Agreement with
Once you have decided on your chosen social housing development delivery method you can then begin the process of reaching an agreement with an Approved Social Housing Association or Local Authority.
There are various stages involved in reaching an agreement with and approved social housing association or local authority. Any proposed developer and their social housing development must meet each part of these requirements to gain approval from the Approved Social Housing Association.
Here at Social Housing Co. we can help you with each aspect of this application process to ensure that you are easily approved while receiving the best deal possible for your proposed development.
Stage 1
The first stage of any application process is submitting some initial forms and declarations. Which may include applicant’s information, conflicts of interest, applicants’ statement, any previous criminal conviction stated and any conflicts of interest that may be relevant. This stage is to help the Approved Housing Association or Local Authority get to know you and your company as they decide if you are someone, they are interested in working with.
Stage 2
The second part of an application process is usually focused on meeting eligibility criteria. This mainly consists of the ability to meet minimum requirements and demonstrating that they have the ability and capacity to perform the contract. Each applicant must possess a valid tax clearance certificate from the Irish Revenue Commissioners or in the case of a non-resident a statement from the Revenue Commissioners in Ireland confirming suitability on tax grounds.
Applicants are required to confirm that either themselves and their building contractor have Employer’s Liability up to 13 million per anum and Public Liability up to 6 million per anum as required below. Applicants are also required to confirm that each of their professional team members and material sub-contractors have Professional Indemnity insurances. Participants having relevant insurances are a compulsory part of any social housing development.
A Site location Map that is an ordnance Survey Map in a scale of 1:100 on an A3 page with the with the boundaries clearly marked in red which shows the location of the proposed social housing development. Here at SOCIAL HOUSING CO. we can provide you with this type of map.
Applications are expected to include a copy of the full planning permission granted in respect of the scheme. Where planning permission is not in place, the Applicant must identify the status as to any planning application that has been made or is due to be made.
Funders Requirements Each Applicant must confirm that they are willing to execute the following documents as detailed in appendix 3in favour of the project’s funders should they be required:
- Form of Collateral Warranty
- Form of Letter of Confirmation
- Form of Notice for Insurances
Stage 3
The third part of the application process is submitting the Housing Proposals based on how you propose to deliver the units:
Detailed project designs which should be the equivalent of the planning drawings. These can consist of floor area in each unit, areas of private open space, refuse collection and storage, services and amenities within the scheme.
The overall specifications of the social housing development which usually include the proposed architectural and technical specifications such as the provisional BER and a schedule of finishes for the scheme. SOCIAL HOUSING CO. can help you with both the submission and the creation of the overall specifications of your social housing development.
The application must also include a programme detailing the timescales involved in developing the scheme. This should specify general timeframes and when the scheme is likely to reach practical completion. The date of delivery of the scheme will be the date for completion in any subsequent building agreement.
A proximity report of the Proposed Housing Scheme to public amenities and facilities. The report should include:
- Public Services: Public transport, good road networks, public car parking, park & ride facilities, cycling routes & parking facilities.
- Primary Services: Schools, crèches, hospital/medical facilities, supermarkets, Post Office, Banks, Day-care centres and other retail services.
- Amenities: Playgrounds, parks, libraries, sports facilities, swimming pools, & other private or public leisure facilities such as cinemas, community centres, children’s play centres.
Stage 4
The final part of any submission is the overall pricing plan which includes the development cost and the breakdown of your structured staged payments if applicable. This usually consists of monthly payments.
Negotiations are a major part of this stage of the application process and they can be difficult as the Approved Housing Association or Local Authority often have more experience and a better understanding of this part of the application process which offers them an advantage over the less experienced applicants, this is where SOCIAL HOUSING CO. can help with the expertise needed to ensure a level playing field in any negotiation.
The price per unit is a key factor in this section as the Approved Hosing Association or Local Authority are unlikely to agree if this is above a certain amount.
Here at SOCIAL HOUSING CO. we have years of experience in submitting pricing plans and we can ensure that your project is designed so that it has a price per unit acceptable for the Approved Housing Association or Local Authority while also ensuring you receive ample return on your investment.
Collateral Warranty
In order to enter a contract to construct a social housing development with an Approved Housing Association or local Authority you will be required to provide a collateral warranty on any works carried out on the project over the course of the development.
What is a Collateral Warranty?
A Collateral Warranty is a contract under which a consultant, a building contractor or a sub- contractor warrants to the Approved Housing Association or Local Authority that it has fulfilled its obligations under its building contract or sub-contract.
What is the purpose of a Collateral Warranty?
The purpose of a Collateral Warranty is to give an Approved Housing Association or Local Authority, rights to enforce that original contract.
Main points of negotiation
- Insurance – The Collateral Warranty will set out for how long the insurance policy must be maintained and at what level this insurance policy should be. This can be difficult to govern in practice, particularly after a project has been completed. It can be difficult to police whether the contractor or consultant has maintained the insurance at the required level on completion of the project.
- Duration of Collateral Warranty – Collateral Warranties tend to range from 6 – 12 years. The beneficiary of the Collateral Warranty would prefer it for a longer period while the contractor or consultant would prefer it for as short a period as possible.
- Step in Rights – This allows the beneficiary of a Collateral Warranty to step into the shoes of the employer, in a circumstance where the employer becomes insolvent, so that the beneficiary can complete the project.
- Assignability – This point is very important to a contractor or a consultant. It will set out the amount of times a Collateral Warranty can be assigned to another third party. In practice, it usually provides for assignment twice without consent of the contractor or consultant and that any further assignments must be with the consent of the contractor or consultant.
A word of caution
- Collateral Warranties should be consistent with the building agreement or professional appointment as it is a promise to comply with that contract. It is frequently the case that the Collateral Warranty contains additional obligations or is expressed in an ambiguous way.
- The contractor or consultant should carefully review the terms of a Collateral Warranty as often they are more onerous than terms found in the standard RIAI warranty. This is particularly the case if there is a third-party funder involved. The contractor or consultant should not automatically accept the terms of a Collateral Warranty and, where appropriate, should seek to negotiate its terms.
The contractor or consultant should bear in mind that a Collateral Warranty can often be assigned to an unknown third party who may be a subsequent funder or financing party with whom they are unfamiliar. - For an employer, it is important to agree the form of a Collateral Warranty before engaging with the contractor or consultant and arrange to have them executed at an early stage as this can be required for Practical Completion. The employer does not want to find themselves in a situation where they are delayed reaching practical completion.
- A Collateral Warranty is only of benefit if, at the time it is being enforced, the party who gave the Collateral Warranty or their insurer is “a mark”.
