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Conditions for sale of housing association homes relaxed (MG 2013-02)

Conditions for sale of housing association homes relaxed (MG 2013-02)

Housing associations are not automatically permitted to sell their housing stock. Especially if homes are sold at a discount, the association must comply with regulations imposed by the minister. The present conditions for selling homes to natural persons for own occupation at a discount of more than 10% have now been relaxed. It is also becoming easier for housing associations to sell homes rented on the unregulated market and homes that could potentially be rented on the unregulated market to third parties. The new regulations, including the new ministerial circular MG 2013-02, take effect as of 1 October 2013.

Sale to natural persons for own occupation
Under the new regulation, the sale of homes to natural persons for own occupation at at least 90% of the value unencumbered by tenancy or use does not require the minister’s permission. Nor is permission required any longer if the (amended) conditions of the Regulations for the Sale of Living Accommodation are satisfied. In the event of a discount of more than 10%, if the home is sold on within ten years the discount must be repaid to the extent it exceeds the 10%. If this discount is between 10% and 25% and the household income is more than € 38,000, the contract of sale must also include a division of value (according to the Fair Value table). For household incomes up to € 38,000, this division of value according to the Fair Value table is not required. A mandatory division of value applies for all income groups if a discount of between 25% and 50% is granted. The housing association can agree with the buyer on a period of more than ten years.

The aforementioned sales which do not require permission must be reported after the fact in the housing association’s annual report. Permission is still always required in advance for sales that deviate from the conditions.

Sale to third parties
A housing association always requires advance permission if it plans to sell homes to a third party (i.e. a party who is not going to occupy the house him/herself or another housing association). A distinction is made here between homes for which the maximum rent based on the housing valuation system (WWS) is equal to or more than the rent-control ceiling and those for which the maximum rent falls below the rent-control ceiling, as follows:

Maximum rent below the rent-control ceiling
For homes with a maximum rent that falls below the rent-control ceiling, there is a requirement that the home must be offered to the present tenants. Permission for the sale of vacant homes is only granted in principle if the homes are sold for at least 90% of the value unencumbered by tenancy or use. In exceptional cases, permission may be given for higher discounts. Homes that are currently rented out can be sold, with permission, for at least 75% of the value unencumbered by tenancy or use. For higher discounts on these homes, an obligation to operate for at least 7 years applies, as well as a profit-sharing arrangement of at least 30 years.

Maximum rent equal to or higher than the rent-control ceiling
In principle, permission is given for a sale if the sale takes place at the home’s market value. This is an amended way of determining the value and is aimed at introducing more consistency with the market. It is not necessary that the homes first be offered to the present tenants.

Rented housing stock
In deciding which homes will be sold, municipalities and housing associations will have to make good agreements in order to ensure that the composition of the rented housing stock matches the demand for rental homes in a number of price and quality segments on the local and regional level.

Robert Rijpstra, lawyer
John Wijnmaalen, civil-law notary

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