5  Allocations and Nominations

In consideration for the payment of the Unitary Charge the Authority in a non-HRA Project obtains the benefit of allocation or nomination rights for the Dwellings.  The Authority should have such rights for 100% of the Dwellings during the concession period and will need to have in place its own allocation/nomination policy or protocol.  Suitable drafting to cover this is set out at paragraph 30 of this Guidance.

The Authority should also consider its allocation/nomination requirements following termination or expiry of the Project Agreement.  Such requirements vary considerably between Authorities and, as noted above, may have an impact upon residual value.  Experience from past non-HRA Projects has been that Authorities do impose post contract nomination rights but they do tend to be in relation to a reduced number of the Dwellings and/or for a limited period post contract.

An issue linked closely to allocation/nomination rights is that of demand risk.  In non-HRA Projects the standard position is that demand risk lies with the Contractor and following a period of time within which the Authority has a right to nominate a tenant to a Dwelling the Contractor is then responsible for finding a tenant for a Dwelling.  It may be appropriate for the Authority to waive (or alter) its allocation/nomination rights in respect of Dwelling(s) in circumstances where there has been a prolonged period of low demand for Dwelling(s).  For VfM reasons an Authority should consider tiered allocation/nomination rights and demand risk arrangement that would allow increased flexible tenure use by a Contractor in a low demand situation, e.g. from assured tenancy to non-social rented tenancy to shared ownership and market sale.

An alteration of the Authority's allocation criteria may make it easier to let a Dwelling whilst a waiver would permit the Contractor to sell the Dwelling.  Authorities should take detailed advice on the definition of low demand and on the relief it affords to the Contractor for prolonged periods of low demand.  If a sale of a Dwelling is permitted due to low demand then the Authority should make sure it obtains the benefit of all or a proportion of any positive equity which is realised from the sale.