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					dated                   2010




Homes and Communities Agency
and
Mansfield District Council




Annexures to the Grant Agreement

Local Authority Model for NAHP 2008/11

Local Authority owns land, develops and retains ownership


Trowers & Hamlins LLP
Sceptre Court




                                                            1
40 Tower Hill
London
EC3N 4DX

t +44 (0)20 7423 8000
f +44 (0)20 7423 8001
www.trowers.com
                                           Annexure 1

                                 Definitions and Interpretation

1         Definitions and Interpretation

1.1       Definitions

          In the Grant Agreement unless the context otherwise requires the following terms shall
          have the meanings given to them below:

          2005 Regulations means the Income Tax (Construction Industry Scheme) Regulations
          2005 (SI 2005/2045);

          Acceptance Date means the date upon which the Agency accepts a Round 2 Scheme
          pursuant to Condition 32.2 or a Candidate Scheme pursuant to Condition 33.4;

          Accredited Manager means a person who maintains a current membership of the
          Housing Management Accreditation Scheme from time to time;

          Additional Design and Quality Standards means in respect of each Scheme the
          standards set out in the Quality Codes screen of IMS as submitted by the Council as part
          of its Bid and as confirmed by the Agency through IMS;

          Adjudicator means an adjudicator appointed in accordance with Condition 16.3;

          Affordable Housing for Rent means accommodation made permanently available for
          letting to persons on secure tenancy or introductory tenancy or assured tenancy terms (as
          applicable) at Target Rents on the basis of housing need;

          Agency's Proportion means the amount calculated in accordance with Condition
          Paragraph 2 of Annexure 3;

          Agency’s Representative means such person or persons as the Agency may appoint to
          act as its Representative from time to time for the purposes of the Agreement;

          Agency's Surplus means the amount calculated in accordance with Condition
          Paragraph 3 of Annexure 3;

          Agreed Expenses means any valuation legal and administration costs reasonably and
          properly incurred by the Council and evidenced in a form satisfactory to the Agency in
          disposing of any Dwelling up to a maximum of £1,500 including irrecoverable VAT
          (indexed) per Dwelling;

          Agreed Grant means the amount of grant (being the aggregate of the First Tranche Grant
          and the Second Tranche Grant) payable by the Agency to the Council in respect of the
          relevant Scheme as the same is set out in the Scheme Details;

          Agreed Purposes means the purposes for which each of the Dwellings is to be used as
          such purposes are described in the Scheme Details;

          Agreement means the Grant Agreement (including its Schedules and Annexures if any);




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          Architect means the architect appointed or to be appointed by the Council in respect of a
          Scheme;

          Attributable Final Scheme Costs or AFSC means the amount of the Rented Final
          Scheme Costs attributed to such Dwelling being the Rented Final Scheme Costs
          multiplied by the percentage of the internal floor space for such Dwelling as a proportion of
          the total internal floor space for all Dwellings comprising Affordable Housing for Rent in the
          Scheme;

          Attributable Grant means the Attributable Rented Grant (ARG) calculated in accordance
          with Condition Paragraph 1 of Annexure 3;

          Balancing Sum means such sum as represents the difference between the amount of
          Public Sector Subsidy in respect of the Scheme and the Final Scheme Costs in respect of
          such Scheme;

          Basic Design and Quality Standards means in respect of each Scheme, the conditions
          applicable to the design and construction of the Property (set out by the Council in its Bid
          in response to the Development Bid Conditions) and as confirmed by the Agency through
          IMS;

          Bid means the proposals for grant funding submitted on IMS by the Council to the Agency
          and as agreed and confirmed by the Agency through IMS together with all supplementary
          information supplied by the Council as required by the Prospectus;

          Building Contractor means the building contractor appointed or to be appointed by the
          Council in respect of a Scheme;

          Business Day means any day other than a Saturday, Sunday or a statutory Bank Holiday;

          Capital Funding Guide means the Affordable Housing Capital Funding Guide published
          by the Agency from time to time on its website or any successor guide published by the
          Agency (or any successor body) from time to time;

          Candidate Scheme means a scheme submitted by the Council for consideration by the
          Agency as a candidate to receive grant funding;

          CDM Regulations means the Construction (Design and Management) Regulations 2007
          (SI 2007/320);

          Civil & Structural Engineer means the civil and structural engineer appointed or to be
          appointed by the Council in respect of a Scheme;

          Collateral Warranty means the document referred to in Condition 6.2.5;

          Conditions Precedent means the First Tranche Conditions Precedent and the Second
          Tranche Conditions Precedent;

          Confidential Information means in respect of each of the Agency and the Council all
          information relating to that body (as applicable) or the existence or terms of the Agreement
          or any agreement associated with the Agreement (Associated Agreement) in respect of
          which any party hereto becomes aware in its capacity as a party to the Agreement or
          which is received by such party in relation to the Agreement or an Associated Agreement


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          from the Agency or the Council (as applicable) or either of the Agency's or the Council's
          advisers (as applicable) or from any third party if the information was obtained by that third
          party directly or indirectly from the Agency or the Council or their respective advisors (in
          each case as applicable) in whatever form in either case;

          Consents means all permissions, consents, approvals, certificates, permits, licences, and
          authorisations of a Relevant Authority required for the performance of any of the Council‟s
          obligations under the Agreement;

          Construction Operations means those operations defined in Section 74 of the FA 2004
          as construction operations;

          Contractor means a person who is a contractor for the purposes of the FA 2004 and the
          2005 Regulations;

          Corporation means The Housing Corporation, a body corporate established under the
          Housing Associations Act 1985, whose investment functions were transferred to the
          Agency on 1 December 2008 pursuant to the Housing and Regeneration Act 2008;

          Council Party means:

                     (a)    the Council, the Building Contractor, any member of the Professional
                            Team, agent, employee or subcontractor of the Council and the
                            Council‟s Representative; and/or

                     (b)    any person attending upon any person referred to in paragraph a of this
                            definition for the purpose of implementing any Scheme;

          Council’s Representative means such person as the Council may appoint to act as its
          representative from time to time for the purposes of the Agreement;

          Council’s Solicitors means [to be completed]

          Deed of Covenant means the deed of covenant in the form set out in Annexure 2;

          Delivered Scheme means a Scheme in respect of which all the Conditions Precedent
          have been satisfied and the Agreed Grant has been paid;

          Design and Quality Standards means the standards set out in the Corporation's
          publication entitled "Design and Quality Standards April 2007";

          Development Bid Conditions means the conditions of that name set out on page 60 of
          the Prospectus;

          Direct Cost of Materials means the amount in respect of which the Agency is satisfied
          represents the direct cost to the Council or to any other person of materials used or to be
          used in carrying out the construction operations to which the Agreement relates as
          provided in Regulation 4 of the 2005 Regulations;

          Dispute Resolution Procedure means the procedure set out in Condition 16;

          DPA means the Data Protection Act 1998;




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          Dwelling means a house, flat or maisonette developed with the benefit of grant payable
          under the Agreement and in relation to each relevant Scheme as more particularly
          described in the relevant Scheme Details;

          Effective Date means in respect of each Scheme the date upon which the Council
          Second Tranche Grant is paid to the Council;

          Eligible Costs means the costs relating to the development of the Dwellings incurred or to
          be incurred in respect of each Scheme by the Council in respect of the heads of
          expenditure set out in Part 1 to Schedule 6 or such other heads of expenditure as the
          Agency may in its absolute discretion agree in respect of any Scheme provided that any
          costs falling within the heads of expenditure set out in Part 2 to Schedule 6 shall not be
          capable of being treated as Eligible Costs;

          EIR means the Environmental Information Regulations 2004 and any subordinate
          legislation made under these provisions from time to time together with any guidance
          and/or codes of practice issued by the Information Commissioner in relation to the same or
          any associated legislation;

          EIR Exception means any applicable exemption to EIR;

          Employer's Agent means the employer's agent appointed pursuant to Condition 6;

          Employer's Agent Appointment means the letter or document which appoints the
          Employer's Agent;

          Employment and Opportunities Statement means the statement submitted by the
          Council to the Agency as part of its bid for grant funding;

          Excepted Disposal means the disposal of part or parts of the Property upon which an
          electricity sub-station, gas generator or pumping station or other statutory services or
          infrastructure have been or are to be constructed or installed and the immediate curtilage
          of the same together with ancillary easements;

          Exempted Information means any information that is designated as falling or potentially
          falling within the FOIA Exemptions or the EIR Exceptions;

          Expert Determination means has the meaning set out in Condition 16.4;

          FA 2004 means the Finance Act 2004;

          Final Scheme Costs means the sum which represents the aggregate of the Eligible Costs
          actually incurred or committed by the Council in respect of each Scheme as at the relevant
          Scheme Completion Date as such amount is certified by a chartered surveyor registered
          with the RICS;

          First Drawdown Date means the date upon which the Agency confirms to the Council
          that all of the First Tranche Conditions Precedent have been satisfied and which for the
          avoidance of doubt shall be no later than ten (10) Business Days after the date upon
          which the notice given by the Council pursuant to Condition 3.1.1 is received by the
          Agency;

          First Longstop Date means in respect of:


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                    (c)    a Round 1 Scheme, 31 March 2010;

                    (d)    a Round 2 Scheme, 31 March 2011; and

                    (e)    a Candidate Scheme such date (being no later than 31 March 2011) as
                           the Agency may agree;

                    or in respect of either (a) or (b) above such earlier date as my be agreed
                    between the parties;

          First Tranche Conditions Precedent means the conditions precedent (including where
          relevant dates for satisfaction of the same) set out in Part 1 of Schedule 2;

          First Tranche Grant means the amount of grant being fifty per centum (50%) of the
          Agreed Grant payable by the Agency to the Council in respect of the relevant Scheme as
          the same is set out in the Scheme Details;

          FOIA means the Freedom of Information Act 2000 and any subordinate legislation made
          under this Act from time to time together with any guidance and/or codes of practice
          issued by the Information Commissioner in relation to such legislation

          FOIA Exemption means any applicable exemption to FOIA;

          Full Reinstatement Cost means an amount sufficient to cover the cost of rebuilding and
          reinstating the Property including without limitation:

                    (a)    the cost of shoring up demolition and site clearance;

                    (b)    such professional fees as may be incurred in connection with rebuilding
                           or reinstating the Property;

                    (c)    any VAT on any of those costs; and

                    (d)    employers' third party and public liability risks;

          Good Industry Practice means that degree of skill, care, prudence and foresight and
          operating practice which would reasonably and ordinarily be expected from time to time of
          a skilled and experienced body (engaged in the same type of undertaking as that of the
          Council) or any of its Subcontractors (including the Service Provider)) or any
          Subcontractor under the same or similar circumstances;

          Grant Tranche means either of First Tranche Grant or Second Tranche Grant;

          Gross Recovery Value means the value of the whole Dwelling at the time of the
          Recovery Event provided by an independent valuer in accordance with the then current
          edition of the valuation manual of the RICS, or as otherwise agreed by the Agency acting
          reasonably;

          Gross Surplus Value means the value of the Council's interest in the Dwelling at the time
          of the Surplus Event provided by an independent valuer in accordance with the then
          current edition of the valuation manual of the RICS, or as otherwise agreed by the Agency
          acting reasonably;




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          Guidance means any applicable guidance standards, codes of practice or directions
          (including Regulator or Agency circulars) with which a RSL or other registered provider of
          social housing is from time to time expected to comply by the Regulator or Agency;

          HMRC means HM Revenue & Customs;

          Housing Management Accreditation Scheme means the scheme for the purpose of
          accrediting persons who provide services in connection with the management of social
          housing which is operated either by the Agency or by the Regulator pursuant to Section
          217 of the Housing and Regeneration Act 2008 or otherwise;

          HQI Profile means each housing quality indicator profile against which the Council set out
          the proposed quality of the completed Property in the Bid as accepted by the Agency
          through IMS and against which the completed Property is to be assessed and HQI Profiles
          shall be construed accordingly;

          IMS means the Agency‟s on-line investment management system from time to time or any
          successor system;

          Increase in Value (Proportion) or IVP means the amount calculated in accordance with
          the formula below representing the increase in value of a Dwelling subject to a Recovery
          Event:

          IVP = NV – AFSC

          provided that IVP can never be less than zero;

          Increase in Value (Surplus) or IVS means the amount calculated in accordance with the
          formula below representing the increase in value of a Dwelling subject to a Surplus Event:

          IVS = (NV – (AFSC – AG))

          provided that IVS can never be less than zero;

          Information Commissioner has the meaning set out in Section 6 of the DPA;

          Insured Risks means risks in respect of loss or damage by fire storm earthquake lightning
          explosion tempest subsidence land slip ground heave riot civil commotion malicious
          damage impact by vehicles and by aircraft and articles dropped from them (other than war
          risks) flood damage and leaking bursting and overflowing of water pipes water apparatus
          and Sewage pipes and such other risks as may be insured from time to time in
          accordance with Good Industry Practice;

          Intellectual Property Rights shall include without limitation all rights to, and any interests
          in, any patents, designs, trade marks, copyright, know-how, trade secrets and any other
          proprietary rights or forms of intellectual property (protectable by registration or not) in
          respect of any technology, concept, idea, data, program or other software (including
          source and object codes), specification, plan, drawing, schedule, minutes,
          correspondence, scheme, formula, programme, design, system, process logo, mark, style,
          or other matter or thing, existing or conceived, used, developed or produced by any
          person;




HSNG.1727874.1                                    6                                        SBS.51183.137
          Introductory Tenancy means a periodic tenancy which is an introductory tenancy by
          virtue of the provisions of Section 124 of the Housing Act 1996.

          Legal Opinion means the opinion described in First Tranche Condition Precedent 7;

          Legislation means any Act of Parliament:

                    (a)     any subordinate legislation within the meaning of Section 21(1) of the
                            Interpretation Act 1978;

                    (b)     any exercise of the Royal Prerogative; and

                    (c)     any enforceable community right within the meaning of Section 2 of the
                            European Communities Act 1972;

                    in each case in the United Kingdom;

          Letting means the letting of a Dwelling to a tenant upon a Secure Tenancy or an
          Introductory Tenancy (where the Council operates an Introductory Tenancy regime);

          Losses means all damages, losses, liabilities, costs, expenses (including legal and other
          professional charges and expenses) and charges whether arising under statute, contract
          or at common law, or in connection with judgments, proceedings, internal costs or
          demands suffered or incurred by the Agency including interest at 2% above the base rate
          from time to time of the Royal Bank of Scotland plc such interest to run from the date upon
          which the Losses are incurred until the date upon which the Agency receives full
          reimbursement of its Losses;

          Management Agreement means an agreement entered into between the Council and the
          Service Provider and referred to in Condition 9;

          Mechanical & Electrical Engineer means the mechanical and electrical engineer
          appointed or to be appointed by the Council in respect of a Scheme;

          Milestone means each Milestone set out in the Scheme Details;

          Milestone Date means the date set out in the relevant Scheme Details by which the
          relevant Milestone must have been achieved (as the same may be revised by the Agency
          in accordance with Condition 4.2.2 or 4.3'

          Milestone Extension Events means any of the following:

                    (a)     exceptionally adverse weather conditions;

                    (b)     delay in receipt of any necessary permission or approval of any
                            statutory body which the Council has taken all practicable steps to avoid
                            or reduce;

                    (c)     the exercise after the date of the Agreement by the United Kingdom
                            Government of any statutory power which directly affects the execution
                            of the Works by restricting the availability or use of labour which is
                            essential to the proper carrying out of the Works or preventing the




HSNG.1727874.1                                   7                                      SBS.51183.137
                           Council from, or delaying in, securing such goods or materials or such
                           fuel or energy as are essential to the proper carrying out of the Works;

                    (d)    the use or threat of terrorism and/or the activity of the relevant
                           authorities in dealing with such use or threat;

                    (e)    fire, explosion, lightning, storm, tempest, flood, bursting or overflowing
                           of water tanks, apparatus or pipes, ionising radiation, earthquakes, riot
                           and civil commotion;

                    (f)    failure by any statutory undertaker, utility company or other like body to
                           carry out works or provide services;

                    (g)    any accidental loss or damage to the development or any roads
                           servicing it;

                    (h)    any failure or shortage of power, fuel or transport;

                    (i)    any blockade or embargo;

                    (j)    any:

                    i      official or unofficial strike;

                    ii     lockout;

                    iii    go-slow; or

                    iv     other dispute generally affecting the house building industry or a
                           significant sector of it;

                    unless any of the events arises (directly or indirectly) as a result of any wilful
                    default or wilful act of the Council or any of its subcontractors;

          Milestone Failure means a failure by the Council fully to achieve any Milestone by the
          relevant Milestone Date;

          Net Value or NV means the value being:

                    (a)    Upon a Recovery Event, the Gross Recovery Value; or

                    (b)    Upon a Surplus Event, the Gross Surplus Value;

          of the relevant Dwelling less any Agreed Expenses evidenced in form satisfactory to the
          Agency ;

          NHBC means the National House-Building Council;

          Notification means a notification by HMRC to the Agency under Regulation 6(6) of the
          2005 Regulations;




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          Occupancy Agreement means an assured shorthold tenancy and/or an assured non-
          shorthold tenancy appropriate for use in respect of the Dwellings having regard to the
          Agreed Purposes;

          Open Book means the declaration of all price components including profit margins,
          central office overheads, site overheads, preliminaries, contingencies and the cost of all
          materials, goods, equipment, work and services with all and any books of accounts,
          correspondence, agreements, orders, invoices, receipts and other documents available for
          inspection;

          Personal Data has the meaning ascribed to it in the DPA;

          Planning Agreement means an agreement in respect of and affecting a Scheme made
          pursuant to Section 106 of the Town and Country Planning Act 1990 and/or Section 33 of
          the Local Government (Miscellaneous Provisions) Act 1982 and/or Section 38 and/or 278
          of the Highways Act 1980 and/or Section 104 of the Water Industries Act 1991 or an
          agreement with any competent authority or body relating to other services;

          Planning Longstop Date means the date which occurs nine (9) calendar months after the
          Planning Milestone Date;

          Planning Milestone Date means the date identified as such in the relevant Scheme
          Details as at the date of the Agreement;

          Planning Permission means the grant of detailed planning permission either by the local
          planning authority or the Secretary of State;

          Practical Completion means that stage in the execution of a Scheme when the Scheme
          has been completed in accordance with the terms of the relevant building contract and/or
          the terms of the Agreement being fit for beneficial occupation as a residential development
          in accordance with NHBC or equivalent requirements current at the date of inspection
          subject only to the existence of minor defects and/or minor omissions at the time of
          inspection which are capable of being made good or carried out without materially
          interfering with the beneficial use and enjoyment of the Scheme and which would be
          reasonable to include in a snagging list, and Practically Complete shall be construed
          accordingly;

          Pre-Qualification Questionnaire means the document entitled "2008-11 National
          Affordable Housing Programme Pre-qualification" issued by the Agency in May 2009;

          Previous Recovery or PR means any amounts previously recovered by the Agency
          following a Surplus Event attributable to the relevant Dwelling;

          Professional Team means the Architect, Civil & Structural Engineer, the Mechanical &
          Electrical Engineer and any other consultant appointed by the Council in connection with
          the Scheme;

          Programme means the programme comprising all of the Schemes which the Agency has
          agreed to fund under this Agreement pursuant to its Local Authority Newbuild programme.

