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All TIEd up – top tips for mergers and consulting tenants

By Michelle Hallmark
July 31, 2017

Blink and you might have missed it, but last month the Homes and Communities Agency published its decision on amendments to the snappily titled Tenant Involvement and Empowerment Standard (TIE).

In return of being freed of the shackles of requiring the regulator’s consent for merger, the disposal of stock and other constitutional changes, the TIE review was designed to protect a tenant’s right to influence.

The verdict of some eight weeks of consultation, 156 responses, a 24-page report and a four-month plus wait for the consultation outcome is…a couple of wording tweaks. I said not to blink…

In summary, the changes mainly affect those looking to change a tenant’s landlord. The principles of good consultation are now down in (tracked changed and red) writing. Fair, appropriate and timely seems a bare minimum for not bearing the brunt of regulator consent.

Business as usual pretty much but paragraph 2.2.3 is where things get a little trickier for those preparing business cases and consultation process for customers. This states a need to:

  • set out the proposals clearly
  • use an appropriate amount of detail
  • set out any actual or potential advantages and disadvantages (including costs) to tenants in the immediate and longer term.

The main change from the original wording that went out to consultation is the replacement of the requirement to set out short, medium and long term actual and potential advantages and disadvantages with the words immediate and longer term actual and potential advantages. A small change, but a big difference in ensuring no overload of information or an unrealistic expectation on future gazing before all due diligence work is completed.

The other tweak within the paragraph is that ‘providers must be able to demonstrate to affected tenants how they have taken the outcome of the consultation into account when reaching a decision. The addition of the word ‘affected’ being to potentially clarify that the views of wider residents and future tenants don’t need to be taken into account in any decision.

So what does this mean for those of leading merger considerations? For most, it’s as you were. Six immediate continued best practice thoughts are to:

  1. Decide early on what you mean by immediate and longer term. Three months, one year. Narrow down and make clear how long the TIE’s piece of string gambit is.
  2. Ensure every affected tenant receives the information. Have the data that tells you the language preference and requirement on Braille, large print, audio or other formats that make what you are saying accessible to all. Consider film or animation as a way to get across quickly the advantages or disadvantages.
  3. Don’t hide from the numbers. Mergers (in the immediate at least) cost money to make happen. An analogy we recently used to get this across was the fee you might pay to exit a mobile phone contract. So if you pay £60 to get out of a 24-month contract three months early in order to reduce your monthly bills by £25 a month, then you soon reap the financial benefit. Short term pain, long term gain.
  4. Not sure how long the consultation should last? Well, as the HCA opened their consultation on TIE for six weeks (42 days) that might be as big as a hint you are going to get. Check out what others have done in the list below.
  5. To ensure consultation is fair, appropriate and timely, provide many options to get involved. Email, Facebook live, web form, events, Freepost form….and don’t forget to tell people how many people fed back, what they said and how the board took that into account when making a decision.
  6. Ask tenants what they think is fair, timely and appropriate. Those of us who remember weighty offer documents and stock transfer votes will also remember the process of Independent Tenant Advisor sign off. The best evidence that what you’ve done meets the standard is the fact you’ve had affected tenants devise the process.

Check out more detail and remind yourself of annual report requirements given it’s that season again here.

All tied up - table