The Control of Housing and Work (Jersey) Law 201- (the "New Law") was approved by the States of Jersey on 5 July 2011 and is due to come into force during 2012. This briefing analyses certain key aspects of the New Law.
The Welcome Changes
One Law only: the New Law replaces both the existing Housing (Jersey) Law 1949 and the Regulation of Undertakings (Jersey) Law 1973. This is widely considered to be a positive step for the jurisdiction as the Housing Law has been changed so many times over the years that it is now unwieldy and difficult to understand, while the Regulation of Undertakings Law is too vague and it is often difficult to ascertain whether a business needs a licence, without seeking guidance from the Population Office or searching through a myriad of policy documents. For new business applications the two laws have been merged in practice by the regulatory authorities for many years. Applications are made to the same office (just different officers) for a Regulation of Undertakings licence for the business and for a J Category Housing consent for any new senior employee.
Essential Employees and Housing:the New Law introduces some welcome changes to the procedures governing buying and renting property for essential employees (currently known as "J category" and to be known as "Licensed" under the New Law). Under the current law, an essential employee cannot rent or buy in their own name, they have to rent through their employer and buy in the name of a company they incorporate and continue to own until they gain Housing qualifications after 10 years residence - then the property has to be transferred into their own name. All of this cumbersome procedure is being abolished by the New Law, whereby a Licensed person will be able to buy or rent directly in their own name.
Regulation of Undertakings:the New Law removes the current requirement for businesses to have to apply to the Population Office to employ individuals with at least 5 years or more continuous residence in the Island. In future, consent will only be required to employ individuals with less than 5 years residence.
Housing consents for Property transactions:except for transactions by companies and certain other bodies, the New Law abolishes the need to apply for the consent of the Housing Minister for all purchases and leases. On each property transaction the purchaser will need to produce to their lawyer a valid registration card confirming their Housing qualifications (they may need to have it validated in advance by the Population Office in certain circumstances).
Enforcement:the New Law does grant to the regulators strong enforcementpowers which do not currently exist in relation to Business Licences (the New Law term for a Regulation of Undertakings Licence). These include the power to revoke a licence in the event that the business does not operate in the manner envisaged in the application for the licence. These powers are no stronger than those in place for financial services businesses under the Financial Services (Jersey) Law 1998 but one could argue that there is an element of duplication of regulation for these businesses because they are already closely regulated by the financial services regulator.
Change of Control:Undercurrent policy, most new businesses established since in or after 2000 have had a "change of control" restriction on the business, that is to say they must seek the consent of the regulator to any change in ownership. Many businesses which existed before that time, do not have this restriction on their licence. The New Law puts all businesses on an equal footing and creates a specific (and quite complicated) set of rules for change of control. The basic principle behind the rules is that if a business is locally owned, it will not need consent to sell provided that the local ownership doesn't fall below 60%. Non-locally owned businesses will need consent for the first onward sale but not thereafter. The regulators believe that this new system gives businesses more freedom as regards ownership changes, not less.
Businesses prior to 1973:A business which operated before 1973 (when the Regulation of Undertakings Law came into force) will not necessarily have a written Regulation of Undertakings licence. In 1973 businesses were deemed to have the licence without the need to obtain it in writing. This will not be the case when the New Law comes into force as those businesses will need to apply for a written licence, which will hopefully be issued as a formality.
The New Law does have certain positive aspects both for individuals and businesses alike. There are, however, some cumbersome regulatory aspects being implemented and furthermore businesses will need to be careful on change of control. The devil will be in the detail and how, in practice, the Population Office implements the New Law.
This briefing is dated July 2011. For further information or advice on the New Law please contact Wendy Lambert, Partner and Head of Property or Helen Ruelle, Managing Associate and Head of Employment.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.