          Prohibited Act means:




HSNG.1727874.1                                   9                                      SBS.51183.137
                    (a)     offering, giving or agreeing to give to any servant of the Agency any gift
                            or consideration of any kind as an inducement or reward:

                    i       for doing or not doing (or for having done or not having done) any act in
                            relation to the obtaining or performance of the Agreement; or

                    ii      for showing or not showing favour or disfavour to any person in relation
                            to the Agreement;

                    (b)     entering into the Agreement or any other agreement with the Agency
                            relative to the Agreement in connection with which commission has
                            been paid or has been agreed to be paid by the Council or on its behalf,
                            or to its knowledge, unless before the relevant agreement is entered
                            into particulars of any such commission and of the terms and conditions
                            of any such agreement for the payment thereof have been disclosed in
                            writing to the Agency ;

                    (c)     committing any offence:

                    i       under Legislation creating offences in respect of fraudulent acts;

                    ii      at common law in respect of fraudulent acts in relation to the
                            Agreement; or

                    iii     under the Prevention of Corruption Acts 1889-1916; or

                    (d)     defrauding or attempting to defraud or conspiring to defraud the Agency
                            or the Regulator;

          Project Documents means the agreements entered into by the Council for the
          performance of its obligations under the Agreement which are listed in Schedule 4;

          Property means in respect of each Scheme, the Site and/or the Dwellings and common
          areas developed as part of such Scheme;

          Prospectus means the document entitled "National Affordable Housing Programme 2008-
          11 Prospectus" published by the Corporation on 4th September 2007;

          Public Sector Subsidy means all funding or subsidy for a Scheme in money or money‟s
          worth (including the Agreed Grant) received or receivable by the Council from public
          sector bodies including for this purpose funding from the European Commission,
          government bodies (whether national or local) or bodies in receipt of lottery funds from the
          National Lottery Distribution Fund pursuant to the National Lotteries Acts 1993 and 1998;

          Quarter Date means 31 March, 30 June, 30 September or 31 December;

          Quarterly Report means the report described in Condition 15.1;

          Race Equality Requirements means the obligations to be performed by the Council in
          delivering the Scheme as set out in Schedule 5;

          Recovery Event means a disposal under Condition 11.6 and not Condition 11.7;




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          Regulator means the body corporate established pursuant to Section 81 of the Housing
          and Regeneration Act 2008;

          Relevant Authority means any court with the relevant jurisdiction and any local, national
          or supra-national agency, inspectorate, minister, ministry, official or public or statutory
          person of the government of the United Kingdom or of the European Union;

          Rented Final Scheme Costs means the amount of the Final Scheme Costs which
          represents the aggregate of the Eligible Costs incurred or committed by the Council in
          respect of each the elements of a Scheme which are Affordable Housing for Rent and at
          the Scheme Completion Date as such amount is certified by a chartered surveyor
          registered with the RICS;

          Rented Grant means the amount of Grant which relates to Affordable Housing for Rent as
          such amount is set out in the Scheme Details;

          Request for Information/RFI shall have the meaning set out in FOIA or any request for
          information under EIR which may relate to the Agreement or any business or activities of
          the Agency or the Council (as the case may be);

          Required Standards means the requirements of the Agreement, the Additional Design
          and Quality Standards, the Basic Design and Quality Standards, Good Industry Practice,
          Guidance, all Consents and Legislation;

          RICS means the Royal Institution of Chartered Surveyors;

          Right to Acquire means the statutory right to acquire established under Section 180 of
          the Housing and Regeneration Act 2008 (or for the period prior to that provision coming
          into force, Sections 16 and 16A of the Housing Act 1996);

          Right to Buy means the statutory right to buy established under Part V of the Housing Act
          1985;

          Round 1 Scheme means a scheme submitted by the Council for the development of
          Affordable Housing for Rent and included within the Agency's list of local authority
          newbuild Round 1 schemes announced on 9 September 2009; and

          Round 2 Scheme means a scheme submitted by the Council for the development of
          Affordable Housing for Rent and included within the Agency's list of local authority
          newbuild Round 2 schemes announced on 11 January 2010.

          RPI means the United Kingdom General Index of Retail Prices (all Items) or if such index
          is no longer published or if the basis of calculation is changed such other published index
          of retail prices or the value of money as the Agency shall decide;

          RSL means a body listed in the register of social landlords maintained pursuant to Section
          1 of the Housing Act 1996 or following the bringing into force of Section 278 of the
          Housing and Regeneration Act 2008, a body referred to in that Section;

          RTA Discount or RTA means the amount of any statutory discount given to a purchaser
          under the Right to Acquire;




HSNG.1727874.1                                   11                                     SBS.51183.137
          RTB Discount or RTB means the amount of any statutory discount given to a purchaser
          pursuant to the Right to Buy

          Scheme means each scheme for the development of the Dwellings (as described in the
          relevant Scheme Details) in respect of which the Agency has agreed to provide grant
          funding in accordance with the terms of the Agreement as varied from time to time in
          accordance with Condition 5.6;

          Scheme Completion Date means the date for completion of the relevant Scheme set out
          in the Scheme Delivery Timetable;

          Scheme Costs means the sum set out in the Scheme Details which represents the
          Council‟s estimate as at the date hereof of the aggregate of the Eligible Costs agreed by
          the Agency in respect of each Scheme;

          Scheme Delivery Timetable means the timetable for construction and completion of the
          Scheme as set out in the Scheme Details;

          Scheme Details means the descriptive and other details in respect of each Scheme as
          set out in Schedule 1 as varied from time to time in accordance with Condition 5.6;

          Second Drawdown Date means the date upon which the Agency confirms to the Council
          that all of the Second Tranche Conditions Precedent have been satisfied and which for the
          avoidance of doubt shall be no later than ten (10) Business Days after the date upon
          which the notice given by the Council pursuant to Condition 3.1.2 is received by the
          Agency;

          Second Longstop Date means in respect of:

                    (a)    a Round 1 Scheme, 31 March 2011;

                    (b)    a Round 2 Scheme, 31 March 2012; and

                    (c)    a Candidate Scheme, such date (being no later than 31 March 2012) as
                           the Agency may agree

                    or in respect of either (a) or (b) above such earlier date as may be agreed
                    between the parties.

          Second Tranche Conditions Precedent means the conditions precedent (including
          where relevant dates for satisfaction of the same) set out in Part 2 of Schedule 2;

          Second Tranche Grant means the amount of grant (being fifty per centum (50%) of the
          Agreed Grant) payable by the Agency to the Council in respect of the relevant scheme as
          the same is set out in the Scheme Details;

          Secure Tenancy means a periodic tenancy which is a secure tenancy by virtue of the
          provisions of Section 79 of the Housing Act 1985;

          Service Provider means the person other than the Council providing services to the
          Dwellings in accordance with Condition 9;




HSNG.1727874.1                                  12                                     SBS.51183.137
          Services means the tenancy management, repairs and maintenance and other services to
          be provided to the Dwellings;

          Significant Event means an event which could reasonably be considered to:

                    (a)     jeopardise the Council‟s or as the case may be the Service Provider‟s
                            ability to:

                    i       perform or continue to perform the Services or any of them

                    ii      comply with the terms of the Agreement;

                    (b)     prejudice the current or future well being or rights of the occupants of
                            the Dwellings; or

                    (c)     prejudice the reputation of the Agency or the programme pursuant to
                            which the Agreed Grant or any part thereof is paid;

          Site means the site described in the relevant Scheme Details;

          Site Plans means the site plans for each Scheme as annexed at Schedule 1;

          Start on Site means the earlier of commencement of:

                    (a)     excavation for strip or trench foundations or for pad footings;

                    (b)     digging out and preparation of ground for raft foundations;

                    (c)     vibrofloatation, piling, boring for piles or pile driving or (d) drainage work
                            specific to the buildings forming part of the Scheme;

          Start on Site Date means the date for start on site in respect of the relevant Scheme as
          set out in the Scheme Details (to be no later than 31 March 2010);

          Statutory Deduction means the deduction which is in force at the time of payment
          referred to in Section 61 of the FA 2004;

          Subcontractor means any subcontractor appointed by the Council to undertake all or part
          of the Works or to provide the Services;

          Surplus Event means a disposal under Condition 11.7;

          Target Rents means those rents as required by the Government's rent restructuring policy
          from time to time or any successor policy dealing with the levels of rent to be charged in
          respect of Affordable Housing for Rent to be calculated in accordance with and by
          reference to the document published by the Corporation and entitled Circular 04/08 or
          successor document published by the Regulator;

          TeCSA Adjudication Rules means version 2.0 (October 2002) of the TeCSA Adjudication
          Rules as amended from time to time;

          VAT means Value Added Tax as presently charged under the Value Added Tax Act 1994
          or any tax of a similar nature;



HSNG.1727874.1                                    13                                         SBS.51183.137
          Verification means a verification from HMRC under Regulation 6 of the 2005 Regulations;

          Warranties means the warranties set out in Schedule 3;

          Works means all of the works (including design, infrastructure works and all other works
          necessary for obtaining access to the Dwellings or Property) to be undertaken in order to
          ensure that the Dwellings and the Property meet the Required Standards and are
          constructed in accordance with the Scheme Details;

1.2       Interpretation

          1.2.1     The masculine includes the feminine and vice versa.

          1.2.2     The singular includes the plural and vice versa.

          1.2.3     Any reference in the Agreement to any condition, sub-condition, paragraph,
                    schedule, annexure, appendix or section heading is, except where it is
                    expressly stated to the contrary, a reference to such condition, sub-condition,
                    paragraph, schedule, annexure, appendix or section heading of the Agreement.

          1.2.4     Any reference in the Agreement or to any other document shall include (except
                    where expressly stated otherwise) any variation, amendment or supplement to
                    such document to the extent that such variation, amendment or supplement is
                    not prohibited under the terms of the Agreement.

          1.2.5     Any reference to any enactment, order, regulation or similar instrument shall
                    (except where expressly stated otherwise) be construed as a reference to the
                    enactment, order, regulation or instrument (including any EU instrument) as
                    amended, replaced, consolidated or re-enacted.

          1.2.6     A reference to a person includes firms, partnerships and corporations and their
                    successors and permitted assignees or transferees.

          1.2.7     Headings are for convenience of reference only.

          1.2.8     A party means a party to the Agreement.

          1.2.9     The words includes or including are to be construed without limitation.

          1.2.10    A paragraph in a Schedule or Appendix shall be construed as references to a
                    paragraph in that particular Schedule or, as the case may be, Appendix.

          1.2.11    In any case where the consent or approval of the Agency (or any officer of the
                    Agency ) is required or a notice is to be given by the Agency, such consent or
                    approval or notice shall only be validly given if it is in writing and signed by (if
                    relevant) the officer stipulated in the Agreement or such other person as may be
                    specified by the Agency by notice in writing to the Council.

          1.2.12    An obligation to do anything includes an obligation to procure its being done.

          1.2.13    Any restriction includes an obligation not to permit infringement of the
                    restriction.




HSNG.1727874.1                                   14                                        SBS.51183.137
          1.2.14   The term Property includes each and every part of it.

          1.2.15   Save where a contrary intention is shown, or where an express discretion is
                   given by the Agreement, the Agency shall act reasonably in exercising its rights
                   hereunder.

          1.2.16   If there is any ambiguity or conflict between the implied terms and the express
                   terms of the Agreement then the express terms shall prevail.

          1.2.17   The Council shall be responsible as against the Agency for the acts or
                   omissions of any Council Party as if they were the acts or omissions of the
                   Council.

          1.2.18   Neither the giving of any approval, consent, examination, acknowledgement,
                   knowledge of the terms of any agreement or document nor the review of any
                   document or course of action by or on behalf of the Agency shall, unless
                   otherwise expressly stated in the Agreement or agreed in writing by the Agency,
                   relieve the Council of any of its obligations under the Agreement or any of the
                   Project Documents or of any duty which it may have hereunder to ensure the
                   correctness, accuracy or suitability of the matter or thing which is the subject of
                   the approval, consent, examination, acknowledgement or knowledge nor confer
                   impose or imply any liability or responsibility on or on behalf of the Agency in
                   respect of or in connection with the matter to or in relation to which such
                   approval consent examination acknowledgement was given or review made.

          1.2.19   A reference to any power of the Regulator shall be construed as a reference to
                   the relevant power of the Regulator under the Housing and Regeneration Act
                   2008 once such power has been brought into force.




HSNG.1727874.1                                  15                                       SBS.51183.137
                       Annexure 2

                 Form of Deed of Covenant




HSNG.1727874.1              16              SBS.51183.137
Deed of Covenant

dated                                    200[ ]

Parties

(1)       Homes and Communities Agency, a body corporate under Section 1 of the Housing and
          Regeneration Act 2008, of 110 Buckingham Palace Road, London, SW1W 9SA (the
          Agency), and

(2)       Mansfield District Council of Civic Centre, Chesterfield Road South, Mansfield NG19
          7BH (the Council).

Operative clauses

Introduction

(A)       The Agency is empowered pursuant to the Transfer of Housing Corporation Functions
          (Modifications and Transitional Provisions) Order 2008 to exercise the functions of the
          Corporation under Section 27A of the Housing Act 1996.

(B)       The Agency has agreed pursuant to the terms of the Principal Agreement to make a grant
          to the Council under Section 27A Housing Act 1996 to facilitate the development of the
          Property for Affordable Housing for Rent.

(C)       The Council has agreed to use the Property for Affordable Housing for Rent and to enter
          into this Deed for the purpose of regulating certain disposals of the Property.

(D)       The regulatory functions of the Corporation were transferred to the Regulator on 1
          December 2008 under the Housing and Regeneration Act 2008.

1         Interpretation and Definitions

1.1       Definitions

          In this Deed where the context so admits:

          Affordable Housing for Rent means accommodation made permanently available for
          letting to persons on secure tenancy terms at Target Rents on the basis of housing need
          and to include those persons nominated by the relevant local authority;

          Business Day means any day other than a Saturday, Sunday or a statutory Bank Holiday;

          Capital Funding Guide means the Affordable Housing Capital Funding Guide published
          by the Agency from time to time on its website or any successor guide published by the
          Agency (or any successor body) from time to time;

          Certificate of Title means a certificate of title in a form satisfactory to the Agency;

          Dwelling means a house, flat or maisonette developed with the benefit of grant payable
          under the Principal Agreement;




HSNG.1727874.1                                     17                                        SBS.51183.137
          Excepted Disposal means a disposal:

                    (a)     which is an Exempt Disposal

                    (b)     to an RSL

                    (c)     pursuant to the Right to Acquire or Right to Buy;

                    (d)     of part or parts of the Property upon which an electricity sub-station, gas
                            generator or pumping station or other statutory services or infrastructure
                            have been or are to be constructed or installed and the immediate
                            curtilage of the same together with ancillary easements.

          Exempt Disposal means a disposal of a Dwelling to any person who is to occupy the
          Dwelling as that person's principal residence and as Affordable Housing for Rent

          Principal Agreement means the agreement dated on or about the date hereof and made
          between the Agency (1) and the Council (2) and any contract, deed or instrument entered
          into under or in connection therewith,

          Property means the land owned by the Council in respect of which the Agency has
          agreed to provide grant funding in accordance with the terms of the Principal Agreement
          as varied from time to time in accordance with Condition 5.6 of the Principal Agreement;

          Right to Acquire means the right conferred by Sections 16 and 16A of the Housing Act
          1996 as may be updated and replaced by the right under Section 180 of the Housing and
          Regeneration Act 2008 or by subsequent legislation;

          Right to Buy means the right conferred by section 118 of the Housing Act 1985 as may
          be updated and replaced by subsequent legislation;

          RSL means a body listed in the register of social landlords maintained under Section 1 of
          the Housing Act 1996 or following the bringing into force of Section 278 of the Housing
          and Regeneration Act 2008, a body referred to in that Section;

          Registration Undertaking means an undertaking in the form at Appendix 2;

          Rentcharge means a deed in the form at Appendix 1;

          Target Rents means rents as required by the Government‟s rent restructuring policy from
          time to time or any successor policy dealing with the levels of rent to be charged in respect
          of Affordable Housing for Rent to be calculated in accordance with Condition 5.9 of the
          Principal Agreement.

1.2       Interpretation

          1.2.1     References without further designation to a clause paragraph schedule or
                    appendix are references a clause paragraph or a schedule to or an appendix to
                    this Deed.

          1.2.2     The singular includes the plural and vice versa.

          1.2.3     Words of one gender include any other gender.



HSNG.1727874.1                                    18                                      SBS.51183.137
          1.2.4      An obligation to do anything includes an obligation to procure its being done.

          1.2.5      Any restriction includes an obligation not to permit infringement of the
                     restriction.

          1.2.6      References to particular legislation or part of it (statutory reference) are to that
                     statutory reference as it may have been extended modified amended or re-
                     enacted at the date upon which its construction is relevant for the purposes of
                     this Rentcharge and not as originally enacted or as at the date of that Deed and
                     include any derivative legislation.

          1.2.7      References generally to legislation include derivative legislation and any rights
                     from or other legislation of the European Union that is directly applicable in
                     England and Wales and include existing statutes and those that come into
                     effect while this Rentcharge subsists.

          1.2.8      Sections 78 and 79 of the Law of Property Act 1925 apply in this Deed and:

                     (a)     references to the Council include its successors in title and persons
                             deriving title under it or them and covenants given by the Council are
                             given by it for itself and for its successors in title and those deriving title
                             under it or them;

                     (b)     references to the Agency include its successors in title and persons
                             deriving title under it or them.

          1.2.9      The Property includes each and every part of it.

          1.2.10     When there are two or more persons affected by the obligations under this
                     Deed they are to bind each such person jointly and severally.

          1.2.11     If there is any ambiguity or conflict between the implied terms and the express
                     terms of this Deed then the express terms are to prevail.

          1.2.12     The headings above the clauses and the contents page of this Deed are for
                     reference only and do not affect its construction.

2         Covenants

2.1       In consideration of the Agreed Grant payable by the Agency under the Principal
          Agreement the Council covenants with the Agency in the terms set out in Schedule 1 to
          this Deed.

2.2       Each of the covenants shall be construed as a separate covenant and shall not be limited
          or restricted by reference to or inference from the terms of any other covenant or any
          clause of this Deed or the Principal Agreement.

2.3       In the event of any breach of any of the covenants the Agency will serve upon the Council
          notice of the breach and if within a period of fifty-six days following service of such notice
          (or such other period as the parties may agree) the breach has not been or is not capable
          of remedy the Agency shall be entitled to:

          2.3.1      claim damages for such breach from the Council; or


HSNG.1727874.1                                     19                                         SBS.51183.137
          2.3.2      require repayment of all or any part of the grants paid under the Grant
                     Agreement

          in each case in its absolute discretion.

2.4       Wherever possible, the Agency shall consult with the Council before commencing any
          action under this Deed.

3         Remedies for breach

          Any remedy conferred on the Agency for the breach of any covenant shall be in addition
          and without prejudice to all other rights and remedies available to it and the exercise of or
          failure to exercise any remedy shall not constitute a waiver by the Agency of any of its
          other rights and remedies.

4         Third party rights

          Nothing in this Deed is intended to confer any benefit on any person who is not a party to
          it.

5         Notices

          Any notice to be given hereunder shall be in writing and shall be sufficiently served if
          delivered by hand and receipted for by the recipient or sent by the Recorded Delivery
          Service addressed in the case of the Agency to its Chief Executive at 110 Buckingham
          Palace Road, Victoria, London SW1W 9SA or in the case of the Council to its Chief
          Executive at Civic Centre, Chesterfield Road South, Mansfield NG19 7BH or to such other
          addresses as either party may from time to time notify to the other in accordance with the
          provisions of this clause.

6         Severance

6.1       If any covenant or condition in this Deed is found by any court or administrative body of
          competent jurisdiction to be invalid or unenforceable that invalidity or unenforceability is to
          have no effect on the other covenants and conditions of this Deed and they will remain in
          full force and effect.

6.2       If any covenant or condition of the Agreement is found to be invalid or unenforceable but
          would be valid or enforceable if some part of the covenant or condition were deleted then
          the covenant or condition will apply with such modification as may be necessary to make it
          valid and enforceable.

7         Waiver and remedies

7.1       The failure to exercise or delay in exercising a right or remedy provided by this Deed or by
          law will not constitute:

          7.1.1      a waiver of the right or remedy; or

          7.1.2      a waiver of any other rights or remedies.

7.2       A waiver of a breach of any of the covenants or of any of the conditions of this Deed or of
          a default under this Deed will:



HSNG.1727874.1                                       20                                     SBS.51183.137
          7.2.1     not constitute a waiver of any other breach or default;

          7.2.2     not affect the other covenants or conditions of this Deed;

          7.2.3     not prevent a party from subsequently requiring compliance with the waived
                    covenant or condition.

7.3       The rights and remedies provided by this Deed are cumulative and (unless expressly
          otherwise provided in this Deed) are not exclusive of any rights or remedies provided by
          law.

8         No fetter on statutory functions

          Notwithstanding anything apparently or impliedly to the contrary in this Deed or any of the
          agreements and documents referred to herein, in carrying out its statutory duties or
          functions the discretion of the Agency shall not be fettered, constrained or otherwise
          unlawfully affected by the terms of this Deed or such other agreements and documents.

9         Survival of this Deed

          Insofar as any of the rights and powers of the Agency provided for in this Deed shall or
          may be exercised or exercisable after the termination or expiry of this Deed the provisions
          of this Deed conferring such rights and powers shall survive and remain in full force and
          effect notwithstanding such termination or expiry.

This Deed has been entered into on the date stated at the beginning.




HSNG.1727874.1                                   21                                     SBS.51183.137
                                   Schedule 1 (Deed Of Covenant)

                                     Covenants by the Council

The Council covenants with the Agency that:

1         Rentcharge on disposals other than Excepted Disposals

          On any disposal of the Property not being an Excepted Disposal the Council will procure
          that the disponee enters into the Rentcharge with the Agency

2         Other requirements

          Before the Rentcharge is entered into (where it is required on any disposal by Paragraph 1
          of this Schedule), the Council will procure that the disponee's solicitor provides:

2.1       a Certificate of Title

2.2       a Registration Undertaking

3         Payments

          On any disposal of all or any part of the Property which requires any payment to be made
          to the Agency under the Grant Agreement, to make that payment in accordance with the
          provisions of the Grant Agreement

4         HM Land Registry

4.1       It will apply to HM Land Registry for entry of a restriction in the proprietorship register of
          the title in the form required by this clause (Form L Schedule 4 Land Registration Rules
          2003):

          "No disposition of the registered estate by the proprietor of the registered estate, or by the
          proprietor of any registered charge, not being a charge registered before the entry of this
          restriction, is to be registered without a certificate signed by a conveyancer that the
          provisions of Schedule 1 to a Deed of Covenant dated [ ] and made between the Homes
          and Communities Agency (1) and [ ] (2) have been complied with or that they do not apply
          to the disposition."




