There are broadly two different approaches to providing affordable homes through a CLT:
Option 1- the CLT
Takes on all the risks and responsibilities itself
Receives the full income from the properties
Option 2 – the CLT
Works in partnership with a Housing Association
Takes very little risk
Leads the project
Owns the land and receives a ground rent. (125 year lease)
Leads on the search for a site
Consults with the wider community
Selects a suitable Housing Association
Obtains a grant to prepare a planning application
Is a party to the Section 106 Agreement (which governs the allocation of homes to local people)
Verifies the stated local connection of potential residents.
The Housing Association take all the risks and responsibilities involved in developing, financing and managing the scheme
The CLT has an option to buy the Housing Association out of its lease at some point in the future; for instance, if it wished to benefit from the full rental income (in place of the ground rent) and could raise the necessary funds.