New Supply Shared Equity administrative procedures

Annexe E

Standard style of grant offer - relevant only to project approved under the Affordable Housing Investment Programme - and not the Innovation and Investment Fund

Dear Sir/Madam

[SUBJECTS: ]
[RESOURCE SYSTEM REFERENCE: ]

On behalf of the Grant Provider (after defined), I hereby offer to make to you the Grant Recipient (after defined) the Grant subject to the following terms and conditions and the conditions contained in the Standard Conditions of Grant forming Part 1 of the Schedule annexed hereto ("the Schedule").

1. Interpretation

1.1 In this offer (the "Offer") the following expressions have the following meanings:

Acquisition Stage:	The stage in a Project at which a proposed Grant Recipient seeks to acquire the Subjects.
Approved Contract Sum:	£ [Insert where applicable the amount approved]
Approved Contractor:	[Insert where applicable the name of the Contractor whose tender is to be accepted]
Approved Costs:	As specified in Part 2 of the Schedule.
Approved Documents:	All specifications, designs, bills of quantity, plans, forms of building contract, professional appointments and tender reports submitted to and approved by the Grant Provider in respect of the Project.
Drawdown:	A drawdown of the Grant.
Grant:	The provision of [insert the total amount of grant on offer] towards the provision of housing for sale for owner occupation on a shared equity basis in accordance with the Shared Equity Procedures.
Grant Agreement:	This Offer and the Grant Recipient's acceptance.
Grant Allocation by Year:	The allocation of Grant by Year approved by the Grant Provider as specified in Part 3 of the Schedule.
Grant Provider:	For Scottish Ministers insert: [The Scottish Ministers of [insert the relevant Area Housing Supply Team Office address] For a local authority insert: [The name and address of the local authority]
Grant Recipient:	[Insert the name and address of the Grant Recipient. If a company, this should be the address of its registered office.]
HAG/Payment:	The form as specified in the Housing Association Grant Procedures Guide.
HAG/Settlement:	The form as specified in the Housing Association Grant Procedures Guide.
Housing Association Grant Procedures Guide:	The procedures guide issued by Scottish Ministers.
Plan:	The plan, if any, annexed and signed as relative hereto.
Prescribed Rate:	For Scottish Ministers insert: Two per centum per annum above the base lending rate (or the equivalent) of the Royal Bank of Scotland plc or, in the event of that ceasing to exist, such other rate equivalent to it as the Scottish Ministers may specify. For a local authority insert: [The rate of interest set by the local authority]
Project:	As specified in Part 3 of the Schedule.
Realisation Form:	Any of the Equity stake increase form, the Open market sale form and the Property re-sale form as set out in Annexe G, Annexe I and Annexe J respectively of the Shared Equity Procedures.
Shared Equity Documentation:	All shared equity agreements, standard securities and ranking agreements in respect of the Project in the form set out in the Shared Equity Procedures.
Shared Equity Procedures:	The New Supply Shared Equity Scheme Administrative Procedures issued by Scottish Ministers.
Subjects:	[Insert the full address of the Subjects ( i.e. site/property addresses). If multiple properties are involved, the property addresses can be listed in a separate schedule and the words "As specified in Schedule Part [ ]." inserted here.]
Tender Stage:	The stage at which the Grant Recipient has a fully costed proposal in respect of the Project.
Unit:	An individual flat or house that is provided by the Project.

1.2 Except where the context otherwise requires words denoting the singular include the plural and vice versa, words denoting any gender include all genders, words denoting persons include firms and corporations and vice versa.

1.3 Any reference in this Agreement to guidance and/ or procedures shall be a reference to any amendment and/ or replacement of the same from time to time.

1.4 A reference to the Scottish Ministers shall include their statutory successors and predecessors.

2. Contract

2.1 This contract will commence on [insert commencement date] and shall endure for as long as obligations subsist under the Shared Equity Procedures.

3. Purpose of the Grant

3.1 The Grant will be used by the Grant Recipient to meet the costs of the Project and administering and where necessary enforcing the Shared Equity Documentation in a good and proper manner all in accordance with the Project and the Shared Equity Procedures and for no other purpose whatsoever.

3.2 This Offer will lapse in the event of any variation in the Approved Costs. The Grant Recipient will immediately notify the Grant Provider in writing of any variation and the Grant Provider may at its sole discretion issue a revised offer.