HSNG.1727874.1                                    22                                       SBS.51183.137
THE COMMON SEAL of                               )
HOMES AND COMMUNITIES Agency                     )
was hereunder affixed in the presence of:        )



Authorised Signatory




[Council execution clause]




HSNG.1727874.1                              23       SBS.51183.137
                                              Appendix 1 (Deed of Covenant)

                                                    Form of Rentcharge1

                                                   HM LAND REGISTRY

                                              LAND REGISTRATION ACT 2002

ADMINISTRATIVE AREA                       :             [                               ]

TITLE NUMBER                              :             [                                ]

PROPERTY                                  :             [                                                  ]

THIS RENTCHARGE is made by deed the                              day of            200[ ]

Parties

(1)           Homes and Communities Agency, a body corporate under Section 1 of the Housing and
              Regeneration Act 2008, of 110 Buckingham Palace Road, London, SW1W 9SA (including
              any statutory successor) (the Agency) and

(2)           [                                                   ] [(company registration number                  )] whose
              registered office is at [                                                                             ] (the
              Purchaser);

Introduction

(A)           The Agency entered into an agreement with [                                                 ] (the Council) on
              [            ] (the Grant Agreement).

(B)           Under the Grant Agreement the Agency made grant available to the Council under Section
              27A of the Housing Act 1996 to facilitate the development of the Property for Affordable
              Housing.

(C)           The Council agreed pursuant to the Grant Agreement to procure that, save in certain
              circumstances, a subsequent purchaser of the Property entered into a rentcharge to
              secure inter alia the continuing use of the Property for Affordable Housing.

(D)           The Council is selling the Property to the Purchaser pursuant to the Sale Agreement. The
              Parties agree that the disposal is covered by the terms of Section 27B of the Housing Act
              1996.

(E)           This Rentcharge is an estate rentcharge created for the purposes specified in Section 2(4)
              of the Rentcharges Act 1977 which are (in brief) making covenants enforceable by the
              Agency against the Purchaser.

Agreed Terms

1             Definitions and interpretation

1.1           Definitions

1
  This form of Rentcharge is premised on the assumption that no disposal will be made by the Council prior to completion of the grant
funded units. If this is not the case, further amendment will be required.



HSNG.1727874.1                                                   24                                                  SBS.51183.137
          In this Rentcharge the following words and expressions have the meanings specified
          except when expressly stated to the contrary:

          Accredited Manager means a person accepted by the Regulator as satisfying the
          requirements of the Housing Management Accreditation Scheme;

          Affordable Housing for Rent means accommodation made permanently available for
          letting to persons on assured tenancy terms at Target Rents on the basis of housing need
          and to include those persons nominated by the relevant local authority;

          Agency’s Proportion means the amount calculated in accordance with paragraph 3 of
          Schedule 4;

          Agency’s Surplus means the amount calculated in accordance with paragraph 4 of
          Schedule 4;

          Agreed Purposes means the use of the Dwellings as Affordable Housing for Rent;

          Attributable Grant means has the meaning given in paragraph 1.1 of Schedule 4;

          Business Day means any day other than a Saturday Sunday or a statutory bank holiday
          in England;

          Capital Funding Guide means the Affordable Housing Capital Funding Guide published
          by the Agency from time to time on its website or any successor guide published by the
          Agency (or any successor body) from time to time;

          Consents means all permissions, consents, approvals, certificates, permit, licences, and
          authorisations of a Relevant Authority required for the performance of any of the
          Purchaser‟s obligations under this Rentcharge;

          Control means the power of a person (or persons acting in concert) to secure that the
          affairs of another are conducted directly or indirectly in accordance with the wishes of that
          person (or those persons acting in concert) whether by means of:

                    (a)     in the case of a company or industrial and provident society:

                    i       being the beneficial owner of more than fifty per centum (50%) of the
                            issued share capital of or of the voting rights in that company or society;
                            or

                    ii      having the right to appoint or remove a majority of the directors; or

                    iii     otherwise controlling the votes at board meetings of that company or
                            society by virtue of any powers conferred by:

                    A       the articles of association or the rules (as the case may be);

                    B       any shareholders' agreement; or

                    C       any other document regulating the affairs of that company or society;

                    (b)     in the case of a partnership:



HSNG.1727874.1                                    25                                         SBS.51183.137
                     i     being the beneficial owner of more than fifty per centum (50%) of the
                           capital of that partnership; or

                     ii    having the right to control the composition of or the votes to the majority
                           of the management of that partnership by virtue of any powers
                           conferred by:

                     A     the partnership agreement; or

                     B     any other document regulating the affairs of that partnership;

                     (c)   in the case of a limited liability partnership (LLP):

                     i     being the beneficial owner of more than 50% of the capital of that LLP;
                           or

                     ii    having the right to control the composition of or the votes to the majority
                           of the management of that LLP by virtue of any powers conferred by:

                     A     the members‟ agreement; or

                     B     any other document regulating the affairs of that LLP;

                     (d)   in the case of an individual being a connected person (as defined in
                           section 839 of the Income and Corporation Taxes Act 1988) to that
                           individual;

          Corporation means the Housing Corporation a body corporate established under the
          Housing Associations Act 1985 whose investment functions were transferred to the
          Agency and whose regulatory powers were transferred to the Regulator on 1 December
          2008 pursuant to the Housing and Regeneration Act 2008;

          Dwelling means each house, flat or maisonette as more particularly described in the
          Scheme Details transferred or to be transferred by the Council to the Purchaser;

          Employer's Agent means in respect of the Scheme the person appointed pursuant to
          Condition 6 of the Grant Agreement to carry out certain employer's agency services;

          [Excepted Units means

                 Excepted Unit Type         No. of Units             Plan Reference

                                                 []



          Full Reinstatement Cost means an amount sufficient to cover the cost of rebuilding and
          reinstating the Property including without limitation:

                     (a)   the cost of shoring up demolition and site clearance;

                     (b)   such professional fees as may be incurred in connection with rebuilding
                           or reinstating the Property;



HSNG.1727874.1                                   26                                      SBS.51183.137
                    (c)     any VAT on any of those costs; and

                    (d)     employers' third party and public liability risks;

                    and the level of cover must take into account inflation and escalation of costs;

          Good Industry Practice means that degree of skill, care, prudence, foresight and
          operating practice that would reasonably and ordinarily be expected from time to time of a
          skilled and experienced owner and operator of Affordable Housing for Rent under the
          same or similar circumstances;

          Green Light Compliant means retaining "Green Lights" in respect of all the areas
          measured and monitored by the Regulator Assessment or if such form of assessment
          shall be varied or replaced such other level of performance as may be considered by the
          Regulator to be equivalent or successive to that denoted by four (4) green lights under the
          Regulator Assessment (as at the date of this Deed);

          Grant means £[                  ];

          Grant Agreement means the agreement entered into between the Agency and the
          Council on [insert date of Grant Agreement];

          Grant Conditions means the conditions set out in Schedule 1;

          Guidance means any applicable guidance (whether made under Section 36 of the
          Housing Act 1996 or otherwise) standards, codes of practice or directions (including
          circulars) with which a RSL or other registered provider of social housing is from time to
          time expected to comply by the Agency or by the Regulator;

          Housing Management Accreditation Scheme means the scheme operated by the
          Regulator for the purpose of accrediting persons who provide services in connection with
          the management of social housing pursuant to Section 217 of the Housing and
          Regeneration Act 2008 or otherwise;

          Housing Management and Maintenance Services means the housing management and
          maintenance services to be provided to the Property by the Purchaser in response to and
          in compliance with the requirements of the Specifications;

          IMS means the Agency‟s on-line investment management system from time to time and/or
          any successor system;

          Inspection Ratings means the ratings from any assessment or inspection by the Audit
          Commission or any other regulatory body or organisation assessing or inspecting the
          performance of any of the Service Provider;

          Insured Risks means risks in respect of loss or damage by fire storm earthquake lightning
          explosion tempest subsidence land slip ground heave riot civil commotion malicious
          damage impact by vehicles and by aircraft and articles dropped from them (other than war
          risks) flood damage and leaking bursting and overflowing of water pipes water apparatus
          and sewage pipes and such other risks as may be insured from time to time in
          accordance with Good Industry Practice;




HSNG.1727874.1                                    27                                      SBS.51183.137
                Legislation means:

                              (a)        any Act of Parliament;

                              (b)        any subordinate legislation within the meaning of Section 21(1) of the
                                         Interpretation Act 1978;

                              (c)        any exercise of the Royal Prerogative; and

                              (d)        any enforceable community right within the meaning of Section 2 of the
                                         European Communities Act 1972;

                              in each case in the United Kingdom;

                Local Authority means [                                       ];2

                Losses means:

                              (a)        all liabilities incurred by the Agency;

                              (b)        all damage and loss suffered by the Agency;

                              (c)        all damages compensation and penalties awarded against the Agency;

                              (d)        all claims demands, actions and proceedings made or brought against
                                         the Agency;

                              (e)        all fees costs and expenses incurred by the Agency;

                              (f)        interest at two per centum (2%) above the base rate from time to time of
                                         the Royal Bank of Scotland plc from the due date of payment until the
                                         date of actual payment;

                Management Agreement means the agreement for the provision of housing management
                services entered into between the Purchaser and Service Provider pursuant to paragraph
                2.5 of the Grant Conditions;

                Manager means a receiver and manager of the Property and the rent profits and other
                income of the Property appointed under clause 7;

                Nominations Agreement means an agreement entered into or to be entered into
                between the Purchaser and the Local Authority pursuant to which the Local Authority will
                be entitled to nominate individuals and their households to all or some of the Dwellings as
                they become available for letting or disposal or such other form of legally binding
                agreement having an equivalent effect as the Local Authority may in writing approve;

                Notice means:

                              (a)        a full copy of any notice that has been served on the Purchaser under
                                         section 146 Law of Property Act 1925 specifying the breach that is the
                                         ground for re-entry; or


2
    Insert name of local authority in whose area the Dwellings are located.



HSNG.1727874.1                                                      28                               SBS.51183.137
                    (b)     a full copy of a written demand for payment of any money payable
                            under this Rentcharge served on the Purchaser the non-payment of
                            which is the ground for re-entry;

          Open Book means the declaration of all price components including profit margins,
          central office overheads, site overheads, preliminaries, contingencies and the cost of all
          materials, goods, equipment, work and services with all and any books of accounts,
          correspondence, agreements, orders, invoices, receipts and other documents available for
          inspection;

          Plan means the plan attached as Annex 2;

          Recovery Event means an event described in clause 13.1 of this Rentcharge;

          Regulator means the body corporate established pursuant to Section 81 of the Housing
          and Regeneration Act 2008;

          Regulator Assessment means the formal method by which the Regulator measures and
          assesses the performance of RSLs at the date hereof or any subsequent method or
          regime of performance assessment of RSLs (or any other registered provider of social
          housing) from time to time;

          Relevant Authority means any Court with relevant jurisdiction and any local national or
          supra-national agency inspectorate minister, ministry official, or public or statutory person
          of the Government of the United Kingdom or of the European Union;

          Rentcharge means the yearly sum of £1.00;

          Required Standards means the requirements of:

                    (a)     this Rentcharge;

                    (b)     the Specifications;

                    (c)     Good Industry Practice;

                    (d)     Guidance;

                    (e)     the Capital Funding Guide to the extent applicable to Schemes or
                            Dwellings of the type in the Scheme Details;

                    (f)     all Consents; and

                    (g)     Legislation;

          Resident's Charter means the Charter for Applicants and Residents for Affordable
          Housing Owned by a Body not Regulated with the Agency as the same may be modified,
          replaced or revised by Regulator from time to time;

          RICS means the Royal Institution of Chartered Surveyors;




HSNG.1727874.1                                    29                                      SBS.51183.137
          Right to Acquire means the right conferred by Sections 16 and 16A of the Housing Act
          1996 as may be updated and replaced by the right under Section 180 of the Housing and
          Regulator Act 2008 or body referred to in that Section;

          RSL means a body listed in the register of social landlords maintained pursuant to Section
          1 of the Housing Act 1996 or following the bringing into force of Section 278 of the
          Housing and Regeneration Act 2008, a body referred to in that Section;

          Sale Agreement means the agreement for the sale of the Property entered into between
          the Council (1) and the Purchaser (2) on [                            ];

          Scheme means the scheme for the development of the Dwellings as described in the
          Scheme Details;

          Scheme Details means the details in Schedule 5;

          Service Provider means any person providing services to the Property in accordance with
          paragraph 2.5 of Schedule 1;

          Services means:

                    (a)     the activities specified in clause 5; and

                    (b)     the reasonable contemplation preparation and service of any notices
                            under this Rentcharge;

          Services Costs means the Losses (if any) incurred by the Agency in providing or
          attempting to provide the Services;

          Significant Event means:

                    (a)     any deterioration in the Inspection Ratings of any person providing any
                            of the Housing Management and Maintenance Services; or

                    (b)     an event that could reasonably be considered to:

                    i       jeopardise the ability of the person providing them to perform or
                            continue to perform any of the Housing Management and Maintenance
                            Services;

                    ii      prejudice the current or future well-being or rights of the occupants of
                            the Dwellings; or

                    iii     prejudice the reputation of the Agency;

          Snagging Works means the works required to be undertaken by the Purchaser so as to
          rectify or remedy any matter notified to the Agency and the Council by the Employer's
          Agent;

          Specifications means the specifications in Annex 1 to this Rentcharge describing the
          minimum management service standards to be achieved by the Purchaser in respect of
          the Dwellings;




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          Standard Conditions means the Standard Commercial Property Conditions (First Edition)
          and Standard Condition shall mean any one of them;

          Subcontractor means any person appointed by the Purchaser to provide all or any of the
          Housing Management and Maintenance Services in relation to the Scheme;

          Target Rents means those rents as required by the Government‟s rent restructuring policy
          from time to time or any successor policy dealing with the levels of rent to be charged in
          respect of Affordable Housing for Rent to be calculated in accordance with paragraph 5 of
          Schedule 1;

          Works means all of the works (including design, infrastructure works and all other works
          necessary for obtaining access to the Dwellings or Property) to be undertaken in order to
          ensure that the Dwellings meet the standards required under the Grant Agreement and
          are constructed in accordance with the Scheme Details;

          VAT means Value Added Tax as charged under the Value Added Tax Act 1994 or any tax
          of a similar nature;

          Zone means a geographical zone prescribed by the Agency from time to time in which a
          Homebuy Agent operates.

1.2       Interpretation

          1.2.1     References without further designation to a clause paragraph schedule or
                    annex are references a clause paragraph or a schedule to or an annex to this
                    Rentcharge.

          1.2.2     The singular includes the plural and vice versa.

          1.2.3     Words of one gender include any other gender.

          1.2.4     An obligation to do anything includes an obligation to procure its being done.

          1.2.5     Any restriction includes an obligation not to permit infringement of the
                    restriction.

          1.2.6     References to particular legislation or part of it (statutory reference) are to that
                    statutory reference as it may have been extended modified amended or re-
                    enacted at the date upon which its construction is relevant for the purposes of
                    this Rentcharge and not as originally enacted or as at the date of that Deed and
                    include any derivative legislation.

          1.2.7     References generally to legislation include derivative legislation and any rights
                    from or other legislation of the European Union that is directly applicable in
                    England and Wales and include existing statutes and those that come into
                    effect while this Rentcharge subsists.

          1.2.8     Sections 78 and 79 of the Law of Property Act 1925 apply in this Rentcharge
                    and:




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                     (a)     references to the Purchaser include its successors in title and persons
                             deriving title under it or them and include the owners and occupiers for
                             the time being of the Property;

                     (b)     references to the Agency include its successors in title to this
                             Rentcharge and persons deriving title under it or them.

          1.2.9      The Property includes each and every part of it.

          1.2.10     When there are two or more persons affected by the obligations under this
                     Rentcharge they are to bind each such person jointly and severally.

          1.2.11     Controlled and cognate terms are to be construed in accordance with the
                     definition of Control.

          1.2.12     In relation to a person „persons acting in concert‟ are persons who actively
                     co-operate pursuant to an agreement or understanding (whether formal or
                     informal) with a view to obtaining or consolidating Control of that person.

          1.2.13     References to this Rentcharge are references to this Deed and to the
                     Rentcharge created by it.

          1.2.14     If there is any ambiguity or conflict between the implied terms and the express
                     terms of this Rentcharge then the express terms are to prevail.

          1.2.15     The headings above the clauses and the contents page of this Rentcharge are
                     for reference only and do not affect its construction.

          1.2.16     A reference to any power of the Regulator shall be construed as a reference to
                     the relevant powers of the Regulator under the Housing and Regeneration Act
                     2008 once such power has been brought into force.

          1.2.17     The provisions of Section 146 of the Law of Property Act 1925 shall apply to
                     this Rentcharge.

2         Grant of Rentcharge

          In consideration of ten pounds (£10) paid by the Agency (of which the Purchaser
          acknowledges receipt) the Purchaser grants this Rentcharge with full title guarantee to the
          Agency in fee simple.

3         Receipt for advance payment of Rentcharge

          The Agency acknowledges receipt of one hundred pounds (£100) as advance payment of
          the Rentcharge for the next hundred years from the date of this Rentcharge.

4         Purchaser’s covenants

          The Purchaser covenants so as to bind the Property (no matter who owns it in the future)
          with the Agency so that the benefit of the covenant is annexed to the Rentcharge to
          observe and perform the following covenants:

4.1       to use the Property for the provision of the Dwellings;



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4.2       to use the Dwellings for the Agreed Purposes;

4.3       not to do anything on the Property by reason of which the Agency may incur any Losses;

4.4       to pay the Rentcharge in advance without deduction or set off on the twenty-fifth day of
          December in every year;

4.5       to pay the Services Costs on demand; and

4.6       to comply with the Grant Conditions.

5         Rights granted to the Agency

5.1       The Purchaser grants to the Agency and all persons authorised by the Agency the right to
          enter the Property at reasonable times and on reasonable notice to inspect the Property
          so as to assess performance of the covenants set out in clause 4.

5.2       The Purchaser will as soon as reasonably practicable (and within no more than two
          months) after service on the Purchaser of a notice specifying a breach of the covenants in
          clause 4 (or sooner if reasonably required by the notice) remedy the breach if it is capable
          of remedy.

5.3       If the Purchaser does not comply with any notice served under clause 5.2 the Agency and
          all persons authorised by the Agency may enter the Property to remedy the breach and
          (without prejudice to anything else in this Rentcharge or to any other right of the Agency)
          the Purchaser will pay on demand all Losses arising from the Agency so doing.

5.4       For the purpose of this clause 5, the Regulator is a person authorised under clauses 5.1
          and 5.3.

6         Agency’s remedies

6.1       The remedies for recovering and compelling payment of rentcharges conferred by Section
          121 of the Law of Property Act 1925 apply to each of:

          6.1.1     this Rentcharge; and

          6.1.2     the performance by the Purchaser of the covenants in clause 4.

6.2       In addition to the remedies mentioned in clause 6.1 if there is any breach of the covenants
          in clause 4 or if there are any arrears of this Rentcharge then:

          6.2.1     the Agency may re-enter:

                    (a)     the Property;

                    (b)     any part of the Property; or

                    (c)     any part of the Property in the name of the whole;

                    and hold the land re-entered in fee simple free from incumbrances or:

          6.2.2     the Agency may enter:



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                    (a)    the Property; or

                    (b)    any part of the Property;

                    and do anything to remedy the breach and may remain in possession and in
                    receipt of the rents and profits of them respectively until all Losses arising from
                    the exercise of this power have been fully discharged and until all Losses have
                    been discharged there shall be a charge on the Property which shall be
                    enforceable by the Agency as an equitable charge in priority to any charges
                    created after the date of this Rentcharge.

