Recovery of Capital Grant General Determinations 2017
Last updated: 27 Mar 2017
- Consulting body:
- GLA and Mayor of London
- Period of consultation:
- Runs from 23 March 2017 to 11 April 2017
- CML action:
- Response submitted
The Greater London Authority (GLA) is now proposing to introduce a grant condition in its new funding contracts, requiring providers to notify the GLA upon any event which leads to the recovery of grant funding from land or property previously funded by the GLA.
The GLA advise that it is their intention that:
- such events would include specified disposals of land or property previously funded by the GLA, and changes of use
- such events would not include the first initial sales of shared ownership properties, nor putting a charge on a property in favour of lenders; and that
- failure to notify the GLA of such events would constitute a grant recovery event
To take this forward, the GLA has issued a consultation on a new draft Grant Recovery Determination (scroll to heading “Recovery of Capital Grant General Determinations 2017”), which sets out this new approach.
It is understood that further details of the notification procedure will be published in the funding contracts and updated Capital Funding Guide.
The proposed new approach relates to a protection of investment by way of grant. In the new approach, we understand that the GLA cannot prevent a disposal (this was a fundamental concern to funders in possession scenarios in the earlier proposed title restriction).
Instead, the GLA requires to be notified should circumstances arise in which grant may be recoverable.
We understand that sector legal advisers will be responding separately via their Security Working Group to express their conclusion that the proposed new determination is acceptable from a lender's point of view.
The CML therefore has no objections to the proposal at this time, subject to the response of the sector.
The CML response document can be downloaded below.