3.3 It is a material condition of this Offer that the Project will commence on site within [ ] weeks of the date of this Offer. [Delete if not applicable]

4. Payment of Grant

4.1 Payment of each Drawdown will be made by the Grant Provider to the Grant Recipient upon receipt of a HAG/Payment form accompanied by all necessary supporting documentation as required by the Grant Provider. It is understood that the Drawdown when paid will be applied to the Project within 14 days of payment by the Grant Provider.

4.2 The Grant or any instalment thereof will not be paid in advance of or in excess of expenditure incurred, save where the Grant or any instalment thereof is required in respect of the acquisition of the Subjects in which case the Grant or any instalment thereof may be paid within fourteen days prior to the expenditure being incurred in respect of that acquisition.

5. Acquisition Stage

5.1 Where the Grant is to be applied towards the acquisition of the Subjects, the Grant Recipient will obtain vacant possession of the Subjects and a good marketable title in terms of Clause 11 of Schedule Part 1. The Grant Recipient will immediately following settlement confirm to the Grant Provider in writing using form HAG/Settlement that the foregoing has been carried out.

5.2 The Grant will be repayable to the Grant Provider in the event of the Subjects or any part thereof not being developed in accordance with the Project or in such other manner as is approved by the Grant Provider.

6. Tender Stage

6.1 The Grant Recipient shall accept the tender submitted by the Approved Contractor and in the Approved Contract Sum.

7. Sale or Disposal

7.1 The Grant Recipient will not sell or otherwise dispose of the Subjects, the Units or any part thereof save as in accordance with the Project without prior written notification to the Grant Provider and without first satisfying the Grant Provider that it has obtained all necessary statutory consents to such sale or disposal, including (where applicable) written consent of Scottish Ministers under Section 66 of the Housing (Scotland) Act 2001.

7.2 The Units will be marketed by the Grant Recipient in accordance with a strategy agreed in writing with the Grant Provider and the Shared Equity Procedures.

8. Shared Equity Procedures

8.1 The Shared Equity Procedures shall be deemed to form part of this Offer and by acceptance the Grant Recipient agrees to abide and comply with the Shared Equity Procedures. For the avoidance of doubt but without prejudice to the rights of the Grant Provider under this Clause and Condition 3 (Interest) of the Standard Conditions:

(i) duly completed Realisation Forms shall be submitted to the Grant Provider within one week of the transaction to which they relate taking place all as set out in those forms; and

(ii) payment of all sums due by the Grant Recipient to the Grant Provider in terms of the Realisation Forms shall be made to the Grant Provider on the date specified by the Grant Provider (either in the relevant request or otherwise) following receipt by them of that Realisation Form.

8.2.1 The Grant Recipient shall appoint legal advisers (acceptable to the Scottish Ministers) ('legal advisers') to act for them in connection with the Project.

8.2.2 The legal advisers will within 14 days of the date of your acceptance provide the following letter to the Scottish Ministers c/o the relevant address set out in Section 8 of the Shared Equity Procedures or such other address (including email address) as the Scottish Ministers may specify:

Dear Sirs

Name of registered social landlord (the ' RSL')

We act as legal advisers for the RSL in connection with [insert description of the Project as defined in Part 3.1 of the Schedule to the Grant Offer] and confirm that we have exercised and will continue to exercise the level of skill and care which would reasonably be expected of solicitors engaged in work of this nature.

This letter is without prejudice to any other rights which the Scottish Ministers may have.

Yours faithfully

8.2.3 In the event that there should be a change of legal adviser during the Project the new legal adviser will provide a letter on the same terms as those set out in Clause 8.2.2.

9. Default

9.1 The breach of any of the terms and conditions contained in this Offer shall constitute a default.

9.2 In the event of a default which is, in the opinion of the Grant Provider, capable of being remedied, the Grant Provider will allow the Grant Recipient a period in which to remedy that default, said period being determined by the Grant Provider on the basis of what it considers reasonable in the circumstances and the Grant Provider will serve a notice in writing on the Grant Recipient to that effect.

9.3 In the event of a default which is in the opinion of the Grant Provider not capable of being remedied or is a default in terms of Clause 9.2 that has not been remedied in terms of that clause:-

(i) where no Grant has been paid the Grant Provider will not make a payment; and

(ii) in all other cases where payment of Grant has been made the Grant Recipient will immediately repay to the Grant Provider any such payment or part payment up to the full amount of the Grant under deduction of any sum attributable on a pro rata basis to any Unit or Units provided in accordance with the Project.

