Annex 3: Guidance Note 16 - as amended following the consultation [accessible version]
Updated 29 February 2024
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Guidance Note 3: Sections 206 – 210A - Inquiry and extraordinary audit.
| Applicable | |
| PRP (for profit) | yes |
| PRP (not for profit) | yes |
| PRP (registered charity) | yes |
Type of power: regulatory power
Scope
This power enables the regulator to remove officers from a private registered provider.
‘Officer’ is defined in section 270 of the Act. Depending on the PRP’s legal structure or whether it is a registered charity, it can include a director, secretary, trustee, manager and member amongst others.
When the regulator will use this power
Section 266 of the Act sets out the circumstances where the regulator may use this power. These circumstances are where an officer:
- has been made bankrupt
- has made an arrangement with his or her creditors
- is subject to a disqualification order or a disqualification undertaking under the Company Director’s Disqualification Act 1986 or equivalent legislation in Northern Ireland
- is subject to an order under section 429(2) of the Insolvency Act 1986
- is disqualified under section 178 of the Charities Act 2011 from being a charity trustee
- is incapable of acting by reason of mental disorder
- is impeding the proper management of the PRP by reason of absence or failure to act
- is obstructing the regulator, or failing to co-operate with the regulator, in the performance of the regulator’s functions under Part 2 the Act.
Indicators that an officer is impeding proper management of a PRP, or is obstructing or failing to co-operate with the regulator include:
- the absence of officers means that the governing body fails to hold quorate meetings, and this puts the financial viability of the PRP, services to tenants, or tenants at risk.
- there is evidence that an officer or officers are deliberately misleading or withholding information from the regulator and/or other stakeholders and this puts the safety of tenants and social housing assets at risk.
It may be necessary for the regulator to exercise this power against more than one officer of a PRP.
Process for using the power
If the regulator is satisfied that at least one of the grounds as set out under section 266 of the Act has been met, it will take all reasonable steps to give at least 14 days’ notice of its intention to remove the officer to both the officer concerned and the PRP (section 267(1) of the Act).
Where the regulator decides to make an order removing the officer, it will:
- take reasonable steps to notify the person removed;
- notify the PRP; and
- notify the Charity Commission where the PRP is a registered charity.
The regulator will consider if a new officer should be appointed under section 269(1)(a) of the Act to replace the removed person.
Appeal process
There is a statutory right of appeal to the High Court, which must be brought within the period of 28 days beginning with the day on which the PRP is notified of the removal.