Structure of the Act Protection of assets
81.Sections 66 and 67 allow the regulator to protect a registered social landlord’s assets during and following inquiries into its financial or other affairs. Section 66 allows it to restrict particular types of transactions or payments. The regulator can also direct a bank or other person not to part with any money, assets or securities it holds for the registered social landlord without its consent. Subsection (3) makes it an offence to fail to comply with a direction given under this section.
82.Section 67 allows the regulator to transfer the RSL’s assets to another registered social landlord if, after making inquiries, it considers that there has been misconduct or mismanagement of the RSL’s affairs or that there is a risk to its financial viability or governance or it cannot provide housing services to an acceptable standard. In either case, the regulator must also be satisfied that a transfer of some or all of the assets would improve the management of those assets. Before doing this the regulator must consult, and consider the views of, the tenants of any houses it proposes to transfer, and any secured creditor the regulator knows to have security over those houses. The terms of transfer must, where not all of the RSL’s assets are being transferred, set the price the regulator considers, after obtaining an independent valuation, the assets would fetch if sold by a willing seller to a willing registered social landlord. Where there is a transfer of all of the RSL’s assets, the terms must provide for the settlement or transfer of the transferring landlord’s debts and liabilities in relation to the transferred property.
83.In the case of a charitable registered social landlord, any transfer must be to another charitable RSL which has the same, or similar, charitable purposes, and the regulator must consult the Office of the Scottish Charity Regulator before directing a transfer. Under section 67(8), the regulator must also consult the Office of the Scottish Charity Regulator before directing a transfer of assets acquired by a non-charitable RSL at a time when it was a registered charity. This is to ensure that charitable assets continue to be used only for charitable purposes, as required by the Charities and Trustee Investment (Scotland) Act 2005.