Opinion: Cameron is in danger of being like Mugabe on property

Terraced housingHousing is Londoners’ top priority according to the polls. Not surprising – with problems ranging from the cost, to shortage and too often to the quality too.

Yet the Conservatives’ lead housing policy – to extend the right to buy to housing association tenants – will solve none of these London housing problems: we should make attacking it a Lib Dem campaign priority for next year’s GLA elections.

It’s not that right to buy is inherently wrong: the original policy back in the 1970s and 1980s helped some council tenants escape some shockingly bad local authority landlords. Yet over time, the right to buy developed serious weaknesses – as receipts were never invested into new social housing, as discounts increased and as widespread fraud set in.

And as a solicitor who’s worked in social housing for 20 years, I’ve been amazed how Government and councils alike have failed to recognise the unfairness, the high costs and the waste for taxpayers now prevalent in right to buy.

Yet this new Tory right to buy extension has all the faults of that old system – and more besides.

First, the homes owned by housing associations are not the Government’s: it should offend not just Liberal values but Conservative ones too, for Tories to propose to legislate to force independent non-state bodies to have to give up their properties.

While some of these homes were built with some taxpayer subsidy, vast numbers received no public support at all, especially those not part of a stock transfer. Such a policy of quasi-expropriation means Cameron is in danger of being more like Mugabe on property – than the One Nation Tory Macmillan, who actually built huge numbers of social homes.

Second, this new right to buy is a colossal waste of money – which will not only fail to see many new homes built but will undermine the ability of housing associations to proceed with future investment programmes. Housing associations get most of their investment resource from private borrowing. Their lenders will be alarmed to see Tories selling off assets they lent money on, at a discount! Lenders’ concerns will lead to higher interest rates for funding future housing association development – and that will mean fewer new social homes.

Taxpayers too should be alarmed as Tories hand out subsidies of over £100,000 at random!

I hope the Liberal Democrats can be clear and unequivocal on this: whether you’re on the right or left of the party, this new Tory right to buy is unethical, unaffordable and daft.

* Emily Davey is the Membership Secretary of Kingston Liberal Democrats. She has previously stood for Parliament four times.

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  • Eddie Sammon 16th Jun '15 - 5:03pm

    Totally agree Emily and good line about Mugabe. However even someone as skilled as the new Harriet Harman fluffed an attack on this lines, so the wording has got to be spot on otherwise the Tories will cry “anti aspiration”.

    Personally I think there needs to be a “right to bid” rather than a “right to buy”. Housing associations should not be compelled to sell. As you say: vast numbers received no public support at all. I did not know this.

    Good informed article on a subject you specialise in. Good bit of history about Macmillan too. I often wonder why Tories don’t talk about Macmillan and Baldwin more. There seems to be an obsession with Thatcher and Disraeli.

  • very good article! Why doesn’t Cameron force private landlords to sell their houses to tenants cheap??

    Well, that is a rhetorical question, of course! But it has always seemed very unfair to me that council tenants got to offset rent paid against the value of the house, but not private tenants… The fact is that housing stock is of great value to housing associations (and local authorities), and posing the question in terms of private landlords demonstrates that to all voters. If a housing association gets into trouble then as a last resort they can sell some property at market value and continue

  • An very intriguing article Emily. Let’s look at the small print and see if we can work out the giveaway scam?
    “The Conservatives say every house purchased will be replaced “on a one-for-one basis” with more affordable homes and no one will be forced to leave their home.”
    Let’s extract the detail from that Tory promise :
    1. A more affordable home will be the result.
    2. It does *not* promise an *extra* home, merely a ‘one for one’ more affordable home.
    2. The original tenant will have no forced, need to move.
    So let’s see how this scam might work. ?
    A Housing Association tenant is paying (say) £1000/ month rent for a home that the HA values at (say) £300,000. Private landlord puts up the money for purchase via the tenant who gets a 35% discount. So private landlord purchases the house for £195,000. Private landlord now sets the same original tenant a new (35% discount) rent of £650/ month.
    Have all the governments (scam) criteria been fulfilled?
    1. More affordable.? ( Down from £1000 to £650 /month) [Yes, box ticked]
    2. One for One affordable home? ( It’s the *same home* but it’s now more affordable ) [Yes, box ticked]
    3. The original tenant not forced to move? ( Why should they move, given that their rent has just been reduced from £1000 to £650 per month?) [Yes, box ticked]
    It’s a good scam,[for private landlords], but there is zero incentive for the Housing Association to build a replacement. Why would they rebuild, when 3 years later that too can be ‘purloined’,.. for 65% of its worth?
    End note on the legality : Most Housing Associations are non-profit Charity Registered. How does that stack up (legally), with this Tory giveaway promise?