6.3       At least two (2) months (or such longer period as is reasonable to allow time for the
          remedy of any breach that is capable of remedy) before the date of re-entry the Agency
          will serve Notice on:

                    (a)    the registered proprietor of any registered charge of the Property
                           (service to be at the address specified in the charges register);

                    (b)    the registered proprietor of any registered lease granted immediately
                           out of the Property of the Property (service to be at the address
                           specified in the proprietorship register); and

                    (c)    the registered proprietor of any registered charge of any registered
                           lease granted immediately out of the Property (service to be at the
                           address specified in the charges register);

          6.3.1     the Agency acknowledges that:

                    (a)    any breach of any covenant in this Rentcharge that is capable of
                           remedy may (but without limitation) be remedied by any of:

                    i      the Purchaser; and

                    ii     the registered proprietor of any registered charge of the Property;

                    (b)    any money payable under this Rentcharge may be paid by any of:

                    i      the Purchaser;

                    ii     the registered proprietor of any registered charge of the Property;

          6.3.2     the Agency agrees that:

                    (a)    the registered proprietor of any registered charge of the Property will be
                           deemed to be entitled to serve a counter-notice under section 1
                           Leasehold Property (Repairs) Act 1938 and to take the benefit of all the
                           consequences of such a counter-notice;

                    (b)    it will accept as validly served in accordance with the Leasehold
                           Property (Repairs) Act 1938 any counter-notice served under clause
                           6.3.2(a);




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                    (c)     all the covenants in this Rentcharge to be performed on the part of the
                            Purchaser are to be regarded as capable of remedy;

          6.3.3     notwithstanding anything else in this Rentcharge it is intended that this clause is
                    to benefit each of:

                    (a)     the Purchaser;

                    (b)     [the registered proprietor of any registered charge of the Property;]

                    (c)     the registered proprietor of any registered lease granted immediately
                            out of the Property; and

                    (d)     [the registered proprietor of any registered charge of any registered
                            lease granted immediately out of the Property;]

                    and their respective successors in title and the persons deriving title under
                    them;

          6.3.4     the rights in this clause are intended to be in addition to any rights given by:

                    (a)     law;

                    (b)     equity; or

                    (c)     any legislation.

6.4       The exercise of any remedy under this clause 6 shall have no effect on the operation of
          clauses 24 or 25.

7         Power to appoint a Manager

7.1       If in the opinion of the Agency there is any subsisting breach of this Rentcharge or at the
          request of the Purchaser the Agency may by writing under hand appoint any person as
          Manager.

7.2       The Agency may at any time and from time to time:

          7.2.1     remove any person appointed as Manager;

          7.2.2     appoint an additional person as Manager; or

          7.2.3     fix the remuneration of any Manager in accordance with clause 8.

7.3       Where more than one Manager is appointed they will have the power to act severally.

7.4       Any Manager will be the agent of the Purchaser for all purposes and the Purchaser will be
          solely responsible for their acts or defaults and for their remuneration.

7.5       In the appointment of the Manager the Agency may exclude any of the powers mentioned
          in clause 9.

7.6       The Manager will be entitled to exercise each of the powers mentioned in clause 9 that
          have not been excluded in the appointment in accordance with clause 7.5.


HSNG.1727874.1                                    35                                        SBS.51183.137
8         Remuneration of Manager

          The Manager will be entitled to receive by way of remuneration under clause 7.2.3
          commission at either:

8.1       a rate not exceeding five per centum on the gross amount of all money received by him; or

8.2       such other rate as the court thinks fit to allow an application made for that purpose by any
          of:

          8.2.1     the Manager;

          8.2.2     the Agency; or

          8.2.3     the Purchaser.

9         Powers of any Manager

9.1       Implied Powers

          Any Manager will have all the powers conferred on administrators and administrative
          receivers by Schedule 1 to the Insolvency Act 1986 except to the extent to which those
          powers are expressly or impliedly excluded by this Rentcharge.

9.2       Additional Powers

          In addition any Manager will have power whether in the name or on behalf of the
          Purchaser or otherwise to such extent and upon such terms as the Manager may in the
          Manager's absolute discretion think fit to do or omit to do anything which the Purchaser
          could do or omit to do in relation to:

          9.2.1     the Property;

          9.2.2     any business carried on at the Property; and

          9.2.3     to any chattels at or on the Property.

9.3       Particular Powers

          In particular (but without limitation) any Manager will have power whether in the name or
          on behalf of the Purchaser or otherwise:

          9.3.1     to take possession of collect and get in the Property and for that purpose bring
                    any proceedings in the name of the Purchaser or otherwise;

          9.3.2     to demand and recover all the income of or from the Property (by action distress
                    or otherwise) in the name of the Purchaser to the full extent of the estate or
                    interest of the Purchaser;

          9.3.3     to give effectual receipts accordingly for such income;

          9.3.4     to manage or carry on or concur in carrying on any business of the Purchaser
                    carried on at the Property;



HSNG.1727874.1                                   36                                      SBS.51183.137
          9.3.5    to raise or borrow money (whether from the Agency or otherwise) with or
                   without a mortgage or charge on the Property;

          9.3.6    in accordance with this Rentcharge and the Grant Conditions to:

                   (a)     sell;

                   (b)     lease;

                   (c)     vary renew or surrender leases;

                   (d)     accept surrenders of leases;

                   (e)     otherwise dispose of or deal with;

                   the Property or rights associated with it or to concur in so doing;

          9.3.7    to grant consents and licences;

          9.3.8    to carry out reviews of rent;

          9.3.9    to serve and respond to notices;

          9.3.10   to seize and sever all or any fixtures at or in the Property and deal with them
                   separately from other parts of the Property;

          9.3.11   to use any chattels of the Purchaser at or in the Property without being liable for
                   loss;

          9.3.12   to replace (if reasonable) any such chattels at the cost of the Purchaser;

          9.3.13   to settle arrange compromise or submit to arbitration any accounts claims
                   questions or disputes whatsoever which may arise in connection with any
                   business of the Purchaser or the Property or in any way relating to this
                   Rentcharge;

          9.3.14   to bring take defend compromise submit to arbitration or discontinue any
                   actions suits or proceedings whatsoever whether civil or criminal;

          9.3.15   to disclaim abandon or disregard all or any outstanding contracts of the
                   Purchaser and to allow time for payment of any debts either with or without
                   security;

          9.3.16   to repair insure manage protect improve enlarge develop build complete or
                   reconstruct or replace the Property;

          9.3.17   to apply for and obtain any appropriate permissions approvals consents or
                   licences;

          9.3.18   to acquire by purchase lease or otherwise any further property assets or rights;

          9.3.19   to appoint employ and dismiss managers officers contractors and agents;




HSNG.1727874.1                                     37                                    SBS.51183.137
          9.3.20     to elect to waive exemption under Schedule 10 paragraph 2(1) to the Value
                     Added Tax Act 1994 on behalf of the Purchaser in respect of the Property;

          9.3.21     to do any other acts and things that the Manager may consider necessary or
                     desirable for the preservation management improvement or realisation of the
                     Property or as the Manager may consider incidental or conducive to any of the
                     above matters or to the exercise of any of the above powers.

9.4       Money received by any Manager will be applied:

          9.4.1      in payment of the costs charges and expenses of and incidental to the
                     appointment of the Manager the exercise of all or any of the Manager's powers
                     and of all outgoings paid by the Manager (including preferential debts) and
                     compliance with any legal obligation;

          9.4.2      in payment to the Manager of such remuneration as may be agreed between
                     the Manager and the Agency at or at any time and from time to time after the
                     Manager's appointment;

          9.4.3      in or towards the discharge of the obligations of the Purchaser under:

                     (a)     any tenancies that affect the Property and satisfy the Grant Conditions;

                     (b)     any legal mortgages that affect the Property;

          9.4.4      in or towards the discharge of the Grant Conditions or settlement of any Losses
                     of the Agency incurred under this Rentcharge not otherwise discharged or
                     settled;

          and any surplus will be paid to the Purchaser or other persons entitled to it.

10        Protection of persons dealing with the Manager

10.1      No person dealing with any Manager appointed will be concerned bound or entitled to
          inquire or be affected by notice as to any of the following matters:

          10.1.1     whether the power to appoint a Manager under this Rentcharge has arisen or
                     become exercisable;

          10.1.2     whether any other power exercised or purported to be exercised under this
                     Rentcharge has arisen or become exercisable;

          10.1.3     the propriety regularity or purpose of the exercise or purported exercise of any
                     power under this Rentcharge;

          10.1.4     the necessity or expediency of the stipulations and conditions subject to which
                     any disposition will be made.

10.2      The receipt of the Manager for any money will effectually discharge the person paying
          from such matters and from being concerned to see to the application or being answerable
          for the loss or misapplication of such money.

10.3      The Purchaser acknowledges and confirms that it:



HSNG.1727874.1                                    38                                       SBS.51183.137
          10.3.1     Will have no remedy or recourse (in account or other costs) against any
                     Manager for any thing done or omitted to be done by the Manager in good faith
                     and for proper purposes in the exercise or purported exercise of any power
                     confirmed by this Rentcharge;

          10.3.2     The proper purposes of the powers conferred on any Manager by this
                     Rentcharge includes (without limitation) reducing or attempting to reduce the
                     extent of any breach of any of the covenants made enforceable by this
                     Rentcharge

          10.3.3     That in the exercise or proportional exercise in good faith and for proper
                     purposes by the Manager he may do things that reduce the rents and other
                     income that may be generated by the Property;

10.3.4     That the use of the Property for the Agreed Purposes includes letting it at rents that are
           less than rack rents.

10.4      In clause 10.3 references to the Manager include the Agency for such time (if any) as it
          may be in possession of the Property.

11        Release of Rentcharge

          Schedule 2 applies to the release of this Rentcharge by the Agency.

12        Disposals of the Property

12.1      Except as specified in this clause 12 the Purchaser will not dispose of the Property without
          the prior written consent of the Agency such consent not to be unreasonably withheld or
          delayed.

12.2      The Purchaser may (on the condition that the disposal does not result in a flying freehold
          within the meaning of paragraph 1 Schedule 2 Commonhold and Leasehold Reform Act
          2002 notwithstanding amendment or repeal of that provision) dispose of the Property by
          an instrument in any form without the consent of the Agency to any person who:

          12.2.1     is to take any interest in any Excepted Unit;

          12.2.2     grants to the Purchaser so as to be annexed to all those parts of the Property
                     that are not comprised in the disposition and to this Rentcharge the rights that
                     would have been enjoyed by that land if there had been two separate
                     purchases when the Purchaser had made simultaneous dispositions of the land
                     comprised in the disposition and all those parts of the Property that are not
                     comprised in the disposition; and

          12.2.3     grants so as to annex to the Rentcharge all easements, profits à prendre and
                     other rights whatsoever that are granted so as to be annexed to those parts of
                     the Property that are not comprised in the disposition.

12.3      Without prejudice to clause 12.1 the Purchaser agrees that it will be reasonable for the
          Agency to withhold its consent if either at the date of application for consent or at any date
          before the Agency‟s consent is given any of the following circumstances applies:

          12.3.1     any sum due from the Purchaser under this Rentcharge remains unpaid;


HSNG.1727874.1                                    39                                       SBS.51183.137
          12.3.2   any material breach of this Rentcharge by the Purchaser has not been
                   remedied;

          12.3.3   the proposed disponee does not have sufficient:

                   (a)     financial standing;

                   (b)     organisational standing and capacity; or

                   (c)     reputation;

                   for it to be reasonable for the Agency to assume that it will comply with this
                   Rentcharge to the extent applicable;

          12.3.4   the proposed disponee is not an RSL which is Green Light Compliant;

          12.3.5   the Regulator has issued or has notified the Agency that it is intending to issue
                   a direction under Section 106 of the Housing and Regeneration Act 2008 in
                   respect of the proposed disponee; or

          12.3.6   the disposal is the grant of a mortgage or legal charge which if made would
                   have an adverse effect on the Agency's rights under this Rentcharge or its
                   ability to enforce those rights.

12.4      Any application for consent to a disposal required under clause 12.1 must be
          accompanied by:

          12.4.1   full written details setting out all the terms and conditions of the disposal;

          12.4.2   where the proposed disponee is an incorporated body certified copies of the
                   proposed disponee‟s audited accounts for each of the two financial years
                   immediately preceding the date of the application for consent to the disposal the
                   latest audited accounts being to a date not more than ten (10) months before
                   the date of such application in so far as such accounts are available for recently
                   incorporated bodies and where not available comfort satisfactory to the Agency
                   that the arrangement with the proposed disponee does not constitute a
                   Collective Investment Scheme as defined in Section 235 of the Financial
                   Services and Markets Act 2000;

          12.4.3   when the proposed disposal is under clause 13.2 a copy of the Nominations
                   Agreement or such other arrangement to be entered into by the disponee with
                   the Local Authority as the Local Authority may require;

          12.4.4   references from the proposed disponee‟s bankers confirming that the proposed
                   disponee is considered good for the obligations under this Rentcharge;

          12.4.5   a copy of the form of the instrument to effect the disposal which must:

                   (a)     provide for the Agency to execute it by deed;

                   (b)     require the proposed disponee to pay directly to the Agency either:

                   i       the Agency‟s Surplus in accordance with clause 13.2; or



HSNG.1727874.1                                   40                                         SBS.51183.137
                    ii      the Agency‟s Proportion plus the repayment of the Attributable Grant in
                            accordance with clause 13.1;

                    (c)     contain a receipt from the Agency for the Agency‟s Surplus or the
                            Agency‟s Proportion and the repayment of the Attributable Grant as
                            applicable.

12.5      The Agency may by written notice to the Purchaser waive the requirement in clause
          12.4.5(b) and if it does so then on any disposal the Purchaser (and not the disponee) must
          pay to the Agency:

          12.5.1    the Agency‟s Surplus in accordance with clause 13.2; or

          12.5.2    the Agency‟s Proportion plus the repayment of the Attributable Grant in
                    accordance with clause 13.1.

12.6      If at any time before a disposal to which the Agency has expressly consented under
          clause 12.1 any of the circumstances specified in clause 12.3.3 applies the Agency may
          revoke its consent to the disposal by written notice to the Purchaser.

12.7      If the instrument effecting any disposition under this clause 12.7 has been approved under
          clause 12.8 the Purchaser may dispose of the Property without the consent of the Agency
          to any person who:

          12.7.1    is to occupy the Property as that person's principal residence and as Affordable
                    Housing for Rent; or

          12.7.2    is entitled to require a disposition of the Property under:

                    (a)     the Right to Acquire;

                    (b)     compulsory purchase powers under any legislation.

12.8      The instrument effecting any disposition under clause 12.7 must:

          12.8.1    where the disposal is under clause 12.7.1:

                    (a)     contain certificates to the Agency from the Purchaser and the disponee
                            that the disposition satisfies clause 12.7;

                    (b)     be in writing in a form which has the written approval from time to time
                            of the Agency such approval not to be unreasonably withheld or
                            delayed;

          12.8.2    where the disposal is under clause 12.7.2:

                    (a)     contain certificates to the Agency from the Purchaser and the disponee
                            that the disposition satisfies clause 12.7;

                    (b)     be executed by the Agency as a deed;

                    (c)     require the proposed disponee to pay directly to the Agency the
                            Agency‟s Proportion plus the repayment of the Attributable Grant;



HSNG.1727874.1                                      41                                  SBS.51183.137
                     (d)    contain a receipt from the Agency for the Agency‟s Proportion and the
                            repayment of the Attributable Grant;

          12.8.3     The Agency may by written notice to the Purchaser waive the requirement in
                     clause 12.8.2(c) and if it does so then on any disposal the Purchaser (and not
                     the disponee) must pay to the Agency the Agency‟s Proportion and also repay
                     the Attributable Grant to the Agency;

12.9      Any application for approval under clause 12.8 must be accompanied by a copy of the
          proposed instrument.

12.10     On any disposition under clause 12.7 any charge that arises under Section 156 of the
          Housing Act 1985 will be held by the Purchaser on trust for the Agency absolutely.

12.11     Without prejudice to clause 12.10 the Purchaser will:

          12.11.1    immediately procure the entry at HM Land Registry of a restriction in Form L in
                     the relevant title specifying the Agency as the person whose consent is required
                     while any charge that arises under Section 156 of the Housing Act 1985
                     subsists;

          12.11.2    immediately procure protection at HM Land Registry of any charge that arises
                     under Section 156 of the Housing Act 1985 by Unilateral Notice (under Section
                     34(2)(b) of the Land Registration Act 2002) in the relevant title specifying the
                     Agency as the beneficiary of the Unilateral Notice;

          12.11.3    immediately on receipt from HM Land Registry of confirmation on the entry of
                     the restriction and the Unilateral Notice send to the Agency an official copy of
                     the relevant title.

12.12     Without prejudice to clause 12.11 or to the need for any consent mentioned in that clause
          the prohibition in clause 12.1 on disposals without consent does not apply to:

          12.12.1    any estate or interest in the Property that was acquired in accordance with
                     clause 12.7; or

          12.12.2    any estate or interest in the Property that is derived out of an estate or interest
                     that is of the kind specified in clause 12.12.1.

13        Recovery Events and Surplus Events: Payments on disposals

13.1      Subject to clause 13.2, on any disposal of a Dwelling that is not:

                     (a)    a disposal under clause 0; or

                     (b)    a disposal of an estate or interest that arose on a disposal under clause
                            12.7.1;

          the Purchaser will procure payment by the disponee of the Agency‟s Proportion (and not
          the Agency's Surplus) plus the repayment of the Attributable Grant to the Agency in
          accordance with clause 12.




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13.2      On any disposal that is not a disposal under clause 12.7.1 of any Dwelling used as
          Affordable Housing for Rent (whether the Dwelling is occupied or not) which is to be used
          as Affordable Housing following such disposal the Purchaser will procure payment to the
          Agency by the disponee of only the Agency‟s Surplus (and not the Agency's Proportion) in
          accordance with clause 12.

13.3      Until any payment due under clause 13 has been made all monies due under clause 13
          will be a charge on the Property which will be enforceable by the Agency as an equitable
          charge in priority to any charges created after the date of this Rentcharge.

14        Determination of value on disposals

          Amounts under clause 13 may be:

14.1      agreed; or

14.2      determined in accordance with clause 15.

15        Arbitrator

15.1      If any amount or value under this Rentcharge is not agreed within one month of a written
          request, such amount or value may be determined on the application of either or both the
          Purchaser and the Agency by a single arbitrator in accordance with:

          15.1.1       the Arbitration Act 1996; and

          15.1.2       the then current edition of the valuation manual of the RICS.

15.2      The arbitrator under clause 15.1 may be appointed:

          15.2.1       by the Purchaser and the Agency jointly; or

          15.2.2       if not so appointed within one month of a written request then by the President
                       or other proper officer of the RICS on the application of either or both the
                       Purchaser and the Agency.

15.3      The costs of the arbitration will be borne either equally or as the arbitrator directs.

16        [Not Used

17        No apportionment

17.1      There will be no apportionment binding the Agency of the Rentcharge or the Services
          Costs on any disposal of part of the Property but each part of the Property will remain
          subject to and charged with the full amount of the Rentcharge and the Services Costs.

17.2      The Purchaser will not make any application under Section 4 of the Rentcharges Act 1977.

18        Not Used

19        Not Used

20        Validity of consents



HSNG.1727874.1                                     43                                         SBS.51183.137
          Any consent under this Rentcharge will be valid only:

20.1      if made by deed;

20.2      for a period of three (3) months from its date unless acted upon within that period;

20.3      if it contains:

          20.3.1      a covenant by the disponee with the Agency to be bound by all of the
                      obligations of the Purchaser in this Rentcharge;

          20.3.2      an acknowledgement by the disponee of the subsistence and validity of this
                      Rentcharge;

          20.3.3      an advance payment of the Rentcharge for the hundred years from the date of
                      the consent taking into account any advance payment of the Rentcharge
                      whether under clause 3 or otherwise.

21        HM Land Registry

          The Purchaser will apply to HM Land Registry for entry of a restriction in the proprietorship
          register of the title in the form required by this clause 21 (Form L Schedule 4 Land
          Registration Rules 2003).

          "No disposition of the registered estate (other than a charge) by the proprietor of the
          registered estate or by the proprietor of any registered charge is to be registered without a
          certificate signed on behalf of [           ] of [     ] by a conveyancer that the
          provisions of clauses 12 and 13 of [specify details of this Rentcharge] have been complied
          with."

22        Third party rights

          Nothing in this Rentcharge is intended to confer any benefit on any person who is not a
          party to it except that (without prejudice to clause 1.2.8) the covenants in clauses 24 and
          25 are intended to benefit any persons listed in those clauses respectively.

23        Perpetuities

          If any of the powers incident to or annexed to this Rentcharge is subject to the rule against
          perpetuities then such powers shall be exercisable only during the life of the last survivor
          of the descendants now living of His late Majesty King George V or within the period of
          twenty-one (21) years after the death of such survivor and such further period (if any) as
          may be permitted by law.

24        Protection of affordable housing occupants

24.1      Against any person listed in clause 24.2 the Agency will neither:

          24.1.1      seek to recover the Services Costs; nor

          24.1.2      seek to enforce compliance with any of the covenants in this Rentcharge.

24.2      Any:



HSNG.1727874.1                                    44                                      SBS.51183.137
          24.2.1    person who occupies any part of the Property as their principal residence and
                    as Affordable Housing for Rent; or

          24.2.2    person who has purchased a leasehold interest in any part of the Property
                    under the Right to Acquire or under statutory compulsory purchase powers; and

          24.2.3    (without prejudice to clause 1.2.8) successors in title to persons mentioned in
                    clause 24.2 and persons deriving title under them.

25        Protection of occupants of Excepted Units

25.1      Against any person listed in clause 25.2 or 25.3 the Agency will neither:

          25.1.1    seek to recover the Services Costs; nor

          25.1.2    seek to enforce compliance with any of the covenants in this Rentcharge.

