1. Tenant (Incremental) Purchase Scheme 2016 Presentation to Members of Roscommon County Council April 2016

2. Background – Commitment given in Social Housing Strategy 2020 published in November 2014 under Pillar 3 (Reform – Creating flexible & Responsive Social Housing Supports) The Scheme is a National Scheme to let local authority tenants buy their homes Legislation The Housing Miscellaneous Provisions Act 2014 The House (Sale of Local Authority Houses) Regulations 2015

3. Roscommon County Council Briefing to Corporate Policy Group 08/03/2016 The CPG requested that Presentation be made to Plenary Council prior to any communication with Tenants in relation to the scheme Presentation delivered to Strategic Policy Committee 23/03/2016 The SPC has recommended that a competition be held to appoint an appropriately qualified valuer for each Municipal District

4. The Scheme in Outline To enable LA tenants purchase the home in which they currently reside (subject to terms and conditions) There is a discount on the purchase price based on gross income (note this is not a loyalty based discount scheme as in past TP schemes) The discount is registered as a legal charge on the house as part of the purchase called an ‘Incremental Purchase Charge’. The purchaser must continue to live in the house following the purchase but can sell the house at any time (subject to RCC agreement and the outstanding charge being paid)

5. Who is Eligible ? Tenant Must be in receipt of Social Housing Support for at least one year Gross Annual Income – at least €15,000 (Cannot be all Social Welfare) Anti-Social Behaviour – Garda check for all Members of the Household Must Not be in Arrears – (ie) not greater than 12 weeks in past 3 years unless payment arrangement being adhered to Previous Ownership – Cannot have availed of any previous Tenant Purchase Scheme Water Charges – Certificate of payment required from Irish Water

6. Excluded Properties Apartments, flats, maisonettes and duplexes Houses specially designed for older people Houses provided for people with disabilities to help them leave institutional care Houses that are part of a group housing scheme for the Traveller Community Caravans, mobile homes or other homes that can be moved Houses in a private development transferred to the local authority under Part V Houses reserved by the local authority for particular reasons

7. Terms & Conditions Condition of the House The market value (purchase price) of the house will reflect its existing condition. Local Authorities will give no guarantees as to the state of repair or structural condition of the house. Restrictions after purchase Purchaser must live in the house as their normal place of residence and must not engage in anti social behaviour Maintenance after purchase The purchaser will be responsible for the property including maintenance, insurances, repairs, charges etc

8. Purchase Price The market value of the house – less a discount. A Valuer acting on behalf of RCC will decide the market value. If tenant disagrees with valuation then can appeal and get independent valuation – cost to be borne by the Applicant Sale of House during the term of the Charge RCC must agree if purchaser wants to sell, let or sublet. If selling, the current value of the outstanding incremental purchase charge must be paid. RCC has first option to buy back the house. If sold within 5 years then original % charge must be repaid Gross Annual Income Calculation Income of tenant and their spouse, civil partner or other partner (cohabitant) who live in the house. Social Welfare cannot be the main source of income (only supplementary to employment or self employment & only certain types reckonable)

9. The Discount Example House valued at €150,000 - Gross Annual Income is €18,000, discount is 60% Once tenant satisfies eligibility – price for sale is €60,000 (i.e. - 40% of €150,000 is €60,000) RCC will place an Incremental Purchase Charge on the house equal to the discount on the price (€90,000)

10. The Charge The period of the Charge depends on the discount (ie) It reduces by 2% - (1/20 th, 1/25 th or 1/30 th ) annually and at the end of the appropriate charge period the charge will be zero. If allowed to sell within the Charge Period, the remaining percentage of the Charge based on the Resale Price must be paid

11. Sale of House in Charge Period RCC has first option to purchase house and must agree to sale during the charge period. The outstanding charge must be repaid to RCC. Example Say - after 10 years Sale Price = €160,000. Discount availed of was 60% (ie) 30 year period Outstanding Charge to be repaid to RCC = Charge has been reduced by 2% for 10 years = 20% 60% less 20% = 40% This means that charge to be paid in year 10 is 40% of €160,000 = €64,000

12. Financing the Purchase The financing of the purchase is a separate exercise to the fulfilling of the eligibility criteria to qualify for the scheme. Tenants are responsible for raising the money to purchase the house The tenant Must pay Discounted Purchase Price in full by Mortgage Loan, Savings, etc.(No cash payment allowed) Must prove a gross annual income of at least €15,000 in line with the terms and conditions of the scheme to be eligible Deposit is not required Must pay all costs, including legal fees

13. Summary of the Stages 1.Gross Annual Income & Eligibility Criteria (Validation) 2.Property Valuation 3.Letter of Offer showing Purchase Price 4.Acceptance of Offer & Financing 5.Completion of Purchase & Transfer of Ownership

14. Next Steps Scheme to be rolled out in Co Roscommon Tender Competition re – Valuer for each Municipal District Potentially eligible tenants to be notified Note - There is no closing date for the scheme