  • Samuel Griffiths 16th Jun '15 - 7:34pm

    Pleased to be able to say I voted for Emily in her old constituency. But delighted to see someone tackling right to buy even more! The fact there has not been a LibDem response to this policy so far is unnerving, especially as it started within the last five years. All right to buy does is reduce the housing pool, effectively preventing fresh tenants from taking up the opportunities given to the existing. There is a little bit of me that feels social housing should be temporary, without the option for tenants to buy property that could go to the more needy.

  • simoncrobinson 16th Jun '15 - 8:15pm

    Would it be desirable to make it a requirement of any person or company buying property within the M25 to pay income/corporation tax in the EU?

    This would reduce the opportunities for new accommodation to be purchased as investments for people/companies which do not contribute very much to the UK/EU. Additionally it would shrink the pot of very wealthy people around the world who buy London properties and help to price locals out of the market to buy and also to rent.

    I can’t see that this policy would lose us many votes and could resonate well with renters and would-be buyers.

  • Is there anything to stop immediate post sale equity release?

  • Sammy O'Neill 16th Jun '15 - 10:15pm

    Comparing Cameron to Mugabe is at best highly distasteful, at worst downright disgusting. There’s a difference between a housing policy you entirely disagree with and a racist tyrant who murders people to secure farmland for his cronies. Hyperbole like that doesn’t help in any debate.

    I’m fairly unconvinced either way on right to buy. On the one hand I appreciate the need to preserve social housing stock, but on the other recognise that lack of supply is what is driving prices in the private market up meaning that decreasing numbers of people have any hope of ever buying. Realistically if the government press ahead with this then I think there needs to be a firm commitment that the money raised will go back into building more housing, with government assisting through legislation to make this as simple and effective as possible for housing associations. Westminster Council have recently said they are looking at buying up land outside of London and building social/affordable housing on it. Perhaps right to buy ought to be linked to schemes like that.

  • Sammy O'Neill 16th Jun '15 - 10:30pm


    You make a very good point regarding the contradictions. I am surprised no parties are currently advocating a wave of new towns along the lines of Milton Keynes. Although the odd snob may look down on them, they have on the most part been a wonderful success and largely avoid the difficulty of local opposition as existing communities are tiny or non-existent. Lessons can of course be learned from the new towns (the need for proper public transport, difficulty with education provision etc) but I have never quite understood why that concept has effectively been abandoned. A few small ones like Cambourne have been built in the past decade, but nothing like a 250,000 population town has been attempted or proposed.

  • I think Mr Wallace you should perhaps acknowledge that there is no local councillor or candidate from any party who goes to the local electorate and backs major housing developments on green filed sites in their ward (or not if there is any chance of it being a tight contest). And all the parties promised to build loads of new houses over the next 5 years…

    I agree that this NIMBYism is a problem but fingering the Lib Dems as being unusually inconsistent on this is incorrect. And in many cases local infrastructure in the form of transport, schools and GP surgeries do not accompany the development and people are quick to see the obvious detriment to the community. And the other side of the coin is that every time local views are overridden roughshod, that is another nail in the coffin of democracy, so all developments need to offer real planning gain so that people see they have got something tangible in return – and negotiating that on behalf of the community should be one of the jobs of local representatives.

    The aspiration fuelled over many years to measure self-worth and satisfaction by the amount of space that you and your family can occupy is much more responsible for the housing crisis than Lib Dem councillors…

    Meanwhile there are still plenty of brownfield sites in the Uk but developers don’t like them because they offer less profit… And there are plenty of developments with approval that have been on hold for years or are half-finished.

  • Simon Gilbert 16th Jun '15 - 11:00pm

    Great article and a catchy headline that highlights the arbitrary nature of this property theft scam!

  • @John “Most Housing Associations are non-profit Charity Registered. How does that stack up (legally), with this Tory giveaway promise?”

    Don’t see the any problem. Even in the unlikely event the housing association ends up with a surplus, they can simply change their reserves policy.