25.2      Any person who occupies any Excepted Unit.

25.3      (without prejudice to clause 1.2.8) successors in title to persons mentioned in clause 25.2
          and persons deriving title under them.

26        Value added tax

          Except when expressly stated to the contrary in this Rentcharge:

26.1      the amount of any payment or the value of any supply is expressed exclusive of VAT
          properly chargeable on it; and

26.2      where any payment or taxable supply falls to be made pursuant to this Rentcharge VAT
          properly chargeable on it will be paid in addition by the recipient of the supply for which
          payment (if any) is consideration on the provision of a valid VAT invoice for it.

27        Interest on late payments

          Without prejudice to clause 4 where the Purchaser receives or recovers (whether as
          trustee for or on behalf of the Agency or otherwise) any payment under or pursuant to this
          Rentcharge including (without limitation) the equitable charges at clauses 12.10 and 13.3
          the Purchaser will:

27.1      notify the Agency immediately of such receipt or recovery;

27.2      hold the sums received or recovered on trust for the Agency absolutely;

27.3      upon request by the Agency immediately pay such sums to the Agency together with
          interest at no less than two per centum (2%) above the base rate from time to time of the
          Royal Bank of Scotland plc accruing from the date of receipt or recovery of such sums by
          the Purchaser until the date of actual payment of such sums to the Agency provided
          always that this clause does not limit the monies to which the Agency would otherwise be
          entitled under the provisions of trust law.




HSNG.1727874.1                                   45                                     SBS.51183.137
28        Waiver and remedies

28.1      The failure to exercise or delay in exercising a right or remedy provided by this Rentcharge
          or by law will not constitute:

          28.1.1     a waiver of the right or remedy; or

          28.1.2     a waiver of any other rights or remedies.

28.2      A waiver of a breach of any of the covenants or of any of the conditions of this Rentcharge
          or of a default under this Rentcharge will:

          28.2.1     not constitute a waiver of any other breach or default;

          28.2.2     not affect the other covenants or conditions of this Rentcharge;

          28.2.3     not prevent a party from subsequently requiring compliance with the waived
                     covenant or condition.

28.3      The rights and remedies provided by this Rentcharge are cumulative and (unless
          expressly otherwise provided in this Rentcharge) are not exclusive of any rights or
          remedies provided by law.

29        Severance

29.1      If any covenant or condition in this Rentcharge is found by any court or administrative
          body of competent jurisdiction to be invalid or unenforceable that invalidity or
          unenforceability is to have no effect on the other covenants and conditions of this
          Rentcharge and they will remain in full force and effect.

29.2      If any covenant or condition of this agreement is found to be invalid or unenforceable but
          would be valid or enforceable if some part of the covenant or condition were deleted then
          the covenant or condition will apply with such modification as may be necessary to make it
          valid and enforceable.

30        Variations of housing management and maintenance services

30.1      In this clause Variation means any variation of the Housing Management and
          Maintenance Services or to the terms of the Specifications.

30.2      The Agency may from time to time make Variations.

30.3      The Agency will have regard in making any Variation to any of:

          30.3.1     Required Standards from time to time;

          30.3.2     the matters in Section 36 (2) Housing Act 1996; and

          30.3.3     standards or codes of practice issued by the Regulator pursuant to Sections
                     193 and 195 of the Housing and Regeneration Act 2008.

30.4      Variations will take effect on the earlier of:




HSNG.1727874.1                                      46                                   SBS.51183.137
          30.4.1    twenty (20) Business Days after written notice to the Purchaser; or

          30.4.2    twenty (20) Business Days after publication of the fact of their having been
                    made on the Agency‟s (or Regulator's) website and in the London Gazette or
                    any of them.

This Rentcharge has been executed as a deed and is delivered and takes effect on the date stated at
the beginning of it.




HSNG.1727874.1                                  47                                        SBS.51183.137
                                            Schedule 1

                                      The Grant Conditions

1         Interpretation

          References without further designation to a paragraph are references to a paragraph of
          this Schedule.

2         Housing management and maintenance services

2.1       The Purchaser will:

          2.1.1     carry out the Housing Management and Maintenance Services to the Required
                    Standards;

          2.1.2     ensure that the Dwellings are kept in good structural and decorative order;

          2.1.3     comply with all other requirements of the Specifications and the Resident's
                    Charter;

          2.1.4     complete any Snagging Works to the Required Standards within twenty (20)
                    Business Days of receipt of any completion certificate issued by the
                    Independent Certifier or such other period as the Agency may direct acting
                    reasonably.

2.2       The Purchaser will ensure that in exercising its rights and performing the obligations under
          this Rentcharge and in selecting and appointing any Subcontractor it complies at all times
          with:

          2.2.1     Legislation;

          2.2.2     Good Industry Practice;

          2.2.3     Guidance; and

          2.2.4     the Capital Funding Guide as updated, revised and replaced from time to time
                    to the extent applicable to Schemes or Dwellings of the type described in the
                    Scheme Details.

2.3       The Purchaser will not agree any variation to the written instrument approved or deemed
          to have been approved pursuant to the provisions of clauses 12 without the prior written
          approval of the Agency such approval not to be unreasonably withheld or delayed .

2.4       Clause 12 applies to any instrument to be approved under paragraph 2.3.

2.5       Where the Housing Management and Maintenance Services are or are to be provided to
          the Dwellings by a Service Provider the Purchaser will ensure that:

          2.5.1     the Housing Management and Maintenance Services are provided pursuant to
                    a valid enforceable and legally binding Management Agreement entered into
                    between the Purchaser and the Service Provider in respect of the Property;




HSNG.1727874.1                                   48                                      SBS.51183.137
          2.5.2    the Service Provider is an Accredited Manager;

          2.5.3    the Service Provider is:

                   (a)     a member of the Housing Ombudsman Service or any successor
                           scheme approved by the Regulator; and

                   (b)     will comply with the decisions of such Housing Ombudsman;

          2.5.4    suitable arrangements are in place to ensure that the Services are continuously
                   provided to the Dwellings by an Accredited Manager notwithstanding any
                   termination or suspension of the Management Agreement pursuant to the
                   exercise by the Agency or the Regulator of the rights (which the Purchaser
                   acknowledges) referred to in paragraph 2.6.5 or otherwise.

2.6       Any Management Agreement must reflect Good Industry Practice and Guidance and
          impose:

          2.6.1    suitable obligations on the Service Provider to ensure on a continuing basis that
                   the Dwellings are kept in good structural and decorative order and that the
                   Housing Management and Maintenance Services are provided to the Required
                   Standards;

          2.6.2    suitable obligations on the Service Provider to obtain and maintain membership
                   of the Housing Ombudsman Scheme, to comply with the decisions of the
                   Housing Ombudsman and to maintain its status as an Accredited Manager;

          2.6.3    a suitable and legally enforceable right (together with an necessary ancillary
                   rights including without limitation in relation to intellectual property rights) for the
                   Agency or the Regulator (without incurring any liability to the Service Provider
                   or the Purchaser) to step in and to take such action as it deems appropriate in
                   connection with the Housing Management and Maintenance Services if it
                   reasonably believes either that the Service Provider is in breach of the terms
                   referred to in paragraphs 2.6 or that the Service Provider‟s activities threaten to:

                   (a)     prejudice or damage the reputation of the Agency or the Regulator; or

                   (b)     prejudice the current or future wellbeing or rights of the occupants of the
                           Dwellings;

          2.6.4    suitable obligations on the Service Provider to observe and comply with the
                   terms of the Resident's Charter;

          2.6.5    suitable rights exercisable at the direction of the Agency or the Regulator
                   (acting reasonably) for the Purchaser to terminate or suspend the employment
                   of the Service Provider under the Management Agreement where:

                   (a)     the Service Provider‟s Accredited Manager status is withdrawn or
                           relinquished;

                   (b)     the Service Provider ceases to be a member of the Independent
                           Housing Ombudsman Scheme; or




HSNG.1727874.1                                    49                                         SBS.51183.137
                    (c)    the Service Provider is in material or persistent breach of its obligations
                           under the Management Agreement;

          2.6.6     suitable terms requiring the Service Provider to provide such co-operation and
                    information as the Agency and/or the Regulator may reasonably require from
                    time to time, including the submission of performance reports compliance with
                    the Agency‟s and/or the Regulator's published performance assessment
                    regime, participation in all such performance re-assessment exercises as the
                    Agency and/or the Regulator may determine and notification of any Significant
                    Events.

2.7       The Agency has the right to direct the Purchaser to terminate the Management Agreement
          if in the reasonable opinion of the Agency the circumstances in paragraph 2.6.5 cease to
          apply and the Purchaser will so terminate the Management Agreement within twenty (20)
          Business Days of receipt of the Agency‟s direction.

2.8       Where the Housing Management and Maintenance Services are to be provided to the
          Dwellings by the Purchaser the Purchaser must:

          2.8.1     be and remain an Accredited Manager;

          2.8.2     be and remain a member of the Housing Ombudsman Service and will comply
                    with the decisions of the Housing Ombudsman;

          2.8.3     comply with the Agency's or the Regulator's performance assessment regime
                    including but without limitation such performance reassessment exercises as
                    the Agency or Regulator may require.

3         Information and accounts

3.1       Without prejudice to paragraphs 3.2 to 3.5 inclusive the Purchaser will provide to the
          Agency or to the Regulator (where so directed by the Agency) such information as it may
          reasonably require from time to time including (without limitation):

          3.1.1     the completion of a CORE log for all lettings and sale;

          3.1.2     the submission of a Regulatory and Statistical Return (Long Form); and

          3.1.3     any successor returns or requirements to those in sub-paragraphs 3.1.1 and
                    3.1.2;

          each in such format as reasonably required by the Agency from time to time.

3.2       The Purchaser must, as and when requested by the Agency make available to the Agency
          a copy of each of:

          3.2.1     all data, materials, documents and accounts of any nature created, acquired or
                    brought into existence in any manner whatsoever by or on behalf of the
                    Purchaser for the purposes of this Rentcharge; and

          3.2.2     all such data, materials, documents and accounts created, acquired or brought
                    into existence by the Purchaser‟s officers, employees, agents or consultants




HSNG.1727874.1                                   50                                      SBS.51183.137
                      relating to the Schemes and which have been supplied to the Purchaser for the
                      purposes of this Rentcharge.

3.3       The Purchaser must at all times:

          3.3.1       maintain a full record of particulars of all the income received and expenditure
                      incurred by the Purchaser in respect of the development of each Scheme;

          3.3.2       when reasonably required to do so by the Agency, provide a summary of any of
                      the income and expenditure referred to in paragraph 3.3.1 as the Agency may
                      reasonably require (in such form as the Agency may reasonably specify from
                      time to time) to enable it to monitor the performance by the Purchaser of its
                      obligations under this Rentcharge; and

          3.3.3       provide such facilities as the Agency may reasonably require for its
                      representatives to visit any place where the records are held and examine the
                      records maintained under this paragraph.

3.4       On the release of this Rentcharge, the Purchaser will (if requested so to do so) deliver up
          to the Agency all the data, materials, documents and accounts referred to in paragraph 3
          which it has in its possession custody or control and shall procure the handing over to the
          Agency such data materials, documents and accounts referred to in paragraph 3.2.2 or as
          otherwise directed by the Agency.

3.5       The Purchaser will be responsible for proving the accuracy of any facts or figures referred
          to in this Rentcharge and the Purchaser will prove (where requested to do so) the
          accuracy of any such facts or figures on an Open Book basis.

3.6       The Purchaser must promptly notify the Agency of any Significant Event.

4         Insurance

4.1       The Purchaser must keep the Property insured with a reputable insurance office for the
          Full Reinstatement Cost against loss or damage by the Insured Risks.

4.2       The Purchaser ‟s obligations in paragraph 4.1 do not apply to the extent that the insurance
          is vitiated in whole or in part by any act or omission of any person except:

          4.2.1       the Purchaser; or

          4.2.2       any person under the Control of the Purchaser.

4.3       The Purchaser will be deemed to have fulfilled its obligations under paragraph 4.1 even if
          the insurance is subject to reasonable excesses exclusions and conditions.

4.4       The Purchaser will not be obliged under this paragraph 4 to effect any insurance against a
          peril which:

          4.4.1       is for the time being uninsurable; or

          4.4.2       can only be insured at a premium that (in the reasonable opinion of Agency) is
                      excessive.




HSNG.1727874.1                                     51                                     SBS.51183.137
4.5       The Purchaser will give to the Agency a copy of its insurance policies (or other evidence
          acceptable to the Agency acting reasonably from the insurers of the terms of the
          insurance) of the Property under this Schedule.

4.6       The Purchaser will promptly give written notice to the Agency of any changes made to the
          insurance under this Schedule.

4.7       At the request of the Agency the Purchaser will give the Agency a copy of the receipt for
          the payment of the last premium or other evidence acceptable to the Agency acting
          reasonably that the insurance under this Schedule is up-to-date and that there is no
          outstanding premium.

4.8       Not used.

4.9       The Agency will not do anything that:

          4.9.1        renders the insurance under this paragraph 4 vitiated void or voidable; or

          4.9.2        increases the premiums payable for such insurance.

4.10      Following damage to or destruction of the Property by any of the Insured Risks the
          Purchaser will diligently apply the proceeds of the insurance covering reinstatement and
          rebuilding costs for those purposes so as to achieve reinstatement and rebuilding as soon
          as reasonably practicable and will make up any shortfall out of its own monies.

4.11      The Purchaser‟s obligations in paragraph 4.10 will not apply if the Purchaser has used
          reasonable endeavours to obtain necessary planning permission or other consents but is
          unable to obtain those needed for the reinstatement or rebuilding of the Property or for a
          building similar to the Property in terms of size amenity and character.

4.12      If the Property is substantially damaged or destroyed the Agency may not object to the
          reinstatement or rebuilding resulting in Property that is not identical to the Property
          immediately before the damage or destruction so long as the Property (as reinstated or
          rebuilt) is of equivalent or better standard and affords amenities that are not inferior to or
          deficient from those immediately before the damage or destruction.

4.13      If either:

          4.13.1       the Purchaser is an insurance company; or

          4.13.2       any group company (within the meaning of Section 42 of the Landlord & Tenant
                       Act 1954) of the Purchaser is an insurance company;

          then the Purchaser will be entitled to effect and maintain insurance under this Schedule in
          its own offices.

4.14      If the whole or any part of the Property cannot be effectively reinstated within three years
          of the date of destruction or damage then the obligations of the Purchaser in paragraphs
          4.10 will be terminated in relation to the whole or part of the Property affected on payment
          of the Agency‟s Proportion of the insurance proceeds applicable to the part affected.

4.15      The amount of the insurance payable to the Agency under paragraph 4.14 may be:




HSNG.1727874.1                                     52                                      SBS.51183.137
          4.15.1     agreed; or

          4.15.2     determined in accordance with clause 15 of the Rentcharge.

4.16      Until paid the amount of the insurance payable to the Agency under paragraph 4.14 shall
          be a charge on the Property which shall be enforceable by the Agency as an equitable
          charge in priority to any charges created after the date of this Rentcharge.

5         Rent and service charge restrictions

5.1       Affordable housing for rent

          5.1.1      The Purchaser must charge the weekly rent (the Rent) for each Dwelling that is
                     Affordable Housing for Rent as set out for the relevant type of Dwelling in the
                     Scheme Details.

          5.1.2      Except for within the first twelve months of any tenancy, the Purchaser must not
                     increase the Rent more than once in any consecutive period of twelve months.

          5.1.3      The Purchaser must not increase the Rent (when compared with the Rent
                     payable immediately before the relevant rent increase date) by more than RPI +
                     0.5% per annum subject to any changes in Government policy in relation to rent
                     increases in Affordable Housing and the Purchaser must comply with any such
                     changes.

5.2       Not Used

5.3       Not Used

5.4       Service charges

          5.4.1      The Purchaser must in respect of the Dwellings charge the service charge in
                     the Scheme Details and calculated in accordance with the Specifications.

          5.4.2      The Purchaser must:

                     (a)    not increase the service charge for each Dwelling for services which
                            have benefited and continue to benefit such Dwelling more than once in
                            any consecutive 12 month period nor by more than RPI + 0.5% per
                            annum;

                     (b)    comply with any change in Government policy about the increase of
                            service charge that affect Dwellings under this paragraph 5.4.

          5.4.3      If following consultation with tenants and leaseholders affected by a proposed
                     new service a new service is introduced then the Purchaser will charge no
                     more than the cost of the provision of such service plus a fair and reasonable
                     administration fee and such amounts will be increased annually thereafter in the
                     manner in paragraph 5.4.2.

6         Nominations Agreement




HSNG.1727874.1                                   53                                     SBS.51183.137
6.1       The Purchaser must enter into and discharge its obligations under the Nominations
          Agreement.

6.2       Without the prior written consent of the Agency the Nominations Agreement must not be:

          6.2.1     terminated;

          6.2.2     varied; or

          6.2.3     replaced.

6.3       The application for consent to termination variation or replacement of the Nominations
          Agreement must be accompanied by full written details setting out all:

          6.3.1     the circumstances that make termination variation or replacement seem
                    desirable to the Purchaser;

          6.3.2     the terms and conditions of the termination variation or replacement.

7         Obligations in the Grant Agreement

          The Purchaser agrees to observe and perform any unperformed obligation in the Grant
          Agreement in respect of the Works and all agreements entered into in respect thereof to
          the extent it is legally able to do so.

8         Communications and publicity

8.1       The Purchaser will ensure that:

          8.1.1     the Agency‟s requirements in relation to signage for capital projects as
                    published from time to time are observed and implemented in respect of each
                    Scheme;

          8.1.2     the following wording or such other wording as the Agency may notify to the
                    Purchaser from time to time is included within letters and literature welcoming
                    new tenants and residents of the Dwellings:

                    “Your home was funded by the Homes and Communities Agency, (the
                    government housing and regeneration agency with responsibility for the
                    National Affordable Housing Programme), which plans to invest over £2.5
                    billion each year in creating affordable homes all over England between 2008
                    and 2011.”

          8.1.3     the following wording or such other wording as the Agency may notify to the
                    Purchaser from time to time is included within all press releases for
                    developments within the Property in the section entitled Notes to Editors:

                    "The Homes and Communities Agency (Agency) is the Government's new
                    single national housing and regeneration agency for England. It brings
                    together the development and regeneration expertise of English Partnerships,
                    investment functions of the Housing Corporation, and the Academy for
                    Sustainable Communities, with major delivery programmes of Communities and
                    Local Government.



HSNG.1727874.1                                  54                                      SBS.51183.137
                    Its role is to create opportunities for people to live in high quality, sustainable
                    places. We provide funding for affordable housing, bring land back into
                    productive use and improve quality of life by raising standards for the physical
                    and social environment."

          8.1.4     neither it nor any sub-contractor communicates with representatives of the
                    press, television, radio or other communications media on any matter
                    concerning or in connection with this Rentcharge or the Grant without the prior
                    written approval of the Agency (such approval not to be unreasonably withheld
                    or delayed).

8.2       Without prejudice to paragraph 8.1, the Purchaser will:

          8.2.1     notify the Agency‟s Corporate Press Office and Communication Team (or such
                    other persons performing the same or similar role) of any publicity plan, event
                    or communication which it proposes to implement, hold or issue;

          8.2.2     obtain the approval of the Agency‟s Press Office and Communications Team to
                    such publicity plan, event or communication prior to its implementation, holding
                    or issue;

          8.2.3     ensure that all press releases issued in respect of any Scheme acknowledge in
                    the body of their text the fact and amount of the Agency‟s grant contribution to
                    the Scheme.




HSNG.1727874.1                                   55                                       SBS.51183.137
                                             Schedule 2

                                       Release of Rentcharge

1         Interpretation

1.1       References without further designation to a paragraph are references to a paragraph of
          this Schedule.

1.2       The Release will affect only such part of the Property as is specified in the written request
          of the Purchaser and references to the Property are to be construed accordingly.

2         Agreement to release

          In consideration of ten pounds (£10) paid by the Purchaser (receipt of which the Agency
          acknowledges) the Agency agrees to discharge the Rentcharge with full title guarantee if:

2.1       the freehold estate in the Property is transferred in accordance with clause 12 to an RSL
          that gives written acknowledgement to the Agency of the amount (being the Attributable
          Grant as defined in Schedule 4) deemed (under Section 27B(2) of the Housing Act 1996)
          to be grant received under Section 18 of the Housing Act 1996 and the Agency‟s Surplus
          has been paid to the Agency in respect of the Property transferred; or

3         Value

          Any amount due under paragraph 2 is to be calculated in accordance with Schedule 4 and
          in particular the Gross Value (as defined in Schedule 4) is to be determined on the
          assumptions that:

3.1       this Schedule does not affect the Property;

3.2       on discharge of the Rentcharge the Purchaser will have full vacant possession of the
          Property;

3.3       the Property has the benefit of such planning and any other permissions as:

          3.3.1        may reasonably be expected to be granted; and

          3.3.2        would maximise the value of the Property.

