December is almost upon us but, for developers, house builders and Registered Providers, there's the prospect of a different sort of "Santa Clause" arriving - the moratorium period common in housing association residential development agreements, which carves out a period over the Christmas break from standard notice and handover processes. They vary in length according to client and developer, but often straddle the period from a week prior to Christmas through to the first or second week of January. These clauses typically do two things - they prevent completion notices from being served during that time and, if notices have been served which would otherwise run in that period, then those notices are suspended until the moratorium period has expired.
Practically speaking, Santa Clauses are a good idea. Developers know that they aren't going to have to resource handovers through the Christmas period, and Registered Providers know that they aren't going to bring void stock into management at that time too. It gives everyone involved in the process a chance to stop, and not have to run round transferring funds and organising key releases when banking hours and working days are irregular.
However, this tends to mean that build programs and handover dates get compressed in late November/early December, as developers try to accelerate handovers before the Santa Clause period in late December. For Registered Providers managing numerous handovers, possibly from various developers, on different contract terms, this can become a real headache to resource and manage. Signatories may not always be available, funds drawdown can sometimes be problematic with cashflow limits on releases clashing with additional completions, and the staffing levels required to manage additional (possibly unanticipated) handovers from developers and to pass those over to internal housing and finance teams can be stressful. It's often the case that housebuilders may try to load a few units more into December, to make for a good finish to the year and to get stock off their books and onto Registered Providers'.
Clearly, goodwill is an important thing in any developer/client relationship, and we have all seen cases where Registered Providers agree to take additional units in December, sometimes less than fully finished, to "help out" their developer. That's fine - although sometimes, on larger sites, or with established contractor/client relationships, it can feel more like the norm and I've seen larger schemes where this happens every Christmas. So, for Registered Providers, just a few thoughts to help preserve festive cheer:
a) Do you know what your overall delivery program, across all of your sites, is forecasting for December/January? Make sure your overall program is plotted out, by site and maybe by developer, so that you can see where delivery stresses might arise, and how different positions with the same developer can be managed consistently.
b) You may have different schemes running with different developers, with different Santa Clauses - have you identified when your lock-out periods start and, working back from those dates, can you identify when the pressure points for service of completion notices will arise?
c) Use your employer's agents or in-house site managers - they are your boots on the ground, and they ought to be flagging to your development and housing teams when handovers are coming, and whether additional units are coming forward sooner than expected.
d) Development, finance and housing teams need to work together, to make sure that everyone knows what's on the horizon, that working capital is freed up for completions, and that tenants and buyers are lined up for stock due for completion.
No system is perfect but, with a little bit of foresight and co-ordination, the stresses can be managed and mitigated, and unwelcome surprises managed out. Here's to a great finish to the year!