    Personally, I suspect any savvy housing association will be changing the legal structure of their propery portfolio and tenancies. Changing the entire nature of the agreement so that they are more in line with car leasing arrangements, namely you pay a monthly subscription/premium which entitles you to some set of services and benefits. Additionally, you simply break the ‘house’ down, into it’s parts: the building, the land the building actually occupies, the surrounding gardens/yard etc. and the access rights (ie. ransom strip) for utility services, people and vehicles. So yes you can buy your ‘home’ but getting between the front door and the street will carry a premium…

  • I trained, many years ago, as a Chartered Surveyor. Valuing tenanted accommodation was done on an investment basis. The investment value was the remaining period of the tenancy, at a rental income of £x, less anticipated outgoings (maintenance) times the “years purchase” derived from required interest on investment. But when a sitting tenant purchased the freehold of the home they occupied the price was usually negotiated somewhere around halfway between the investment price and the freehold price. Whilst the security of tenure held by a tenant was the basis of this, the effect could be seen as a discount. It wasn’t. It was just economics.

    The effect of these economics on social housing, however, means that replacing previously tenanted housing with new housing available for rent becomes subject to diminishing returns.

    Claiming that each house sold will be replaced by another house made available for affordable rent is not sustainable.

  • @ Mr Wallace,

    Until last month I lived in Pudsey constituency and believe me the Labour party (PPC and council candidate, and all the candidates for Horsforth Town Council who all named “protecting green belt” as their number one socialist policy…) were extremely vocal in opposing a fairly small new housing development on green belt next to the Leeds Ring Road, as were Lib Dem councillors and the Tory MP, and the Greens… So a very rare case of political consensus (not sure about UKIP – the farmer who stands to make money out of the development changed from Tory to UKIP, so maybe they were secretly in favour?)

    I happen to agree with you that it is a problem, but we should recognise that it is a genuine problem for local democracy which happens to be a key Lib Dem principle, enshrined in the preamble. The fact that we actually believe that local people should have a big say in their communities is what distinguishes us more than anything else from the other more dictatorial and vested interest-based parties. But since local communities have different priorities this of course leads to contradictions that people from those other parties love to seize on…

    What we need is a multi-pronged policy, new towns, higher housing density where appropriate/possible, infrastructure always accompanying developments, making second home ownership less attractive, taxing land value to discourage private estates and full development of brown field sites both urban and rural. And opposing selling off of housing stock cut price!

  • Good article, Emily.

    With the average house price in London now topping £600k and average monthly rentals exceeding £1500 the affordability crisis is deepening month by month.

    London will continue to draw in more people, increasing its population and developing its transport infrastructure to facilitate movement around the capital.

    I think Andrew is approach is the right one – a multi-pronged policy, new towns, higher housing density where appropriate/possible, infrastructure always accompanying developments, making second home ownership less attractive, taxing land value to discourage private estates and full development of brown field sites both urban and rural. And opposing selling off of housing stock cut price!

    I mentioned in a thread below that Centre Forum has recently called for a Royal Commission to investigate proposals for taxing Land Value. This would not be the first time a Royal Commission has considered the issue.

    The Royal commission on the Housing of the Working Classes set up in 1885 considered land value taxation (it was then called site value rating) with members concluding that the rating of land values would increase the supply of land available for housing in contrast to the existing rating system which was considered to be an impediment. The commissioners concluded that owners of land suitable for residential development: “could afford to keep their land out of the market and to part with only small quantities so as to raise the price beyond the natural monopoly price which the land would command by its advantage of position. Meanwhile, the general expenditure of the town on improvements is increasing the value of their property.”

    As you mention in your article, it took seventy years and two world wars before Macmillan actually built huge numbers of social homes. The same problems are back again in London and the same solutions are needed – Henry George’s Land Value Tax , massive public and private investment in new housing stock and rapid rail connections to commuter towns.

  • …………………………………………It’s not that right to buy is inherently wrong: the original policy back in the 1970s and 1980s helped some council tenants escape some shockingly bad local authority landlords. Yet over time, the right to buy developed serious weaknesses – as receipts were never invested into new social housing, as discounts increased and as widespread fraud set in………………………..

    It WAS/IS inherently wrong……It had nothing to do with ‘tenancy’ and everything to do with buying votes……As for ‘over time’ ‘as receipts were never invested in new housing’…..The original ‘scam’ specifically prevented the money being used to build new council homes…..