4         Determination of value

          The amounts due under paragraph 2 may be:

4.1       agreed; or

4.2       determined in accordance with clause 15 of the Rentcharge.

5         Section 84 Law of Property Act 1925

5.1       Without prejudice to Section 84(7) of the Law of Property Act 1925 the Purchaser will not
          make any application to the Lands Tribunal or to the Court under Section 84 of the Law of
          Property Act 1925 in relation to any restriction imposed by this Schedule until it has



HSNG.1727874.1                                    56                                      SBS.51183.137
          exhausted all reasonable endeavours (including Court proceedings but not an appeal from
          any decision of the Court) to secure a discharge of the relevant restriction under this
          Schedule.

5.2       If any restriction is modified or discharged under Section 84 of the Law of Property Act
          1925 then the Purchaser will pay to the Agency the balance (if any) between any sum
          ordered to be paid and the sum that would be calculated under paragraph 2 on discharge
          of the relevant restriction under this Schedule.

6         Title

6.1       The Purchaser admits and agrees that:

          6.1.1     the Agency has deduced title to the Rentcharge to the Purchaser;

          6.1.2     the Purchaser has investigated and accepted that title;

          6.1.3     the Purchaser will raise no requisitions or objections concerning that title except
                    in relation to any matters that have arisen after the date of this Schedule;

          6.1.4     Standard Condition 4.1.1 does not apply to this Schedule.

7         Completion

7.1       Completion of the Release will take place:

          7.1.1     at the offices of the Agency‟s solicitors or where they may reasonably direct;

          7.1.2     twenty Business Days after agreement of determination of market value under
                    paragraph 4;

8         Standard Conditions

          This Schedule incorporates the Standard Conditions.

9         Third party rights

          Nothing in this Schedule is intended to confer any benefit on any person who is not a party
          to it.

10        HM Land Registry

10.1      The Agency consents to the entry of an agreed notice in the charges register of the title to
          the Rentcharge at HM Land Registry within three (3) months of the date of this
          Rentcharge.

10.2      The Purchaser will not make any application to HM Land Registry for any entry in the title
          to the Rentcharge relating to this Schedule except that mentioned in paragraph 10.1.

10.3      If the Purchaser has not made the application mentioned in paragraph 10.1 within three
          months of the date of this Rentcharge the obligation of the Agency in paragraph 2 to
          discharge the Rentcharge will absolutely cease.




HSNG.1727874.1                                   57                                       SBS.51183.137
                 Schedule 3

                 Not Used




HSNG.1727874.1       58       SBS.51183.137
                                                          Schedule 4

            Calculation of Attributable Grant, Agency’s Proportion and Agency’s Surplus

1            Definitions and interpretation

1.1          In this Schedule the following words and expressions have the meanings specified except
             where expressly stated to the contrary:

             Agreed Expenses means any valuation legal and administration costs reasonably and
             properly incurred by the Purchaser and evidenced in a form satisfactory to the Agency in
             disposing of any Dwelling up to a maximum of £1,500 including irrecoverable VAT
             (indexed) per Dwelling;

             Attributable Final Scheme Costs or AFSC means

                           the amount of the Rented Final Scheme Costs attributed to such Dwelling being
                           the Rented Final Scheme Costs multiplied by the percentage of the internal
                           floor space for such Dwelling as a proportion of [insert the total internal floor
                           space for all Dwellings comprising Affordable Housing for Rent in the Scheme];

                           Attributable Grant means the Attributable Rented Grant (ARG) calculated in
                           accordance with paragraph 2.1;

             Final Scheme Costs or FSC means [insert figure];3

             Gross Recovery Value means the value of the whole Dwelling at the time of the
             Recovery Event provided by an independent valuer in accordance with the then current
             edition of the valuation manual of the RICS, or as otherwise agreed by the Agency at its
             complete discretion;

             Gross Surplus Value means the value of the Purchaser's interest in the Dwelling at the
             time of the Surplus Event (subject, for the avoidance of any doubt, to the Rentcharge
             continuing to encumber such Dwelling) provided by an independent valuer in accordance
             with the then current edition of the valuation manual of the RICS, or as otherwise agreed
             by the Agency at its complete discretion;

             Increase in Value (Proportion) or IVP means the amount calculated in accordance with
             the formula below representing the increase in value of a Dwelling subject to a Recovery
             Event:

             IVP = (100% – PEP) x (NV – AFSC)

             provided that IVP can never be less than zero.

             Increase in Value (Surplus) or IVS means the amount calculated in accordance with the
             formula below representing the increase in value of a Dwelling subject to a Surplus Event:

             IVS = (NV – (AFSC – AG))

             provided that IVS can never be less than zero
3
 The figure to be inserted here is the aggregate of the Eligible Costs incurred by the Council in respect of the completed Scheme as
certified by a chartered surveyor registered with RICS.



HSNG.1727874.1                                                  59                                                  SBS.51183.137
             Net Value or NV means the value being:

                           (a)       upon a Recovery Event, the Gross Recovery Value; or

                           (b)       upon a Surplus Event, the Gross Surplus Value;

             of the relevant Dwelling less any Agreed Expenses evidenced in form satisfactory to the
             Agency;

             Previous Recovery or PR means any amounts previously recovered by the Agency
             following a Surplus Event attributable to the relevant Dwelling;

             Recovery Event means an event described in clause 13.1 of this Rentcharge;

             Rented Final Scheme Costs means [insert figure];4

             Rented Grant means [insert figure];5

             RTA Discount or RTA means the amount of any statutory discount given to a purchaser
             under the Right to Acquire;

             Surplus Event means an event described in clause 13.2 of this Rentcharge;

1.2          All measurements of internal floor space to be undertaken pursuant to this Schedule
             and/or in relation to any definitions contained in paragraph 1.1 of this Schedule shall be
             measured by reference to the Net Internal Area as defined in and otherwise in accordance
             with the then current edition of the RICS Code of Measuring Practice (or as otherwise
             agreed by the Agency).

2            Calculation of Attributable Grant to be repaid

             The amount of Attributable Grant to be repaid upon a Recovery Event shall be calculated
             according to Clause 2.1 set out below.

2.1          Attributable Rented Grant

             Upon the disposal of a Dwelling which is Affordable Housing for Rent, the Attributable
             Rented Grant to be repaid to the Agency shall be calculated as follows:

             ARG = RG x (IFS / TRIFS)

             Where:

             ARG       Attributable Rented Grant

             RG        Rented Grant

             IFS       internal floor space for the relevant Dwelling



4
  The figure to be inserted here is the amount of the Final Scheme Costs incurred by the Council in respect of those elements of the
completed Scheme which are Affordable Housing for Rent as certified by a RICS registered chartered surveyor.
5
  The figure to be inserted here is the amount of Grant provided to the Council in respect of Affordable Housing for Rent at the
Scheme.



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          TRIFS internal floor space for all Dwellings in the Scheme which are Affordable Housing
                for Rent namely [insert figure]

2.2       Not Used

2.3       Not Used

3         Calculation of the Agency’s proportion

          The Agency‟s Proportion shall be calculated pursuant to the relevant formula set out below
          depending on the type and circumstances of the disposal . Save where expressly stated
          to the contrary, in no circumstances shall the Agency‟s Proportion ever be less than zero.

3.1       Disposal under the Right to Acquire

          Where a Dwelling is disposed of under the Right to Acquire, the Agency‟s Proportion shall
          be calculated as follows:

          HP = ((AG/AFSC) x (IVP) – PR) – RTA

          [expanded: HP = ((AG/AFSC) x (NV – AFSC) – PR) – RTA]

          Where:

          HP       Agency‟s Proportion

          AG       Attributable Grant

          AFSC Attributable Final Scheme Costs

          AG       Attributable Grant

          AFSC Attributable Final Scheme Costs

          IVP      Increase in Value (Proportion)

          PR       Previous Recovery

          RTA      RTA Discount

          provided that where the Agency's Proportion calculated pursuant to this paragraph is less
          than zero, such negative amount may be set off against the repayment of the Attributable
          Grant in relation to such Dwelling as calculated under paragraph 2.1.

3.2       Not Used

3.3       Any other disposal (or release of the Rentcharge other than upon a disposal) giving
          rise to payment of the Agency’s Proportion not covered above

          Upon a Recovery Event under circumstances not in paragraph 3.1 or upon a release of
          the Rentcharge otherwise than upon a disposal, the Agency‟s Proportion shall be
          calculated as follows:

          HP = (AG/AFSC) x (IVP) – PR


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          [Expanded: HP = (AG/AFSC) x ((100% – PEP) x (NV – AFSC)) – PR]

          Where:

          HP       Agency‟s Proportion

          AG       Attributable Grant

          AFSC Attributable Final Scheme Costs

          IVP      Increase in Value (Proportion)

          PR       Previous Recovery

4         Calculation of the Agency’s Surplus

          The Agency‟s Surplus shall be calculated pursuant to the formula set out below provided
          that the Agency‟s Surplus shall in no circumstances be less than zero:

          HS = (AG/AFSC) x (IVS)) – PR

          [Expanded: HS = (AG/AFSC) x (NV – (AFSC – AG)) – PR]

          Where:

          HS       Agency‟s Surplus

          AG       Attributable Grant

          AFSC Attributable Final Scheme Costs

          IVS      Increase in Value (Surplus)

          PR       Previous Recovery




HSNG.1727874.1                                      62                               SBS.51183.137
                                                          Schedule 5

                                                       Scheme Details6

Housing Description                                                   [Number of dwellings/unit mix/location plan to be
                                                                      inserted]

Basic Design and Quality Standards                                    [To be inserted]

Additional Design and Quality Standards                               [To be inserted]

Agreed Client Groups                                                  [To be inserted]

Starting Rent (pw)                                                    [To be inserted]

Starting Service Charge (pw)                                          [To be inserted]

Rent and Service Charge Uplift Reductions                             [To be inserted]




6
    This information may need to be expanded depending on when the transfer takes place.



HSNG.1727874.1                                                   63                                        SBS.51183.137
                                              Annex 1

                                           Specifications

 Homes and Communities Agency: minimum specifications for housing management service
                                    standards

                                              Contents

1. Introduction and definition of terms                               2

2. Lettings specification                                             5

3. Repairs and maintenance specification                             10

4. Equality and diversity specification                              18

5. Dealing with anti-social behaviour specification                  22

6. Tenancy management specification                                  25

7. Residents‟ rights and obligations in tenancy agreement/lease
   specifications                                                    29

8. Governance and finance                                            32




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1         Introduction and definition of terms

          These specifications cover six areas of service:

1.1       lettings;

1.2       repairs and maintenance;

1.3       equality and diversity;

1.4       dealing with anti-social behaviour;

1.5       tenancy management;

1.6       residents‟ rights and obligations in tenancy agreement/lease.

2         Definition of terms

2.1       Balanced scheme lettings & local lettings policies

          Local lettings plans aimed at balancing the mix of households, in order to avoid an over-
          concentration of certain types of household (eg, families with young children or teenagers,
          or people convicted of antisocial behaviour) which might place the neighbourhood under
          stress.

2.2       Choice-based lettings (CBL)

          A system that allows applicants for social housing (and tenants who want to transfer) to
          apply for advertised vacancies in accordance with targets which the Department for
          Communities and Local Government has set for all local authorities to implement CBL by
          2010.

2.3       Common allocation policy

          An agreement between two or more landlords to adopt an agreed framework for assessing
          and prioritising applications for housing.

2.4       Common housing register

          A single register used by local authorities and housing associations in an area to receive
          and process housing applications.

2.5       CORE

          A system to record information on lettings and sales by housing associations, and on
          lettings by local authorities which collects a range of data, including on household
          characteristics, economic status, ethnicity, reason for housing and previous tenure.

2.6       Decent Homes

          The minimum standard that all social housing in England must reach by 2010, which
          includes provision for health and safety, comfort, energy efficiency, standard of repair, and
          modern facilities.



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2.7       The Homes and Communities Agency

          The non-departmental public body that inter alia funds housing associations and other
          organisations to build new social housing, which is referred to throughout this document as
          the Agency and includes any successor body.

2.8       Not used

2.9       Not Used

2.10      Leasehold Valuation Tribunal (LVT)

          An independent panel with jurisdiction to determine on certain service charge matters
          under dispute, which are brought before the panel by either a leaseholder or a landlord.

2.11      Nomination agreement

          A co-operation document setting out how other social landlords will help the local authority
          to fulfil its statutory duties in meeting the housing needs of the district.

2.12      Partnering contract

          Working together to achieve a clearly defined and agreed set of mutual goals, as in the
          Egan report, Rethinking Construction, and its successors.

2.13      Relevant authorities

          Government departments, the Agency, the Regulator, the Audit Commission, their
          successors or replacements and any other body recognised in this context by the
          government or the Agency.

2.14      Not Used

2.15      Not Used

2.16      Stakeholders

          People, or their representatives, who have a direct interest in the relevant matters. Those
          who are, in whole or part, paying for the relevant provision through rent, service charge, or
          other requirement. Those who have a direct interest in the provision as it affects their
          health, safety or quiet enjoyment of their property.

2.17      Stock profile

          Information on stock relating to property size and type, age, facilities, etc.

2.18      Tenancies

          Assured periodic tenancy: a tenancy that rolls forward from week to week or month to
          month, rather than being for a fixed term. Includes Assured Tenancies.

          Assured shorthold tenancy: a shorthold form of tenancy. Includes two types of tenancy to
          tackle ASB: starter tenancies, used for the first 12 months before conversion to an assured



HSNG.1727874.1                                     66                                      SBS.51183.137
          periodic tenancy, and demoted tenancies. The latter are granted by court order in cases of
          ASB. If no breach of the tenancy agreement follows, the tenancy reverts to assured
          periodic status after 12 months.

2.19      True void

          A vacant property included in the empty property pool to be offered to a local authority for
          nomination rights. True voids are otherwise known as „net‟ voids, after netting out
          properties reserved to the landlord for internal management lets such as internal transfers,
          emergency transfers and decants during major works.

2.20      Void standard

          The published minimum standard of repairs and cleanliness new tenants can expect when
          they move in.

2.21      Not Used

2.22      Not Used

3         Lettings specification

3.1       Purpose

          This specification is designed to ensure that the landlord co-operates with local authorities
          to address local housing needs, within the context of building sustainable communities,
          and meets agreed standards of service for individual applicants.

3.2       Scope of the activity

          The landlord must demonstrate:

          3.2.1       co-operation with local authorities and the relevant Regional Assembly to
                      address local housing needs;

          3.2.2       lettings based primarily on housing need consistent with the intention of the
                      housing product and intended as the occupier‟s principal home;

          3.2.3       a published lettings policy that must be demonstrably efficient, transparent, fair
                      and effectively controlled;

          3.2.4       operation in accordance with industry good practice to assist the local authority
                      to discharge its housing functions, ensure sustainable tenancies, and in the
                      treatment of tenants.

          Each application for housing must be judged on its merits, and applicants should be
          offered a choice of home where reasonable. The landlord must ensure tenants have
          access to transfers, mobility schemes and exchanges.

          Outputs and outcomes

3.3       Sustainable communities




HSNG.1727874.1                                     67                                      SBS.51183.137
          3.3.1     The landlord must work in partnership with the local authority and where
                    applicable the Homebuy Agent towards achieving sustainable communities.

          3.3.2     Partnership working may include but is not limited to: consulting on local lettings
                    policies aimed at achieving balanced communities, complying with the
                    recommendations the relevant Regional Assembly, the development of
                    community or estate profiles, needs analysis, impact assessments, information
                    sharing protocols, and joint working protocols.

          3.3.3     The landlord must demonstrate:

                    (a)     proactive efforts to be involved with the development of the local
                            authority‟s housing strategy and homelessness reviews;

                    (b)     consultation and liaison with the local authority on the development of
                            the landlord‟s local lettings policies (if any) aimed at achieving balanced
                            scheme lettings;

                    (c)     a justifiable use of starter tenancies (where necessary) which are not
                            targeted at individual households and which are used across an area to
                            tackle antisocial behaviour;

                    (d)     cross-district protocols with the local authority on rehousing applications
                            and homelessness nominations, where reasonable;

                    (e)     where requested by the local authority, participation in CBL schemes
                            including sub-regionally, a Common Housing Register (CHR) and/or
                            common allocation policies;

                    (f)     assistance for tenants with housing benefit applications including help in
                            resolving any delays or problems in dealing with applications, and
                            obtaining from the tenant (where reasonable) authorisation at the letting
                            stage to seek information relating to the tenant‟s housing benefit claim.

3.4       Nominations

          The landlord must assist with individual nominations (both for homes for rent and sale) and
          ensure sustainable tenancies by:

          3.4.1     entry into a written nomination agreement whereby at least 50% of nominations
                    on true voids (for all schemes) are available to the local authority/local
                    authorities and complies with the requirements of the Agency in relation to
                    liaison with Homebuy Agents. The nominations agreement should be entered
                    into with the relevant local authority or group of local authorities as operate
                    together through choice based lettings or sub-regional nomination
                    arrangements (as applicable);

          3.4.2     liaising with the local authority prior to any final refusal of a nomination (which
                    may only be in circumstances permitted by the nominations agreement) to try to
                    address the reasons for refusal;




HSNG.1727874.1                                   68                                       SBS.51183.137
          3.4.3     seeking the cooperation and assistance of other agencies to ensure the
                    required support levels for vulnerable residents are in place, where appropriate.

3.5       Lettings policy and procedure

          The landlord must publish and comply with a lettings policy and procedure, which must be
          demonstrably efficient, transparent, fair and effectively controlled, covering the following:

          3.5.1     the criteria for prioritising and accepting nominations for housing from the local
                    authority, other agencies or directly which shall comply with the
                    recommendations of the relevant Regional Assembly;

          3.5.2     terms expected to be included in the proposed nomination agreement with the
                    local authority, including as a minimum:

                    (a)     stock profile;

                    (b)     definition of a true void;

                    (c)     the nomination figures and how these are calculated;

                    (d)     the information required about vacancies and nominations;

                    (e)     where reasonable, the liaison arrangements to establish appropriate
                            support for vulnerable applicants prior to the start of a tenancy;

                    (f)     the agreed timescales for each stage of the nominations process
                            including the notification of void properties which shall take into account
                            where relevant the provisions of the Homebuy Agency Agreement;

                    (g)     where true voids are not included within the nominations pool (see
                            performance measures below), the procedure by which the landlord will
                            offer these in a manner that addresses local housing need;

                    (h)     the monitoring requirements on both parties;

                    (i)     Dispute Resolution Process;

          3.5.3     The process for review of the nominations agreement, variations and
                    termination.

          3.5.4     A fair and effective appeals process for rejected applicants.

          3.5.5     Access to transfer, mobility and exchange schemes for tenants.

          3.5.6     Criteria for priority transfers, eg, for harassment or domestic violence.

          3.5.7     An annual lettings plan covering numbers of transfers and exchanges carried
                    out and numbers registered for a move, against target for transfers.

          3.5.8     Procedures for judging each application for housing on its merits.

          3.5.9     Published criteria for use of starter tenancies (if any).



HSNG.1727874.1                                     69                                      SBS.51183.137
3.6       Not Used

3.7       Property viewing and tenancy sign-up

          The landlord must follow industry good practice in relation to the viewing of properties,
          signing of tenancy agreements and ensuring sustainable tenancies by:

          3.7.1      ensuring applicants have a clear understanding of their rights and
                     responsibilities under the tenancy agreement, as detailed in the residents‟ rights
                     and obligations specification;

          3.7.2      verifying the identity and circumstances of the applicant;

          3.7.3      recording tenants‟ support or other specific needs in accessing services or in
                     sustaining the tenancy, and using this information to assist them;

          3.7.4      providing each tenant with an information pack that covers but is not limited to:

                     (a)    the void standard as in the repairs and maintenance specification;

                     (b)    minimum service        standards   as   in   the      tenancy   management
                            specification;

                     (c)    the property facilities;

                     (d)    local community information;

          3.7.5      monitoring levels of refusals and reasons, addressing any issues arising;

          3.7.6      making a follow-up visit which can also be used as part of assessing tenant
                     satisfaction.

          On all lettings, whether from local authority nominations, transfers or exchanges or
          otherwise, CORE logs must be completed and returned.

3.8       Not Used

3.9       Performance measures required

          3.9.1      Minimum of 50% nominations in all schemes on true voids, then percentage of
                     nominations made and accepted.

          3.9.2      Number of nominations accepted and rejected, and reasons for rejection.

          3.9.3      100% completion of CORE logs.

          3.9.4      Number of appeals from rejected applicants, and outcomes.

          3.9.5      Performance against annual lettings plan.

          3.9.6      Published resident satisfaction rates with new lettings, to include condition,
                     customer care and advice on HB, and resident involvement.

