due to the environmental or social characteristics of the site.


The Association shall appoint appropriately qualified and experienced consultants* to inspect completed OTS properties and provide a written Property Assessment Report (PAR)  which assesses the suitability of the property; the quality of design and construction; compliance with statutory requirements; and compliance with the Department’s required standards. The assurance provided by the consultant will assist the Association in confirming the property is complete and is suitable for purchase.

*For purchases of small numbers of standard OTS properties (i.e. 1-2 dwellings) suitably qualified and competent in-house staff may carry out the inspections and produce the report. However, for more complex OTS schemes involving greater numbers of dwellings or having communal areas, such as in apartment blocks, suitable consultants must be appointed.

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.

Economic appraisal

An Economic Appraisal must be prepared to take account of alternative sites and proposed solutions for the intended need. 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.

Band 2 - scheme documentation

Submissions for Off the Shelf Purchases are required to include various supporting documents.  If any of the documentation is not present the Association will be contacted by NIHE DPG.

OTS submissions – scheme documentation

Off the Shelf Submissions (including Disposal Proceeds Fund schemes) must include:

  • a copy of the sale advertisement from the property market or when a property has not been publicly marketed, a written account of how the property was acquired and the reasons it was not advertised for sale (refer to Development and Associated Procurement Approaches for further guidance)
  • an economic appraisal
  • a copy of NIHE letter supporting need
  • form NT1 (non-tariff funded schemes); or Form TA1 (tariff schemes)
  • form SFN1
  • a copy of the valuation prepared by an 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 land/property value not clearly taken account of in the valuation report. For further guidance see  Acquisition Issues & Valuations
  • Property Assessment Report (PAR): Associations are required to complete a PAR for all OTS properties, however submission to NIHE DPG is only required when the following are being procured:
    • apartments or flats with common areas are being procured
    • 6 or more units of traditional housing units in a development and
    • properties that are more complex in nature for example older persons’ housing, wheelchair accessible housing or supported housing

      Dependent on the stage of construction of the property being procured, submission of a complete PAR may not be feasible at application for project approval.  Available documentation should be included with the application for project approval, however outstanding PAR documentation must then be submitted when claiming the completion tranche. (For guidance see Annex D: Specific ESP& OTS Design Issues)
  • site location plan: If available, 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. If an ACE map is not yet available, a similar map should be provided
  • site layout plan (1:200)
  • block plans (1:100) (if applicable)
  • 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; and
  • outline specification - report to cover internal and external fabric of the building, M&E services, and external works.

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
  • scheme submission documents – ready reckoner  

Costs over TCI

The Association shall provide reasons for the scheme costs exceeding TCI including confirmation that other properties of a similar quality were not available in in the required location, which met the housing need and had costs that did not exceed TCI. In order to expedite matters the Association should submit readily available documentation in support of this paragraph. Supporting documentation 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.

Supported housing schemes only

Memorandum of understanding or letter of support from sponsor agency.
A copy of the letter from the JMA Partner confirming agreement in principle to enter into a JMA.

Project approval

The Project Approval (Form NT2/TA2) will set out any specific conditions attached to the approval, which have to be met by the Association.

Acquisition stage for band 2 off the shelf purchases

Guidance on the Acquisition Stage for Band 2 Off the Shelf Purchases, which includes:

  • distinct grant requirements;
  • partial acquisition;
  • phased possession acquisition for band 2.

Can be reviewed at Acquisition Stage Band 2.


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