Commentary on provisions of Act Registration of providers of social housing Section 8: Designation
Section 8 amends section 115 of the HRA 2008 so that the regulator can look beyond constitutional form when determining an organisation’s status as either a profit-making or non-profit organisation.
	This is achieved by removing the automatic designation of charities as non-profit organisations and clarifying that the fact that a body is prohibited by its constitution from trading for profit does not automatically mean that, for the purposes of section 115, it is a body that does not trade for profit eligible for designation as a non-profit provider.
	This section removes the condition which states that a non-profit provider can satisfy one of the conditions in the non-profit test if it is prohibited by its constitution from issuing capital with interest or dividend that exceeds a prescribed rate. No rate has ever been prescribed, which therefore leaves a potential loophole.
	These changes are to ensure that the regulator is able to designate registered providers according to the substance of how they actually operate (or intend to operate). Designation as a non-profit provider may bring with it benefits to that landlord, for example, the ability to provide supported accommodation and claim an uncapped rate of housing benefit. It is important that providers are not able to benefit in that way if they, in practice, do not truly operate as a non-profit organisation.