    The largest discounts were for the longest tenancies i.e. older tenants whose children had long left home….Families clubbed together and bought ‘Mums/Dads house as an investment which was sold as soon as Mum/Dad died….It is no accident that over a third of London council built homes are now ‘gold mines’ in the ‘buy-to-let’ sector….It is no coincidence that only about 1 ‘replacement’ home has been built for every 100 sold…..

    Like every Thatcher ( and those venerating her memory) wheeze…..’ the devil was in the detail’

  • Peter Davies 17th Jun '15 - 7:31am

    If we want local and national politicians to speak with one voice, we need to re-align the interests of their electorates. That means putting policies in place nationally that mean local people benefit from more homes being built in their area. The coalition introduced a ‘New Homes Bonus’ which incentivised local authorities. That could be increased and improved my making it a simple multiple of the annual increase in people adequately housed in the area. We also probably need some way of ensuring that most of that money is spent at an even more local level.

    … and land tax obviously.

  • Matthew Huntbach 17th Jun '15 - 9:21am

    Mr Wallace

    Does anyone in the Lib Dems actually acknowledge the huge problem they have, with different local parties doing different things? Lib Dem councillors getting elected by promising selfish wealthy NIMBY’s

    It isn’t just a small group of selfish wealthy people who take this attitude. In my experience ANY major house building project will get mass opposition from the people living around. You get it just as much in poor areas where what looks like a scrubby “brown field” site gets a proposal, and local people come out in opposition saying how much those few trees and bushes mean to them as green space.

    It is a problem which we need to face straight on. It does mean the answer to the housing crisis is not just to try and build more to “meet demand” but also to have taxation on property to discourage people from holding onto it when they don’t need it.

    Just building more houses will never meet demand, because people will go on demanding. We may all demand a big house in the country and a city pad, but we aren’t going to get it, are we? So we need to ensure that what is built goes to those who need it. If you just build and let whoever can pay the most buy it, you will get it bought up for buy-to-let, and then let out to those who were squeezed out of buying because the buy-to-letters could afford to pay more.

  • expats 17th Jun ’15 – 7:06am
    ………………………………………… right to buy

    “It WAS/IS inherently wrong……It had nothing to do with ‘tenancy’ and everything to do with buying votes…”

    Expats, you are spot on. this was a law of the jungle policy. For anyone who was lucky enough to be in anise with a garden and their faiy had been the tenants for or than twenty years it was the nearest thing possible to being given a cheque for tens of thousands of pounds as an electoral bribe.

    Emily is probably too young to remember this being brought in. In fact some Conservative Councils had started selling off houses in the late 1960s before Thatcher made it a key conservative vote buying policy.

    It was nothing whatsoever to do with freeing people from terrible council landlords. The Conservatives didn’t give a toss about people suffering at the hands of terrible landlords, the Conservatives were the terrible landlords in both private and public sector.

    Much of what Emily has written here is OK but if you start from the false premise that there was nothing wrong with the ill-named “Right to buy” in the first place, you are missing a very important point. ‘Right to buy’ was always about stealing the communities assets and fogging them off for a fast buck

  • In response to Alistair currently when a tenant enters a deferred sale agreement to purchase their property the statutory charge will apply so it will be as if they never received the discount. For example tenant A does a deal with finance company B that if B gives them the money A will buy the property under the RTB then transfer it to B and rent from B at a market rent. In this situation as soon as the tenant enters this agreement they have to repay the discount

  • As an aside on the people doing the right to buy becoming buy to let landlords curtesy of the states £100,000 plus discount. Part of the problem is that a tenant can purchase the property under the Right to Buy, move in with a friend and let it out the property under an Assured Shorthold tenancy for market rent from day one and they don’t have to repay the discount. Alternatively in more rural areas they can sell off the garden to the local developer on day 1 and not have to repay the discount.

  • Lester Holloway 17th Jun '15 - 11:39am

    The headline made me think this was about Cameron giving houses to the dispossessed and poorest in society. I was ready to break a habit of a lifetime and vote Tory for the first time. Alas, Cameron isn’t redistributing anything.

  • Alex Macfie 17th Jun '15 - 1:04pm

    Yes, that is typical trendy lefty thinking, that left-wing tyrants, particular in former UK colonies, should be above criticism. Probably why Lester Holloway thinks we shouldn’t be supporting fellow liberals in Africa.

  • Lester Holloway 17th Jun '15 - 1:19pm


  • I am sorry but the comparison between the PM and Mugabe is spurious and wrong. I would expect that on Labour list or some rant in the guardian/Daily Mail. .