10. Acceptance

10.1 This Offer is open for acceptance in writing to reach the Grant Provider not later than twenty eight days after the date hereof (or such other period as may be mutually agreed) and if no such acceptance has been received, then this Offer will be held to have been withdrawn.

10.2 By acceptance hereof the Grant Recipient consents to this Offer and its acceptance being registered for preservation and execution.

[ Clause 11 below must be included in offers where the Grant Provider is a local authority. It must not be included in offers where the Grant Provider is the Scottish Ministers.]

11. Scottish Ministers

11.1 The parties acknowledge that the Grant Provider is administering the Grant for the Scottish Ministers who shall be entitled to rely upon and enforce the Grant Agreement as if the Grant Provider were the Scottish Ministers.

11.2 Without prejudice to all rights of the Scottish Ministers under Clause 11.1 and regardless of whether the same is expressly stated in any Clause hereunder:

11.2.1 all obligations by the Grant Recipient to the Grant Provider shall also be owed to the Scottish Ministers; and

11.2.2 where the Grant Recipient assumes liability in respect of any form of loss suffered by the Grant Provider this shall include an assumption of liability for any form of loss suffered by the Scottish Ministers.

11.3 All Realisation Forms and/ or payments to be made thereunder shall be sent to the Grant Provider unless either the Scottish Ministers or the Grant Provider so require.

THIS IS THE SCHEDULE REFERRED TO IN THE FOREGOING OFFER BY [ ] TO [ ] ("the Offer")

PART 1

STANDARD CONDITIONS OF GRANT

Acceptance of Offer

1. No payment of Grant will be made until the Offer is accepted.

Breach of Terms of Offer

2. Failure to comply with the terms and conditions in the Offer will be deemed to be a default on the part of the Grant Recipient and the Grant Provider may, on such a default, enforce its rights in accordance with the Offer.

Interest

3. The Grant Recipient will make payment of any sum due to the Grant Provider in terms of the Offer by a date specified by the Grant Provider for that purpose and interest at the Prescribed Rate will be payable by the Grant Recipient to the Grant Provider on any sum which is overdue.

Expenses

4. The Grant Recipient and the Grant Provider will bear their own legal fees which arise in connection with the entering into of this Offer. All other legal fees and expenses will be borne by the Grant Recipient.

Compliance

5. The Grant Recipient shall ensure that in carrying out the Project it will (a) comply with all applicable statutory requirements including without prejudice the obtaining of all licences which are necessary or in the opinion of the Grant Provider desirable and (b) without prejudice to the terms of Clause 8 of the Offer (Shared Equity Procedures) ensure that third party warranties are or will be obtained in terms of Section Three of the Shared Equity Procedures.

Indemnity

6. The Grant Recipient will indemnify the Grant Provider and the Scottish Ministers from and against all actions, proceedings, claims, losses, expenses and damages arising from any breach by the Grant Recipient of any undertaking or obligation in connection with the Grant and for all liability in respect of personal injury to or death of any person or of any damage to any property arising out of or in the course of or caused by the carrying out of the Project by the Grant Recipient or those authorised by it.

Insurance

7. The Subjects and any Units thereon will be adequately insured to the satisfaction of the Grant Provider and in the case of the Units for at least full reinstatement value.

Project Agreements

8. The Grant Recipient will not breach any agreement with the Grant Provider and/ or the Scottish Ministers in respect of the Project.

Project Completion

9. All development works forming part of the Project will be carried out with all due diligence, completed to the satisfaction of the Grant Provider and no material changes will be made to the Approved Documents without the prior written consent of the Grant Provider.

Time Limit

10. The Offer will be deemed to be withdrawn where the Project does not commence or proceed within time periods specified in the Offer unless the Grant Provider consents in writing to extend those specified periods.

Title

11. The Grant Recipient or the granter of a Licence Agreement to the Grant Recipient has or can obtain a good and marketable title to the Subjects with no burdens, conditions, restrictions or servitudes affecting the Subjects which would adversely affect the Project or Scottish Ministers' shared equity interest in any Unit or Units and for the avoidance of doubt the Seller will furnish to the purchaser of each Unit such documents and evidence including a plan as the Keeper of the Registers of Scotland may require to enable (1) the Keeper to issue a Land Certificate in the name of that purchaser as the registered proprietor of the house or (2) that purchaser's interest to be registered as aforesaid in the Land Register and in either case containing no exclusion of indemnity in terms of Section 12(2) of the Land Registration (Scotland) Act 1979.

