Out-Law / Your Daily Need-To-Know

Change in status for Northern Ireland registered housing associations

Out-Law Analysis | 23 Apr 2018 | 4:37 pm | 2 min. read

ANALYSIS: The legal status of registered housing associations in Northern Ireland has changed this month following the entry into force of legislation intended to move the legal position for mutual societies in Northern Ireland closer to that in England and Wales.

The 2016 Credit Unions and Co-operative and Community Benefit Societies (Northern Ireland) Act (2016 Act) came into force on 6 April 2018. The 2016 Act replaced the existing 'industrial and provident society' legal form in Northern Ireland with two new legal forms, and transferred responsibility for registering mutual societies in Northern Ireland from the Department for the Economy (DfE) to the Financial Conduct Authority (FCA).

Existing mutual societies remain registered under the same legislation as before. They do not need to re-apply to the FCA, or to submit any application forms as a result of the transfer of responsibilities from the DfE to the FCA. However, from 6 April 2018, mutual societies must send any applications, annual returns and accounts that they previously submitted to the DfE to the FCA. This will include changes of registered office address, rules, transfers of engagements and any other application requiring registration under the previous legislation.

All current registered housing associations in Northern Ireland within the meaning of the 1992 Housing (Northern Ireland) Order were industrial and provident societies. This legal status no longer exists, and all Northern Irish industrial and provident societies which were established before 6 April 2018 are now referred to as 'pre-2016 Act societies' or 'registered societies'.

Note, however, that the regulator of social housing in Northern Ireland remains the Department for Communities acting through its Housing Regulation Branch.

The 2016 Act

The 2016 Act amended the 1969 Industrial and Provident Societies Act (Northern Ireland) and renamed it the Co-operative and Community Benefit Societies Act (Northern Ireland) (the 1969 Act).

The 'industrial and provident society' legal form has now been replaced with two new legal forms:

  • the co-operative society; and
  • the community benefit society.

The differences between the two legal forms are set out in the FCA's guidance on the registration of co-operative and community benefit societies (117-page / 846KB PDF), but in short a co-operative society is one which is run for the mutual benefit of its members while a community benefit society is one which is run for the benefit of the wider community.

As of 6 April 2018, any new Northern Irish housing association must register as either a co-operative society or as a community benefit society. A new housing association cannot register as both. It is no longer possible to register as an industrial and provident society in Northern Ireland.

Insolvency

The 2016 Housing and Planning Act (HPA 2016) applies mainly in England and Wales. However, section 117 of the HPA 2016 purports to extend the provisions of Part 4, Chapter 5 of the legislation to Northern Ireland. This section sets out a statutory scheme for the insolvency of registered providers of social housing.

Although the HPA 2016 received Royal Assent on 12 May 2016, this statutory scheme is not yet in force. Regardless, it seems likely that the scheme could not apply to a registered housing association in Northern Ireland without amendment to the terminology within Part 4, Chapter 5 of the legislation to make it directly applicable to Northern Ireland.

Stiofán Doherty is a banking law expert at Pinsent Masons, the law firm behind Out-Law.com.