    Disagree with the PM ( i often do), and point out the serious flaws in the policy – but don’t bother with the faux political gestures, Mugabe is a killer and man of dubious morals and the leader of a semi-dictatorship. None of this relates in anyway to the PM – be it a tory of not.

  • Alex demonstrating the Lib Dem “Welcome Home!” technique with aplomb, part of the great “8 MPs & Falling” Strategy! 🙂 Perhaps insulting other members isn’t the best route ahead? Maybe I’m wrong…

    I think the Mugabe comparison a red herring, might have led some off the path of courteous debate. Other than that, agree with most of the article, but also the point that “right to buy” was never right.

  • Matthew Huntbach 17th Jun '15 - 1:48pm


    For anyone who was lucky enough to be in anise with a garden and their faiy had been the tenants for or than twenty years it was the nearest thing possible to being given a cheque for tens of thousands of pounds as an electoral bribe.

    Yes, it was indeed very good for those people. It was done at a long-term cost to everyone else, well, that is except private landlords who thanks to it are having great dollops of cash being put into their pockets taken from taxpayers and passed to them through the housing benefit system.

  • Lester Holloway 17th Jun '15 - 2:09pm

    To get serious for a minute, as a half-Zimbabwean who has visited many times, who has seen the flattened MDC areas for myself and who has had a much-loved inlaw picked up and tortured for a week for no good reason before being dumped in the bush, I’d like to offer a perspective on the comparison.

    What we’re seeing here is a version of the equally-lazy comparison some people (like Ken Livingstone) make between virtually anything and Hitler / the Nazis.

    So before we indulge in any lazy associations between Conservative housing policy and Mugabe, it’s worth reflecting for a moment on the modern history of Zimbabwe and its’ interaction with the UK.

    First, Mugabe has ruled with a rod of iron every single year of his reign, with his worst moments by far occuring before white farmers were ousted from farms with hardly a whisper from the UK. Second, there is a strong case that several Western-friendly African leaders who do not attract much criticism in this country are more oppressive than him. And third, before the so-called War Veterans seized farms Tony Blair had precipitated the collapse of the Abuja Agreement to pay substantial compensation for farms leading to a boiling over of impatience for reform that was promised since 1980, which Zimbabweans had spent ten years fighting for, but not delivered.

    This year one person has gone missing in Zimbabwe, almost certainly picked up by the State. One too many but a substantial improvement on years gone by. If I’m allowed a spurious comparison, this year several people have died in UK police custody under suspicious circumstances, including Sheku Bayou.

    There’s a bit of amnesia here about the impact of colonialism. My grandma died as a direct result of the Aparthied State of Ian Smith. I have several relatives who fought for a terrifying war for years against this tyranny. So when it comes to tyrants, it’s all relative (no pun intended).

  • Lester Holloway 17th Jun '15 - 2:41pm

    I used to be a LD councillor in the Sutton North ward that includes a highly desirable ‘garden village’ called the Sutton Garden Suburb. It was built as social housing by the ice cream and bangers businessman and philanthropist Thomas Wall. He wasn’t an active Liberal as far as I know, but he was very much chimed with the Liberal vision of social improvement at the time. That was not merely the building of social housing, but the building of high-quality communities. The working class deserves nothing but the best. His project was interrupted by the war. After the war Labour constructed large cottage estates, like the St Helier estate immediately to the north of the Sutton Garden Suburb. This was definitely a step down in quality.

    Every decade since we’ve seen a further reduction in the quality of social housing, from the concrete high-rise estates of the 60s and 70s to the better constructed but smaller shoeboxes of today. Our vision for what social housing should be has withered away. Social housing and quality community areas have been largely divorced. Often it is nothing more than an add-on to development projects, a few small spaces above a supermarket. Even more frequently councils, including LD ones, accept unaffordable ‘affordable’ housing in place of social housing.

    Too many have forgotten what the meaning of ‘social’ is in social housing. They are more than people on the council housing list, more than the number of points allocated to their name. They are people who deserve quality houses like the rest of us. People whose aspirations can be raised by their quality of life. The Tories like to divide the deserving and undeserving poor. In their book the deserving deserve the absolute minimum, and the undeserving deserve nothing. As Liberals we need to offer an alternative vision, of more than ‘x’ number of units. A vision that our early political ancestry had of real quality communities, social houses that private buyers would be prepared to pay over £1m for.

