Charitable Property Protected from Right to Buy Scheme

An amendment to the CharitiesBill has been accepted by the House of Lords which will block thegovernment's plans to force charitable housing associations to selloff their housing to tenants.

The right to buy schemeenables council housing tenants to purchase their council home at adiscount. The former council tenant is then able to dispose of theproperty if they wish and if it is sold after five years, to sellit at the full market value. The government has proposed to extendthe right to buy scheme to housing association tenants as well.However, many housing associations have charitable status.Therefore, there are concerns that not only could the schemeprevent the charitable aims being obtained of providing housing tocertain vulnerable people but the scheme could also result in adisincentive to charitable benefactors if it meant that thegovernment could force the sale of assets which have been donatedto good causes.

The amendment in the Billstates that "the Charity Commission shall ensure that independentcharities are not compelled to use or dispose of their assets in away which is inconsistent with their charitable purposes". BaronessHayter told the House of Lords that "we do not want the right tobuy to be at the expense of the charitable aims of those charitieswhich, for example, have been donated land, money or property for aspecific purpose, whether it is to help house the elderly or ruralworkers or to rent to low-income families or other particularcategories of beneficiary."

Therefore, the Bill should notaffect the continuance of the charitable housing associations' aimsbeing obtained and consequently, benefactors and donors should notbe discouraged from containing to donate.

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.