          3.9.7      Void turnaround time.


HSNG.1727874.1                                     70                                       SBS.51183.137
4         Repairs and maintenance specification

4.1       Purpose

          This specification is designed to ensure landlords adopt sound business planning
          principles, ensure their homes and estates are well maintained and reach minimum
          agreed standards, that contracts comply with the law, and that tenants and residents are
          involved and consulted.

4.2       Scope of the activity

          The landlord must demonstrate:

          4.2.1     an effective overall strategy for the long term maintenance of the homes to the
                    specified standard and the discharge of the landlord‟s repairing responsibilities;

          4.2.2     a clear and costed medium-term repair plan and the capacity to maintain such a
                    plan over time;

          4.2.3     best practice and legal compliance in procurement;

          4.2.4     compliance with the needs and requirements of residents in planned works, and
                    good quality published information to stakeholders;

          4.2.5     best practice and legal compliance in cyclical maintenance;

          4.2.6     best practice and legal compliance in responsive repairs, and good quality
                    information to householders;

          4.2.7     best practice and legal compliance in consultation with residents in all cyclical
                    maintenance and responsive repairs;

          4.2.8     a good quality, published relet standard;

          4.2.9     best practice in common area maintenance;

          4.2.10    best practice in consultation and information to stakeholders;

          4.2.11    maintained and published performance information.

          Outputs and outcomes

4.3       Strategic maintenance plan

          The landlord must:

          4.3.1     put in place a professionally validated long-term elemental replacement plan for
                    all properties based on appropriate replacement costs;

          4.3.2     based on a 25-year rolling period as a minimum;

          4.3.3     covering, as a minimum, building elements that are the landlord‟s responsibility
                    and that require replacement or repair through age deterioration;




HSNG.1727874.1                                   71                                      SBS.51183.137
          4.3.4     based on the starting position of professionally validated stock condition and
                    anticipated lifespans of building and external elements, not exceeding Decent
                    Homes maximum lifespans, where defined for specific elements;

          4.3.5     subject to the limitations of Decent Homes maximum lifespans, target lifespans
                    may be modified in accordance with professionally validated arrangements for
                    just-in-time elemental replacement as an alternative to fixed elemental
                    lifespans;

          4.3.6     designed to maintain the housing (within the responsibilities of the landlord) to
                    an established standard at least equal to Decent Homes, providing for its
                    structural integrity and a standard of common area and estate maintenance in
                    line with industry good practice;

          4.3.7     update the long-term plan annually to reflect the following;

          4.3.8     planned and cyclical works undertaken;

          4.3.9     work of an elemental replacement nature undertaken as a one-off, through
                    responsive, void or batched maintenance;

          4.3.10    regular sample surveying of archetypes;

          4.3.11    a three-yearly independent professional review and validation of the plan;

          4.3.12    have arrangements for annual review of the matters above.

4.4       Medium-term repair planning

          The landlord must:

          4.4.1     develop and maintain a rolling five-year maintenance plan covering:

                    (a)    planned elemental replacement or upgrading programmes, which
                           should be fixed for the first three years of the plan at least, and
                           estimated or provisional for no longer than years four and five;

                    (b)    Responsive Repairs;

                    (c)    void servicing and repairs based on the void standard;

                    (d)    grounds and other estate maintenance;

                    (e)    cyclical servicing repair and safety checking;

          4.4.2     demonstrate that appropriate input to the medium-term plan elements has been
                    made by tenants, leaseholders and shared owners, and specifically in respect
                    of:

                    (a)    leaseholder and shared owner input to planned maintenance and all
                           relevant service charge areas of expenditure;




HSNG.1727874.1                                   72                                       SBS.51183.137
                    (b)    tenant input to the above plus responsive repairs policy and procedures
                           and void standards;

          4.4.3     ensure that the medium-term plan is communicated to all relevant stakeholders,
                    together with regular feedback information (where reasonable and not less than
                    twice yearly) on progress and performance;

          4.4.4     ensure that the medium-term plan is developed and maintained in accordance
                    with industry good practice.

4.5       Strategic and planning documents

          The above plans must be supported by, and referenced to, the following documents:

          4.5.1     a comprehensive asset management plan and wider asset management
                    strategy for the relevant properties;

          4.5.2     a repair and maintenance plan.

4.6       Procurement

          The landlord must:

          4.6.1     procure all works and services by a transparent and fully documented process
                    that:

                    (a)    is compliant with best practice, including the Byatt, Egan and Latham
                           report recommendations, and takes account of the guidance and best
                           practice of the relevant authorities;

                    (b)    meets the EU procurement directives, where applicable;

                    (c)    involves all key stakeholders (tenants, leaseholders, Newbuild
                           Homebuy and any other service-using or cost-bearing households as
                           applicable to the specific contract/s) in the following areas of
                           procurement: scheme or programme development, including scope,
                           standards, design issues, timing, the procurement methods and
                           processes, the pre-selection of bidders, the evaluation of tenders and
                           the selection of the provider/s;

          4.6.2     in the case of partnering contracts, include the stakeholders as a named class
                    of beneficiaries under the Contracts (Rights of Third Parties) Act 1999 or as
                    interested parties and set out their rights to information and consultation on
                    changes

          4.6.3     understand and meet all statutory requirements on the consultation of residents
                    and the selection of contractors.

4.7       Planned works of repair, maintenance and improvement

          The landlord must:




HSNG.1727874.1                                  73                                     SBS.51183.137
          4.7.1     put arrangements in place to ensure the provision of works to maintain the
                    housing in accordance with the strategic maintenance plan. The arrangements
                    must take account of the needs and requirements of individual households
                    including:

                    (a)    design choices;

                    (b)    notification and certainty of starting and completion dates;

                    (c)    arrangements for any special respite care or for temporary rehousing;

                    (d)    the opportunity to provide feedback on process and procedure,
                           completed works and post-completion satisfaction;

          4.7.2     in respect of these works the landlord must maintain and publish to all
                    stakeholders the following minimum information:

                    (a)    the scope and extent of the work – planned and out-turn;

                    (b)    the selected contractors, sub-contractors and key suppliers;

                    (c)    the timing of the works and compliance with the established works
                           programme;

                    (d)    levels of completed work and post-work satisfaction;

          4.7.3     the landlord must arrange to consult relevant stakeholder groups about the
                    outcomes of such work programmes and take account of feedback in the
                    design and arrangements of future works.

4.8       Cyclical maintenance

          The landlord must:

          4.8.1     put arrangements in place to ensure the provision of cyclical repair,
                    maintenance and checking of necessary building elements and provisions,
                    including but not limited to:

                    (a)    annual* gas appliance safety checking and servicing;

                    (b)    ten-yearly* electrical safety inspections;

                    (c)    regular checking, repair and servicing of plant items such as (but not
                           limited to) lifts, door entry systems, CCTV systems, fire and smoke
                           alarms, CO detectors, lightning conductors, the safety of water storage
                           and systems;

                    (d)    external and common area cyclical painting and decoration;

          4.8.2     have in place effective systems for auditing sub-contractor information
                    provisions and charges




HSNG.1727874.1                                  74                                        SBS.51183.137
          4.8.3     establish equivalent consultation and information arrangements as detailed
                    above in planned works of repair, maintenance and improvement.

          *Or such other more frequent checks, inspections or services as may be required by law
          or good practice from time to time.

4.9       Responsive repairs

          The landlord must:

          4.9.1     establish and comply with a policy for the day-to-day and emergency repair of
                    housing in relation to wear and tear and unexpected breakdowns and failures.
                    The scope of this provision must include (but is not limited to):

                    (a)    a full, all-times and hours emergencies service to make secure and safe
                           (to be detailed in method statements);

                    (b)    a full normal working hours service, with some evening and weekend
                           provision (to be detailed in method statements);

                    (c)    as if the right to repair legislation extended to Assured Tenants;

                    (d)    clear, published information on the responsibilities of both the landlord
                           and the tenant, leaseholder or service charge payer. This information
                           must be sent to all residents and its distribution repeated after any
                           significant change or at least every two years. It must also be available
                           at housing offices. The following must also be included in the
                           information:

                    i      how to access the service;

                    ii     the arrangements for making appointments and the prioritisation of
                           repair work;

                    iii    the arrangements for making comments or complaints;

                    iv     the arrangements for monitoring satisfaction;

                    v      the provision for on-going consultation on the policy and performance
                           with householders;

                    vi     the householder‟s rights to alter their home and the necessary
                           permissions required for any such changes;

                    (e)    the scope of service must extend beyond landlord provisions to the
                           maintenance of mobility and other aids and adaptations in tenanted
                           homes where such provision has not been otherwise arranged;

                    (f)    in all respects this service must be in accordance with the provisions of
                           best practice guidance of the relevant authorities and industry good
                           practice;




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          4.9.2     maintain and publish to relevant stakeholders out-turn and performance
                    statistics including:

                    (a)    any information and performance reporting requirements of the relevant
                           authorities;

                    (b)    information on volumes and trends;

                    (c)    key performance information including: percentages of emergency and
                           urgent repairs, overall average time to complete repairs and, separately,
                           all non-urgent repairs, compliance with priority completion times,
                           percentages of work undertaken by appointment and compliance with
                           meeting appointments, collected information on complaints and
                           satisfaction;

          4.9.3     have in place effective systems for auditing sub-contractor information
                    provisions;

          4.9.4     have effective processes in place to make re-charges to residents for work
                    undertaken which is the resident‟s responsibility;

          4.9.5     establish equivalent consultation and information arrangements as detailed
                    above in planned works of repair, maintenance and improvement.

4.10      Voids

          The landlord must:

          4.10.1    establish a void standard at least as good as that stipulated in the advice and
                    requirements of the relevant authorities. Such a standard must cover both the
                    home itself and the outside area, fences, walls, gardens and the like. The
                    standard must include the provision and issue of appropriate certification for
                    safety and other service or equipment checking. It must also cover the
                    clearance, storage and/or disposal of previous occupiers‟ belongings or rubbish,
                    the removal of previous occupiers‟ fittings or building modifications, and
                    checking to ensure that there are no unsafe materials present (eg, asbestos).
                    Decorating allowances may substitute for bringing the property up to a defined
                    decorative standard;

          4.10.2    have arrangements in place for the specification and undertaking of works to
                    bring properties to the void standard, and to confirm that the standard has been
                    achieved at, or immediately subsequent to, relet;

          4.10.3    maintain and publish to relevant stakeholders out-turn and performance
                    statistics including:

                    (a)    the volumes of voids;

                    (b)    the time taken to re-service void properties;

                    (c)    the activities related to void security;

                    (d)    the statistics on new tenant satisfaction;


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          4.10.4    have in place effective systems for auditing sub-contractor information
                    provisions and charges;

          4.10.5    have effective processes in place to make re-charges to previous occupiers for
                    work undertaken which was their responsibility;

          4.10.6    establish equivalent consultation and information arrangements as detailed
                    above in planned works of repair, maintenance and improvement.

4.11      Estate and common area maintenance

          The landlord must:

          4.11.1    establish and comply with written standards of estate condition related to all
                    common areas external to the homes and common internal areas. Such areas
                    will include, though not exclusively landlord-owned or managed: corridors, lift
                    lobbies, entrance halls, stairways and the like, grass and garden areas, paths,
                    roads, boundary fences and walls, parking, play and drying areas, except for
                    those that are the responsibility of residents;

          4.11.2    establish minimum provision of service to support the standards of estate
                    condition and help prevent ASB. Standards may be demonstrated using
                    photographs (as with EnCams street cleansing standards and litter grading
                    scheme – the landlord should consider the applicability of BVPI 199);

          4.11.3    establish by way of direct labour or sub-contract the provisions of a routine and
                    responsive maintenance service to ensure that the estate maintenance
                    standards are monitored and achieved at appropriate intervals (regular estate
                    inspections involving relevant stakeholders will form part of the minimum
                    monitoring arrangements), in line with industry good practice;

          4.11.4    have in place effective systems for the effective auditing of in-house or sub-
                    contractor information provisions and charges;

          4.11.5    in respect of relevant stakeholders, equivalent consultation and information
                    arrangements as detailed above in planned works of repair, maintenance and
                    improvement.

4.12      Consultation and stakeholder information

          The landlord must:

          4.12.1    ensure that all statutory provisions in respect of tenants and leaseholders
                    relating to consultation, participation, choice or other involvement are adhered
                    to and that service provision has close regard to any recommendations,
                    requirements or best practice guidance of the relevant authorities;

          4.12.2    ensure that in respect of leaseholders, , all procedures conform to the relevant
                    requirements of their leases or agreements so as to demonstrate their
                    reasonableness and the validation of charges. Such procedures must also
                    have close regard to any recommendations or best practice guidance of the
                    relevant authorities;



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          4.12.3    make and retain adequate records of all consultation and be able to
                    demonstrate that complaints, consultation and feedback from stakeholders is
                    reviewed and used to improve service provision;

          4.12.4    have particular regard to the need to involve people with special needs and a
                    fully representative spectrum of the stakeholders including „hard-to-reach‟
                    groups.

4.13      Performance measures required

          4.13.1    Meeting the agreed Decent Homes standard (or higher standard if initially a
                    condition of grant) as in the strategic maintenance plan.

          4.13.2    Resident satisfaction as required in the tenancy management specification.

          4.13.3    Compliance with all the plans submitted and updated as required by this repairs
                    and maintenance specification.

5         Equality and diversity specification

5.1       Purpose

          5.1.1     This specification is designed to ensure that there is fair access to homes and
                    related management and maintenance services.

5.2       Scope of the activity

          The landlord must demonstrate:

          5.2.1     Corporate commitment to providing fair access to services and to compliance
                    with all statutory requirements and guidance of the relevant authorities, and with
                    industry good practice on equality and diversity.

          5.2.2     Fair access to properties.

          5.2.3     Fair access to services for residents and potential residents.

          5.2.4     Provision of management services including resident involvement and dealing
                    with harassment.

          5.2.5     Operation in accordance with industry good practice.

          Outputs and outcomes

5.3       Overall commitment to providing fair access to services

          The landlord must:

          5.3.1     establish an equal opportunities/equality and diversity policy that observes all
                    legal requirements on providers of services, including the Race Relations Act,
                    Sex Discrimination Act, Disability Discrimination Act, Civil Partnerships Act, etc;




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          5.3.2     not have any judgements against it under the Race Relations Act, Sex
                    Discrimination Act, or Disability Discrimination Act. The landlord must notify the
                    Agency of any cases pending, or of any subsequent cases arising;

          5.3.3     select sub-contractors in a fair and open manner, following current guidance
                    from the Commission for Racial Equality;

          5.3.4     require its staff and operatives to behave in a courteous manner and not harass
                    residents;

          5.3.5     set equality and diversity targets for service provision that comply with all legal
                    requirements and guidance of the relevant authorities and reflect local context,
                    demonstrated in resources such as the Census and local housing need
                    analyses;

          5.3.6     collect performance data to allow monitoring and scrutiny of performance
                    against these targets, compliance with legal requirements and the landlord‟s
                    own policies and procedures, and compliance with the relevant authorities‟
                    requirements.

5.4       Fair access to properties for rent and fair access to services

          The landlord must:

          5.4.1     where properties are advertised, use a wide range of formats and media;

          5.4.2     not restrict advertising of properties to particular localities;

          5.4.3     ensure selection criteria are non-discriminatory;

          5.4.4     ensure vulnerable individuals and groups are not excluded from hearing
                    about/meeting selection criteria for properties;

          5.4.5     ensure, in so far as is reasonable, the different needs of individuals and groups
                    are reflected in properties made available, both initially and on reletting,
                    including the needs of disabled people, and cultural and religious requirements;

          5.4.6     ensure terms of leases and agreements do not discriminate unfairly, for
                    example, against same-sex couples;

          5.4.7     ensure that all residents have equal access to management and maintenance
                    services – including those residents for whom English is not a first language,
                    those with hearing or sight impairments, and those with low literacy, and ensure
                    appropriate priority is given to providing services for vulnerable people including
                    the frail elderly and children;

          5.4.8     work with other agencies to secure support, including aids and adaptations, as
                    necessary for residents;

          5.4.9     discover and record, in so far as is reasonable, the needs of all residents –
                    including communication requirements – and keep up to date with any changes
                    in these requirements.




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5.5       Provision of management services including resident involvement and dealing with
          harassment

          The landlord must:

          5.5.1     ensure, in so far as is reasonable that all residents can have enjoyment of their
                    homes free from harassment – including harassment on grounds of race,
                    gender, sexual orientation, disability, etc;

          5.5.2     ensure all residents have a fair and equal chance to take part in any
                    consultation/involvement activity.

5.6       Fair access to properties and services

          5.6.1     Arrangements where properties are advertised.

          5.6.2     Methods for selecting tenants.

          5.6.3     Arrangements to ensure no individuals/groups are excluded from finding out
                    about and applying for homes.

          5.6.4     Arrangements to ensure vulnerable and potentially vulnerable individuals and
                    groups are supported in the application processes, including via CBL schemes.

          5.6.5     Arrangements to ensure the diverse needs of groups and individuals are
                    reflected in the development process.

          5.6.6     Target setting and data collection/monitoring covering access to properties to
                    ensure that there is no exclusion from properties based on ethnicity, gender,
                    disability, age, sexuality, or religion, taking account of local population and
                    housing need data.

          5.6.7     Measures to meet the needs of people for whom English is a second language,
                    those with sight/hearing impairment, and those with low literacy levels, in the
                    provision of housing management and maintenance services.

          5.6.8     Arrangements to collect, maintain and update data on the needs of residents.

          5.6.9     Methodology to measure satisfaction with maintenance and management
                    services by ethnicity, gender, disability, age and religion.

          5.6.10    Arrangements to identify and meet the support needs of residents.

          5.6.11    Target setting for aids and adaptations.

5.7       Provision of management services

          5.7.1     Measures aimed at preventing harassment including harassment on grounds of
                    race, gender, sexual orientation or disability, and how these will be monitored
                    including targets for prevention of harassment.




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          5.7.2      Measures the landlord will put in place to deal with harassment including
                     harassment on grounds of race, gender, sexual orientation or disability and how
                     these will be monitored including targets for dealing with harassment.

          5.7.3      Options for supporting victims, including a procedure to enable safe housing
                     and re-housing, and dealing with perpetrators.

          5.7.4      Arrangements to seek feedback from people who have had contact with the
                     landlord over harassment, and to act upon feedback to improve the
                     policy/procedures.

          5.7.5      Methods to ensure current and future good practice is incorporated into the way
                     the landlord deals with harassment.

5.8       Performance measures required

          5.8.1      Extent of compliance with the organisation‟s own procedures (measured
                     through monitoring reports).

          5.8.2      Performance against service provision targets – including as a minimum those
                     identified below.

          5.8.3      Performance against targets for fair access to properties as described above
                     and against local population/housing need data if appropriate.

          5.8.4      Resident satisfaction, compared by ethnicity, gender, disability and age with key
                     aspects of the maintenance and management service provided (including
                     access to services, speed/quality of repairs, dealing with ASB and meeting
                     support needs).

          5.8.5      Performance against targets for provision of aids and adaptations.

          5.8.6      Details of partnerships to provide support arrangements for residents.

          5.8.7      Details of partnerships/working relationships created to tackle harassment.

          5.8.8      Performance against targets for prevention of and dealing with harassment.

          5.8.9      Performance against targets for ensuring fair and equal access to
                     consultation/involvement activity.

6         Dealing with anti-social behaviour specification

6.1       Purpose

          This specification is designed to ensure that the landlord is proactive in providing a service
          that addresses both individual incidents and the overall occurrence of anti-social behaviour
          (ASB).

6.2       Scope of the activity

          The landlord must:




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          6.2.1     publish its policies and procedures (together with a summary) for dealing with
                    anti-social behaviour, a means to address complaints on a responsive basis in
                    accordance with industry good practice, and means for recording and analysing
                    service data;

          6.2.2     actively seek to prevent ASB through effective management of communal
                    areas, effective communication of its approach to ASB to residents, seeking
                    resident consultation, and other appropriate means developed in a strategic
                    context in conjunction with residents and in accordance with industry good
                    practice;

          6.2.3     include a means through which the landlord is able to demonstrate that the
                    quality of its response meets the published standards.

          (For clarity, the scope of ASB throughout should be taken to include all forms of
          harassment including racial harassment).

          Outputs and outcomes

6.3       Dealing with complaints of ASB

          The landlord must ensure:

          6.3.1     all action taken to address incidents of reported ASB is consistent with the
                    landlord‟s published policy and procedures;

          6.3.2     the content of its published policy and procedures reflects good industry
                    practice including:

                    (a)    the use of all available and appropriate legal sanctions including
                           injunctions, retaining eviction only as a last resort where it can be clearly
                           demonstrated that other measures have failed to address the issue or
                           would be ineffective;

                    (b)    the use of appropriate means in addition to legal process to deal with
                           incidents including dispute resolution;

                    (c)    the use of partnership working where appropriate;

                    (d)    the need for a victim-centred approach;

                    (e)    the need to address any vulnerability issues related to the parties
                           involved;

                    (f)    the need to ensure the means used to address the incident, and
                           sanctions used, are commensurate with the seriousness of the issue
                           and the impact of the ASB on others.