    This was the vision that Thomas Wall had. How wonderful would it be to see a revival of these ideals?

  • John Tilley 17th Jun '15 - 6:49pm

    Lester Holloway 17th Jun ’15 – 2:41pm

    Lester, that is an excellent brief summary of the decline in the vision of proper social housing.
    Over time the concept of ‘Homes fit for Heroes’ was downgraded and destroyed by Conservatives who knew the price of everything and the value of nothing.
    The council house that I was born in was (and still is) an excellent home, built to Parker Morris standards with a garden, in an area with adequate open spaces. Nobody would pretend that the council housing created utopia but it was a million times better than what many people are having to put up with now.

    I agree with Emily Davey that housing should be a crucial Liberal Democrat attack up to and beyond next May; especially in London.
    I find it odd that whilst Tim Farron has been making speeches and pushing for answers to housing problems for years, some others in the party have still not woken up to the mounting costs to society (as pointed to above by Matthew Huntbach).
    Perhaps all that “free market” “supply and demand” nonsense has blinded some people to what has been happening in the real world beyond the pages of their economics text-books.

  • Richard Underhill 17th Jun '15 - 10:45pm

    This is not the first time the Tories want to sell something they do not own. There was the sale of the Trustee Savings Banks during the Thatcher era.

  • Neil Sandison 18th Jun '15 - 8:23am

    Lets be honest the Tories haven’t had a fresh idea on housing since the 1980s and this daft idea is just a rework of an old idea right to buy for council tenants .Many of those properties sold at that time can now be found in the portfolios of private landlords costing even more money in housing benefit subsidy .The suggestion that councils should sell off their best and possible newest housing stock to fund it is equally as perverse . This means we will be losing two not one unit of social housing from our district councils who are already hard pressed to meet local demand.This is ideological not practical and just plain bad housing policy.
    There is a solution that meets both the aspiration of HA and Council tenants who want to move on to home ownership .That solution is a transferable deposit scheme to enable former renters to buy a new build home on the open market by enabling those who can afford a mortgage but not the deposit to gain a foothold on the home ownship ladder.This transferable deposit would only be paid if the council could prove that the vacant rented property was then on to be offered to someone in genuine housing need.This is a win ,win The former tenant gets a fresh start in a new home they can actually afford. The council gets a property back which they can relet at half the price it would cost to build a new housing unit.It would encourage developers to again build modest and attainable properties for sale because they knew there was a potential market for those homes.
    Month in and month out I see as a planning councillor developers cutting the number of affordable or low cost homes they bring forward because it is not economically viable to provide the number of homes we need as an authority.Keeping the lower price end of the market viable is therefor in every ones interest.both for those who aspire to home ownership and councils who desperate to see housing completions delivered to meet local needs.
    HA and Council tenants who can afford that mortgage need access to new homes and of course it gives someone else the chance of a rented home when they most need it.

  • Joe Bourke

    “Henry George’s Land Value Tax , massive public and private investment in new housing stock and rapid rail connections to commuter towns”

    I would add improved investment in transport infrastructure to make better ‘clustering’ possible in the regions.


    “I think the Mugabe comparison a red herring, might have led some off the path of courteous debate.”

    Agreed, it distracts that the Tories are attacking the principle of property rights with the inevitable negative impact on investment (in this case in Social Housing).

    I would also point out one comparative, HA homes are independent institutions. The national Trust is also an independent institution owning property, often with a tenant (sometimes as part of an agreement when the property was donated sometimes as a safety measure). Presumably the Tories aren’t going to demand the NT offer to sell back their property to the tenants so why for HAs?

  • @JohnDunn “Most Housing Associations are non-profit Charity Registered. How does that stack up (legally), with this Tory giveaway promise?”

    Reflecting upon my previous posting, I see there are two potential legal problems! The problem hinges upon the wording in the Association’s governing document or constitution. I suspect that for many charities the selling of a property, especially at a discount, to a tenant will fall outside of their charitable aims and objectives, unless a case can be made that doing so furthers the aims and objectives.

    Additionally, it can be argued that spending money on the potential sale of property to tenants is a misuse of the charities monies. In which case the only way the charity can comply is to ask the prospective purchaser to provide a non-refundable service fee upfront, that full funds any costs the charity incurs in effecting the sale. Naturally there is no reason why this service fee should be or needs to be reasonable…

  • Lester Holloway 23rd Sep '15 - 11:26am

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