Published by Ministry of Housing, Communities and Local Housing, June 19
Almshouses and other charities
11.4 Section 79(3) of the Housing Act 2004 explicitly exempts the following: “A tenancy or licence is an exempt tenancy or licence if— (a)it is granted by a non-profit registered provider of social housing,”
11.5 This exempts non-profit charities that are registered providers from licensing. However, non-profit charities that are not registered remain subject to licensing. 73 Housing Act 2004 section 79(3) and The Selective Licensing of Houses (Specified Exemptions) (England) Order 2006 74 Ibid. section 2f 89
11.6 Almshouses, for example, fall under the banner of the private rented sector, despite clear differences in operation. The majority of almshouse residents today will be of retirement age, of limited financial means and living within the vicinity of an almshouse charity. Almshouse charities are regulated by the Charity Commission and are usually governed by locally recruited trustees. Residents pay a weekly maintenance contribution which is similar to rent but different in law, and less than a commercial rate. Some almshouses are registered providers, whereas others are not, primarily due to the cost involved in becoming registered.
11.7 Unlike unregulated private sector landlords, all almshouse charities are regulated by the Charity Commission. The Charity Commission guidance document stipulates:
7.6 Managing property (land and buildings) If the charity
owns or rents land or buildings, you and your co-trustees should:
- ensure
it’s properly maintained and being correctly used
11.8 Trustees are therefore obliged to provide well maintained and managed low-cost community housing for people in need.
11.9 As an example of a non-profit charity offering vital services (e.g. supported housing for the elderly) to the community, non-registered almshouses (approximately 75% of all almshouses), work on the slimmest of margins and the cost of licensing adversely affects their financial viability. For example; in one of several cases reported to the review, total licence fees came to £20,000, which represented approximately one quarter of all expenditure.
11.10 Valuing their role in the local community, some local authorities have conceded to waiving the licence fee for almshouses and other charitable institutions (e.g. veterans housing charities, and charitable co-operative and community benefits societies). The preference was to exempt them from the scheme, however they could not since the Act does not include them in the list of exemptions. As a result, these properties are still licensed, but at the cost of the local authority rather than the charity itself. Given the valuable work they do, it has been strongly argued that almshouses and similar non-profit organisations should be exempt from selective licensing. However, as a counter point, some almshouses are located in areas with pervasive poor housing conditions, and as such it may be appropriate in such cases for authorities to satisfy themselves that the properties in question are suitable.
11.11 It should be noted that local authorities cannot simply draw a designation boundary around these institutions. The process of drawing such a boundary is highly informed by the geographic level at which evidence is available. If a given data set supporting the introduction of licensing is at lower super output area level (LSOA), then the Guidance: “The essential trustee: what you need to know, what you need to do” – Charity Commission of England and Wales, 2018 90 designation will be typically be defined as a group of contiguous LSOAs that share the negative characteristic that licensing is being introduced to address. Discretionary introduction of single property sized “holes” within that area, on the presumption that the properties within are not contributing to the problem in question, is clearly open to challenge in the absence of the necessary granularity of supportive evidence. However, even if it were practical and defensible to draw such a boundary, local authorities report simply not knowing the locations of all such charitable institutions at the planning stage, as a result of the pervasive lack of knowledge concerning the private rented sector previously discussed.
11.12 Taking all arguments in the round, a presumption of exemption for non-profit charities providing support to local communities is strongly supported by a range of stakeholders, especially given that the numbers of properties are relatively small, thus minimising any financial loss to the selective licensing fund. If authorities have concerns over the condition of such properties, access for inspection can be gained without difficulty through the use of Part 1 powers.
11.13 The Act provides a mechanism for the Secretary of State to make regulations introducing exemptions in section 79(4):
(4)In addition, the appropriate
national authority may by order provide for a tenancy or licence to be an
exempt tenancy or licence—
(a)if it falls within any
description of tenancy or licence specified in the order; or
(b)in any other circumstances so
specified.
11.14 This review supports such the introduction of exemptions for purpose-built student accommodation that follows a Government approved code and non-profit charitable residential institutions that are not registered social housing providers.