New Scottish merger rules in place this month

In Scotland, an arrangement that would be commonly known as a merger is officially called a ‘group structure’ or ‘constitutional partnership’, in cases where the subsidiary landlord retains its name and chief executive.

Currently when an association wants to become a subsidiary in a group structure arrangement, a landlord is only required to ballot the members of an association. Tenants can become members of an association by paying a small fee such as £1.

Under the new legislation, which comes into force on 20 November 2014, landlords will be required to ballot their tenants before they become subsidiaries in group structures.

The Glasgow and West of Scotland Forum of Housing Association lobbied hard to MSPs for the measure to be inserted into the Housing (Scotland) Act 2014, which received Royal Assent in August.

The government agreed to insert the measure into the Act following concern about the trend of larger landlords taking over smaller, community-based housing associations.

Social landlords that have asked for permission from the Scottish Housing Regulator to enter into a group structure before 20 November will be exempt from the new requirements.

A statement from the regulator said: ‘We have communicated this position directly to the RSLs which we know may be affected by this provision.’