          6.3.3     The policy and procedures are communicated clearly, in an easily
                    comprehensible manner, and explained to residents and others including those
                    with alternative media and language needs.




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          6.3.4     People who have complained about incidents of ASB are satisfied that their
                    complaint was responded to promptly and that they were kept informed
                    throughout.

          6.3.5     People who have complained about incidents of ASB are satisfied that they
                    have had the opportunity to put to the manager their views on how the issue
                    should be tackled.

          6.3.6     People who have complained about incidents of ASB are satisfied that their
                    complaint has been dealt with in accordance with the published policy and
                    procedures.

          6.3.7     An accurate and comprehensible record of the complaint, actions taken and
                    related issues is maintained, compliant with current good practice.

6.4       Prevention of ASB

          The landlord must ensure:

          6.4.1     reports of incidents of ASB are responded to sufficiently quickly to minimise the
                    risk of escalation and to make clear to all parties that the landlord is treating the
                    matter with high priority;

          6.4.2     communications, correspondence and other documentation consistently
                    promote a visible culture of non-tolerance of ASB and a determination to deal
                    with ASB effectively;

          6.4.3     an explicit policy and procedure is in place which ensures that on letting and
                    throughout the course of each tenancy, households whose members are at risk
                    of perpetrating ASB receive appropriate support or guidance to manage that
                    risk effectively;

          6.4.4     common areas are maintained, and problems dealt with, detailed in the repairs
                    and maintenance specification;

          6.4.5     residents generally are kept up to date on the landlord‟s approach to ASB and
                    of outcomes of complaints in broad terms;

          6.4.6     the occurrence of ASB is limited through the application of a long-term and
                    effective strategy agreed by the landlord with residents.

6.5       Service data and monitoring

          The landlord must:

          6.5.1     be able to show an analysis of the extent and nature of complaints of ASB and
                    formal action taken including evictions, demoted tenancies and ASBOs, and the
                    outcomes of complaints including the extent of complainant satisfaction with the
                    service;

          6.5.2     be able to demonstrate on a periodic basis that the service provided meets the
                    standards in its published policy and procedures.




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6.6       Performance measures required

          6.6.1      Resident satisfaction, compared by ethnicity, gender, disability and age, with
                     how their complaint of nuisance was dealt with.

          6.6.2      Resident views on whether the problem has been resolved.

          6.6.3      Extent of compliance with the organisation‟s own procedures (measured
                     through case audit).

          6.6.4      Number of tenancies demoted to assured shorthold tenancies following a court
                     order each year for 1 April to 31 March.

          6.6.5      Number of ASBOs made in the course of each year from 1 April to 31 March.

          6.6.6      Number of evictions for ASB each year from 1 April to 31 March:

                     (a)     for general needs housing;

                     (b)     for supported housing and/or housing for older people.

7         Tenancy management specification

7.1       Purpose

          This section is designed to ensure that tenancies are sustainable and offer similar rights
          and protection to tenancies in other social housing sectors.

7.2       Scope of the activity

          The landlord must ensure that services are of a good standard in accordance with industry
          good practice. Services must be designed through a customer-based approach to meet
          the needs and requirements of residents. The management of the properties and
          involvement in local community issues through partnership working must ensure that
          properties are well built, well run, and offer a safe and inclusive place to live. The landlord
          must comply with the terms of the Charter for Applicants and Residents or any successor
          publication or guidance stipulated by the Agency as a condition of grant.

          Outputs and outcomes

7.3       Tenancy agreement

          The landlord must use a tenancy agreement approved in advance by the Agency in
          accordance with the Grant Agreement which is appropriate to the purpose of the dwelling
          with rights and obligations as detailed in the residents‟ rights and obligations specification
          and which contains no unfair terms.

7.4       Not Used

7.5       Minimum service standards




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          The landlord must publish minimum service standards on how it will deal courteously with
          customers and setting out response times in line with industry good practice. The
          standards must cover but are not limited to:

          7.5.1     telephone calls;

          7.5.2     appointments for visits;

          7.5.3     written enquiries including emails;

          7.5.4     visits to the office or local surgery, access facilities and opening times;

          7.5.5     access to information and data protection;

          7.5.6     complaints (including access to a review of a decision and access to the
                    Housing Ombudsman Service and in the case of leaseholders to the Leasehold
                    Valuation Tribunal) and compensation;

          7.5.7     policies and procedures covering response repairs, emergencies and out-of-
                    hours services as detailed in the repairs and maintenance specification;

          7.5.8     translation and interpreting facilities or other specific requirements for accessing
                    services;

          7.5.9     facilities available via the internet.

          The landlord must set targets for service delivery in consultation with residents and
          monitor them, both internally and using external benchmarks.

7.6       Meeting residents’ needs and requirements

          The service must be flexible and responsive to the needs of all residents, and follow
          industry good practice. The landlord must meet the minimum requirements on access to
          property and services in the equalities and diversity specification.

          The landlord must deal with breaches of tenancy conditions or lease terms. In all
          circumstances the landlord will consider eviction as the last resort and will put in place
          procedures for early intervention measures, which must include personal contact, access
          to support agencies and specialist advice agencies, housing advice, mediation, and where
          eviction is considered, liaison with the local authority homelessness section.

7.7       Rent or service charge arrears

          The landlord must:

          7.7.1     have a written policy and procedure which includes timescales for review. The
                    procedure must ensure access to debt counselling and income maximisation
                    advice, and ensure early notification to the householder of debt and a range of
                    payment options, including repayment agreements based on an income and
                    expenditure assessment;

          7.7.2     liaise with the local authority‟s housing benefit section and must not take
                    possession proceedings where the tenant has a reasonable expectation of



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                    receiving Housing Benefit, has submitted all relevant information to assess the
                    claim and is meeting any required contribution.

7.8       Anti-social behaviour (see separate specification)

7.9       Involving residents and working with residents’ associations

          The landlord must allow and encourage residents to influence the design and delivery of
          services to their homes, and must have a written strategy on working with residents that
          covers both involvement and consultation on an individual or collective basis. The strategy
          must cover all tenures. The landlord must also have specific strategies aimed at involving
          under-represented groups such as young people, and hard-to-reach groups.

          Residents must be involved at an early stage in the formulation of policies that affect them,
          in setting priorities and targets for service delivery, and in the monitoring of performance.

          The strategy must also cover the recognition of tenants‟ or residents‟ associations, and
          what is expected of them, such as the promotion of equality of opportunity for all residents.
          It must cover the development of local action plans or compacts, requests for information
          and how the local community will be consulted on issues that may affect a wider audience.

7.10      Other tenancy and lease management issues

          The landlord must have procedures in place to ensure that properties are well managed,
          offering speedy intervention where necessary, but must also offer the right to quiet
          enjoyment. The landlord must have in place:

          7.10.1    a system of tenancy or occupancy checks or audits to make sure the correct
                    tenant or leaseholder is in residence;

          7.10.2    staff who are well trained, can offer a high level of customer service, advice on
                    tenancy or lease issues and housing matters, and signpost to other services
                    where necessary;

          7.10.3    a system of review of the tenancy agreement, conditions of tenancy, the
                    tenancy handbook and its own policy and procedures;

          7.10.4    regular cost reviews, which follow good practice in procurement to achieve cost
                    effectiveness and relate costs to the quality of service in consultation with
                    residents;

          7.10.5    a range of information including newsletters;

7.11      Performance measures required

          7.11.1    Satisfaction with services, the home and local environment, and access,
                    compared by ethnicity, gender, disability and age.

          7.11.2    Numbers of starter tenancies and progression to Assured Tenancies.

          7.11.3    Out-turn figures against targets set for minimum service standards.

          7.11.4    Evictions by category.



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          7.11.5    Abandoned or failed tenancies.

          7.11.6    Rent arrears as a percentage of rent collectable.

          7.11.7    Service charge arrears as a percentage of service charges collectable.

          7.11.8    Bad debts written off.

          7.11.9    Number of disputes upheld by the Leasehold Valuation Tribunal.

8         Residents’ rights and obligations in the tenancy/lease specification

8.1       Purpose

          This specification is designed to ensure that residents‟ rights are adhered to, that their
          obligations are appropriate, and that all information is offered to tenants in a
          straightforward way.

          For the purposes of this section, references to tenants, tenancies and tenancy agreements
          shall include licence holders, licences and licence agreements.

8.2       Scope of the activity

          8.2.1     For general needs schemes, the landlord must use a tenancy agreement which
                    include a set of statutory rights for tenants, who will be Assured Tenants, and
                    rights which are non-statutory but regarded as industry good practice.

          8.2.2     For supported housing schemes, the forms of tenure could include assured,
                    assured shorthold, excluded licence and non-excluded licence.

          8.2.3     The type of scheme and accommodation will determine the form of tenure.

          8.2.4     The rights and other key information are to be in a clear and easily
                    comprehensible form, and explained to prospective tenants as detailed in the
                    lettings specification.

          8.2.5     The landlord must ensure obligations are equally appropriate                   and
                    comprehensible, including the obligation to pay rent and/or charges.

          Outputs and outcomes

8.3       Periodic tenancies

          The landlord must ensure:

          8.3.1     all lettings are made on the basis of a written tenancy setting out the terms of
                    the letting in the form of tenants‟ rights and obligations;

          8.3.2     the landlord must ensure that the most secure form of tenure is used that is
                    appropriate to the scheme;

          8.3.3     tenancies are set up on a joint basis where to do so would be good practice;




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          8.3.4   for Assured Tenants and Assured shorthold tenants, statutory rights retained by
                  Assured Tenants under the Housing Act 1988 and subsequent relevant
                  legislation are included in the tenancy agreement;

          8.3.5   contractual rights are included in the tenancy agreement which are generally
                  required for social lettings and/or reflect industry good practice and these must
                  include but not exclusively (and where appropriate, subject to landlord‟s
                  consent where requirement for such consent is normal);

          8.3.6   the following contractual rights should be granted to all tenants (excluding
                  licence holders):

                  (a)    the right to be consulted about proposed changes to housing
                         management arrangements;

                  (b)    the right to complain to the Housing Ombudsman Service;

                  (c)    the rights of access to the home and to communal areas (as
                         appropriate);

          8.3.7   The following contractual rights should be granted to Assured Tenants only :

                  (a)    the right to enter into a mutual exchange arrangement with another
                         tenant;

                  (b)    the right to take in lodgers and to sub-let part of the home;

                  (c)    the right of succession for household members no less in scope than
                         the rights available to household members in a Secure Tenancy;

                  (d)    the right to carry out improvements to the home;

                  (e)    the right to be compensated for certain improvements;

                  (f)    the right to Home Loss and disturbance payments;

          8.3.8   Contractual rights concerning repairs are included in the tenancy agreement
                  which cover:

                  (a)    (for Assured Tenants and Assured shorthold Tenants only) rights
                         equivalent to those provided to Secure Tenants under the Right-to-
                         Repair scheme;

                  (b)    the repairs and repair standards provided by the landlord as a matter of
                         policy including the right to a responsive repairs service.

          8.3.9   The tenancy agreement sets out clearly with regard to rents and/or charges:

                  (a)    the rent and/or charges payable at the start of the tenancy, and a
                         schedule of services covered by rent and of services covered by
                         separate charges including support charges where appropriate;

                  (b)    when rent is payable;



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                     (c)    the procedure through which rents and charges will be reviewed;

                     (d)    the date of the first rent and charges increase;

                     (e)    a limit to the frequency of increase of rent and charges after the first
                            increase to not more than once every 12 months;

                     (f)    a limit to the amount of any increase in rent or service charge in
                            accordance with the Agency‟s and/or Regulator's policy from time to
                            time.

          8.3.10     Tenants‟ obligations in the agreement are reasonable and appropriate to local
                     circumstances, and in particular but not exclusively:

                     (a)    make clear obligations regarding nuisance, harassment and anti-social
                            behaviour, including responsibility for household members and visitors;

                     (b)    make clear obligations to provide access for the landlord for repairs and
                            other reasons;

                     (c)    make clear the obligations to pay rent and charges and to enter into a
                            dialogue with the landlord as soon as possible should difficulties arise in
                            meeting these obligations;

                     (d)    make clear the obligations regarding ending the tenancy, including
                            period of notice and reinstatement liabilities;

          8.3.11     The tenancy agreement and associated explanatory documentation are in a
                     clear and well-designed format using plain language which avoids where
                     possible the use of legal or other jargon.

          8.3.12     Suitable arrangements are made for tenants with needs for alternative media or
                     translation so that they fully understand the rights and obligations relating to
                     their tenancy.

          8.3.13     The landlord‟s letting process ensures that new tenants are able to gain an
                     adequate understanding of the terms of their tenancy agreement before they
                     sign the document.

          8.3.14     The tenancy agreement contains the address for service of notices on the
                     landlord.

          8.3.15     The landlord shall not require that any reservation fee is payable by a
                     prospective tenant in order to secure the grant of a tenancy.

8.4       Not Used

8.5       Performance measures required

          8.5.1      Tenancy agreement with Crystal Mark certification awarded by the Plain English
                     Campaign.




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          8.5.2     Explanatory documentation associated with the tenancy agreement with Crystal
                    Mark certification awarded by the Plain English Campaign.

9         Governance and finance

          The landlord must conduct its business affairs according to the principles in the Combined
          Code on Corporate Governance published by the Financial Reporting Council, July 2003.

          The landlord must demonstrate its ongoing solvency and financial viability to the Agency.

          The landlord must advise the Agency immediately of any breaches or likely breaches of
          the Combined Code.

          The landlord must advise the Agency immediately of any risks or likely risks to ongoing
          solvency and/or financial viability.

9.1       Performance measures required

          9.1.1     Annual statement of compliance with the Combined Code of Corporate
                    Governance, in a format approved by the Agency.

          9.1.2     Annual audited report on solvency and financial viability, in a format approved
                    by the Agency.

          9.1.3     More frequent statements and reports must be submitted to the Agency on
                    request.




HSNG.1727874.1                                   90                                     SBS.51183.137
                 Annex 2

                  Plan




HSNG.1727874.1     91      SBS.51183.137
THE COMMON SEAL of [                        ]    )

was hereunto affixed in the presence of              )


                                                     Director


                                                     Director/Secretary




THE COMMON SEAL of                                   )
HOMES AND COMMUNITIES AGENCY                         )
was hereunder affixed in the presence of:            )




                                                         Authorised Signatory




HSNG.1727874.1                              92                                  SBS.51183.137
                                    Appendix 2 (Deed of Covenant)

                                       Registration Undertaking

                             To be provided on solicitors headed notepaper

Dear Sirs

Deed of Covenant dated [ ] between Homes and Communities Agency (Agency) and [ ] (the
Council) relating to [insert property details]

We refer to the above Deed of Covenant. The Council intends to make a disposal of the Property
which is not an Excepted Disposal such disposal being [insert details of disposal e.g. lease, transfer,
whether of part or whole] (the Disposal) (as defined in the Deed of Covenant) and the Council is,
therefore, required to procure the completion of the Rentcharge on effecting that disposal. We are
providing this undertaking pursuant to Paragraph 2.2 of Schedule 1 to the Deed of Covenant.

We undertake that:

10          We hold clear HM Land Registry priority searches in favour of the Agency for the
            registration of the Rentcharge such searches to have an unexpired priority period of not
            less than 20 business days on the date of completion of the Rentcharge (Completion) to
            enable the registration of the Rentcharge to be fully effective and binding on [insert details
            of disponor] (the Disponee) in priority to any other interest.

11          We shall, at the at the expense of the Disponee:

11.1        within 10 business days of completion of the Disposal and the Rentcharge (Completion),
            submit a form SDLT1 or online Stamp Duty Land Tax (SDLT) Return (along with any
            necessary supplemental forms) in relation to the Disposal to HM Revenue & Customs
            together with any SDLT payable and we hereby confirm that we are currently the
            Disponee's agent for the purposes of these Returns and will be so named in each Return;

11.2        following Completion and prior to the expiry of the priority period allowed by the priority
            searches referred to above we shall lodge at the Land Registry (with full and proper
            payment in respect of fees and all necessary documents) an application for the registration
            of the Disposal and the Rentcharge.

11.3        to procure that the Rentcharge is registered in priority to any other interest or disposition
            made or to be made by the Disponee.

11.4        We have obtained all necessary statutory or third party consents for completion of the
            registration of the Disposal and the Rentcharge at HM Land Registry.

11.5        to complete the registration of the Disposal and the Rentcharge as soon as reasonably
            practicable and to deal promptly with any requisitions raised by HM Land Registry or HM
            Revenue and Customs relating to the application to register the Disposal and Rentcharge
            or the SDLT Return relating to the Disposal, respectively, and copy all correspondence
            relating to any such requisition to your solicitors.

11.6        within 3 working days of receipt of HM Land Registry's confirmation that the Disposal and
            Rentcharge have been registered, send Official Copy Register entries to your solicitors.




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11.7      within 10 Working Days of Completion or as otherwise required to comply with any
          requirement of the terms of the Disposal to provide to any third party copies of any
          documentation or any notice relating to the Disposal in respect of the grant of the
          Rentcharge.




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                                               Annexure 3

                                        Recovery Calculations

In this annexure, words and phrases defined in Annexure 1 shall (where the context allows) have the
same meaning when used herein as therein.

1         Calculation of Attributable Grant to be repaid

          Subject to Condition 11.9 of the Grant Agreement, the amount of Attributable Grant to be
          repaid upon a Recovery Event shall be calculated according to the formula set out below

          ARG = RG x (IFS / TRIFS)

          Where:

          ARG      Attributable Rented Grant

          RG       Rented Grant

          IFS      internal floor space for the relevant Dwelling

          TRIFS internal floor space for all Dwellings in the Scheme which are Affordable Housing
                for Rent

2         Calculation of the Agency’s Proportion

          Subject to Condition 11.9 of the Grant Agreement, the Agency‟s Proportion shall be
          calculated pursuant to the relevant formula set out below. Save where expressly stated to
          the contrary, in no circumstances shall the Agency‟s Proportion ever be less than zero.

2.1       Disposal under the Right to Acquire

          Where a Dwelling is disposed of under the Right to Acquire, the Agency‟s Proportion shall
          be calculated as follows:

          HP = ((AG/AFSC) x (IVP) – PR) – RTA

          [expanded: HP = ((AG/AFSC) x (NV – AFSC) – PR) – RTA]

          Where:

          HP       Agency‟s Proportion

          AG       Attributable Grant

          AFSC Attributable Final Scheme Costs

          IVP      Increase in Value (Proportion)

          PR       Previous Recovery

          RTA      RTA Discount




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          provided that where the Agency's Proportion calculated pursuant to this Paragraph 2.1 is
          less than zero, such negative amount may be set off against the repayment of the
          Attributable Grant in relation to such Dwelling as calculated under Paragraph 1.

2.2       Disposal under the Right to Buy

          Where a Dwelling is disposed of under the Right to Buy, the Agency‟s Proportion shall be
          calculated as follows:

          HP = ((AG/AFSC) x (IVP) – PR) – HRTB

          [expanded: HP = ((AG/AFSC) x (NV – AFSC) – PR) – ((AG/AFSC) x RTB)]

          Where:

          HP       Agency‟s Proportion

          AG       Attributable Grant

          AFSC Attributable Final Scheme Costs

          IVP      Increase in Value (Proportion)

          PR       Previous Recovery

          HRTB HCA's share of the right to buy discount

          RTB      RTB Discount

          provided that where the Agency's Proportion calculated pursuant to this Paragraph 2.2 is
          less than zero, such negative amount may be set off against the repayment of the
          Attributable Grant in relation to such Dwelling as calculated under Paragraph 1.

2.3       Any other disposal giving rise to payment of the Agency’s Proportion except
          disposals pursuant to the Right to Acquire or Right to Buy

          The Agency‟s Proportion shall be calculated as follows:

          HP = (AG/AFSC) x (IVP) – PR

          [Expanded: HP = (AG/AFSC) x (NV – AFSC) – PR]

          Where:

          HP       Agency‟s Proportion

          AG       Attributable Grant

          AFSC Attributable Final Scheme Costs

          IVP      Increase in Value (Proportion)

          PR       Previous Recovery




HSNG.1727874.1                                      96                                SBS.51183.137
3         Calculation of the Agency’s Surplus

          Subject to Condition 11.9 of the Grant Agreement, the Agency‟s Surplus shall be
          calculated pursuant to the formula set out below provided that the Agency‟s Surplus shall
          in no circumstances be less than zero.

          The Agency's Surplus shall be calculated as follows:

          HS = (AG/AFSC) x (IVS)) – PR

          [Expanded: HS = (AG/AFSC) x (NV – (AFSC – AG)) – PR]

          Where:

          HS       Agency‟s Surplus

          AG       Attributable Grant

          AFSC Attributable Final Scheme Costs

          IVS      Increase in Value (Surplus)

          PR       Previous Recovery




HSNG.1727874.1                                   97                                    SBS.51183.137

				
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