Normally Off the Shelf grants are paid in one tranche however grant can be paid in two tranches (10% & 90%), as set out below.
Distinct grant requirements - Grant for OTS schemes is normally claimed by the Association in one Tranche (100%), when purchase completion takes place. Therefore the Acquisition stage grant application in OTS schemes represents the final claim and no further advances of grant will be made. More information on Grant Timetable.
Partial acquisition - In certain conditions, grant for OTS schemes may be claimed in two Tranches, with a first Tranche of 10% being claimed by the Association to cover situations where work has started and the vendor (contractor/developer) requires an initial deposit to allow a purchase contract to be signed and the work completed. The remaining 90% Tranche is paid when the Association takes possession of the property etc. Normal rules governing the acquisition claim apply, see Table 5: Acquisition Stage (Band 2) for details.
This facility is available to cover situations where contractor/developers will only complete properties to a particular stage – e.g., DPC level or ‘shell’ state – unless they have a firm commitment from a buyer. In such cases, the Association will be required to enter into a formal Development Agreement with the contractor/developer. A deposit is normally required (usually around 10% of the purchase price). The Association will need to satisfy the additional criteria and certifications for receipt of grant described in Table 5: Acquisition Stage (Band 2).
Phased acquisition for Band 2
In exceptional circumstances a phased approach can be considered by Associations when procuring multiple units OTS schemes. The scenario may arise when completion of a purchase contract for one or more properties in an OTS scheme is subject to unavoidable and significant delay. A phased approach would enable grant to be claimed for those properties where the purchase contracts can be completed and that are in the Association’s ownership. Associations can only utilise a phased approach to OTS properties with prior agreement from NIHE DPG.
When part or parts of the completed properties have been taken into Association possession, or within 30 days thereof, the Association may submit a grant claim to the NIHE (DPG). Grant must only be claimed on those completed units which the Association has taken into its possession. [Note: In contractual terms this is known as ‘Partial Possession by Employer’]
See Table 6 OTS – Phased Possession Acquisition - Band 2 in the Housing Association Guide - Scheme Approval Guide tables section for details.
Grant must be claimed based on a ‘sub-phase’ of the approved scheme, as follows:
- grant rate type (line 2 – SFN1 form)
- number of units vompleted x adjusted TCI per unit/ person x unit grant rate x scheme cost index x acquisition tranche percentage