Other Grants

12. In the event of the Grant Recipient receiving, or being entitled to receive, any other monies for the Project not disclosed by the Grant Recipient to the Grant Provider at the time of the Grant application the Grant Recipient will disclose the nature and the amount of the other such monies to the Grant Provider within seven days of being advised that it is to receive, or is entitled to receive, other such monies, and the Grant Provider will then be entitled at its sole discretion to:

(i) reduce the amount of the Grant then unpaid by such sum as the Grant Provider reasonably considers appropriate; or

(ii) require repayment of any Grant then paid up to the full amount of the Grant.

Default of Grant Recipient

13. The Grant Recipient shall not be, or be deemed for the purpose of any law to be, unable to pay its debts as they fall due.

14. The Grant Recipient shall not be insolvent nor apparently insolvent, nor admit inability to pay its debts as they fall due and an insolvency practitioner, administrative receiver, receiver or liquidator or administrator shall not be appointed to the Grant Recipient or in respect of any of its assets, and steps shall not be taken to appoint any of the foregoing.

15. The Grant Recipient will not assign its rights or obligations in respect of the Grant or any part of it to any other party without the prior written consent of the Grant Provider.

16. The Grant Recipient shall not be wound up, struck off or dissolved, other than for the purpose of restructuring of the Grant Recipient for trading purposes.

17. The Grant Recipient shall not cease or threaten to cease operating or trading.

18. There shall be no legal diligence or execution affecting any material asset of the Grant Recipient required for the Project.

19. The Grant Recipient shall not provide false or misleading information to the Grant Provider or omit to provide information that has been requested.

News releases

20. The Grant Provider reserves the right to issue any news release or other public information about the Grant and/or the Project including the right to erect a signboard at the Project.

Supersession

21. The terms of the Offer, and the contract following thereon, will remain in full force and effect insofar as they relate to any matter referred to herein which has not been implemented or on which the Grant Provider has not been fully satisfied, and that notwithstanding delivery of any of the Shared Equity Documentation or that such matter has not been referred to therein.

VAT

22. The payment of the Grant by the Grant Provider to the Grant Recipient will be inclusive of all, if any, Value Added Tax payable thereon. The payment of any sum of money or other consideration by the Grant Recipient to the Grant Provider arising from the contract, any Standard Security and Deed of Variation of Conditions will be exclusive of all Value Added Tax payable thereon. The Grant Recipient will also be required to pay or keep the Grant Provider indemnified against all Value Added Tax relating to such sum of money or other consideration. References in the contract to Value Added Tax will include any other tax replacing or supplementing the same.

Notices

23. Any notice given under the terms of the Offer is effectively given if it is posted to either the Grant Provider or the Grant Recipient at their address as shown in the Offer, or if the Grant Recipient is a company and its registered office is not in the United Kingdom, at the address of the Subjects and such Notice will be deemed to have been served two working days after it has been posted.

Proper Law

24. The contract will be construed and regulated according to the Law of Scotland.

Severance

25. All the provisions of the contract are severable and distinct from one another, and if one or more of such provisions becomes invalid, illegal or unenforceable the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired.

Liability of Grant Recipient

26. Where the Grant Recipient comprises more than one person the obligations hereunder will be joint and several.

Consent to Registration

27. The Grant Provider and the Grant Recipient consent to registration of the contract for preservation and execution.

……………………………………………

On behalf of the Grant Provider

…………………………………………….

On behalf of the Grant Recipient

SCHEDULE

PART 2

APPROVED COSTS

(Itemise the Approved Costs on which this Offer is based, e.g. acquisition, works, professional fees, site investigation costs, feasibility study costs, VAT, allowances, legal fees, capitalised interest and third party warranty costs.)

SCHEDULE

PART 3

PROJECT, GRANT ALLOCATION BY YEAR AND FUNDING BREAKDOWN

1. NEW SUPPLY SHARED EQUITY PROJECT APPROVED BY THE GRANT PROVIDER

together with the sale of the same in accordance with the Shared Equity Procedures.

2. GRANT ALLOCATION BY YEAR APPROVED BY THE GRANT PROVIDER

* Please note that these are merely planning assumptions at this stage and therefore may be subject to change.

3. FUNDING BREAKDOWN APPROVED BY THE GRANT PROVIDER

Total Approved Costs:	£
Sales income:	£
Grant:	£
Other public subsidy: [if applicable]	£