Consolidation Act on Social Housing, etc.

74.-(1) Instead of granting a loan pursuant to section 54(3) of the Act on Individual Housing Benefits, the local authority may grant an amount to cover the lease premium mentioned in section 118(1) hereof, when a tenant in a rental property being converted into social dwellings for the elderly already lives in the converted dwelling.

(2) The local authority shall grant an amount to cover the lease premium mentioned in subsection (1) above to

(i)                         residents in nursing homes or in sheltered housing which is closed down or converted into social                              dwellings for the elderly, when the residents are rehoused in social dwellings for the elderly; and

(ii)                        residents who are referred from nursing homes or sheltered housing to social dwellings for the elderly.

(3) The regional or local authority shall grant an amount to cover the lease premium mentioned in section 118(2) hereof to

(i)                         residents in an institution built in pursuance of section 112 of the former Social Assistance Act, section                 92 of the former Act on Social Services and section 108 of the Act on Social Services which is closed         down or converted into regional social dwellings for the elderly, when the residents are rehoused in      social dwellings for the elderly; and

(ii)                        residents who are referred from an institution built pursuant to section 112 of the former Social   Assistance Act, section 92 of the former Act on Social Services and section 108 of the Act on Social          Services to social dwellings for the elderly.

(4) The amounts mentioned in subsections (1), (2) and (3) above shall be paid to the landlord. At the end of the tenancy, the landlord shall repay the amount to the local or regional authority less any set-off effected under the rules of Part IX of the Act on the Rent of Social Dwellings.

(5) Of the local or regional authority’s payments pursuant to subsection (4), first sentence, two thirds shall be reimbursed to the local or regional authority by central government. The local or regional authority shall pay to central government the amounts received in pursuance of subsection (4), second sentence, but not exceeding an amount corresponding to the central government reimbursement pursuant to the first sentence.

(6) The provision of section 73(1), first sentence, shall apply correspondingly to social dwellings intended for the elderly and owned by a local or regional authority.

(7) The provisions of section 68 and section 73(1), first sentence, shall apply correspondingly to independent social dwellings for young people and for the elderly.

75. The Minister for the Interior and Social Affairs may lay down specific rules governing the matters mentioned in sections 68, 73 and 74, including rules on the allocation of government reimbursement, financial reporting and audit concerning the amounts mentioned in section 74.

PART V A

Sale of social family dwellings as owner-occupied dwellings

Experiments with sale

75 a.-(1) The Minister for the Interior and Social Affairs may upon application from the local council approve experiments with the sale of social family dwellings in the local authority area to social tenants of the dwellings.

(2) In connection with applications for approval, the local council shall state the extent to which divisions in the local authority area are included in the experiment. The local council shall publish the scope of the experiment. Subsequent changes in the scope of the experiment shall be approved by the Minister for the Interior and Social Affairs.

(3) The divisional meeting shall decide whether social tenants in dwellings included in the experiment under subsection (2) above may buy their family dwellings. The decision of the divisional meeting cannot be changed at a later time.

(4) The Minister for the Interior and Social Affairs shall lay down specific rules governing the application for and approval of experiments pursuant to this provision.

75 b.-(1) The Minister for the Interior and Social Affairs may upon application from a housing organisation approve experiments with the sale of social family dwellings in the divisions of the housing organisation to social tenants of the dwellings.

(2) In connection with applications for approval, the housing organisation shall state the extent to which divisions of the housing organisation are included in the experiment. The housing organisation shall publish the scope of the experiment. Subsequent changes in the scope of the experiment shall be approved by the Minister for the Interior and Social Affairs.

(3) The inclusion in the experiment of the following family dwellings shall be subject to approval by the local council:

(i)                         Dwellings in which a shared housing arrangement has been established pursuant to section 3(2),                        section 51(3) or section 51 a(1) hereof.

(ii)                        Dwellings which at the time of the commitment to granting public subsidies were formerly reserved for                  elderly and disabled persons, or which have been designed and built for this group with public subsidies                          under the Social Assistance Act; cf. section 51(4) hereof.

(iii)                       Dwellings with a gross floor area larger than 110 m2 built with a view to letting to households with at                      least four members, of which at least one member has severe physical disabilities; cf. section 109(5)        hereof.

(iv)                        Dwellings that have received subsidies pursuant to section 142 b.

(4) The divisional meeting shall decide whether social tenants in dwellings included in the experiment under subsection (2) above may buy their family dwelling. The decision of the divisional meeting cannot be changed at a later time.

(5) Where experiments have been initiated in a local authority area upon application from a housing organisation, the local council may stop all sales in the local authority area when a total of more than five per cent of the social family dwellings in use in the local authority area on 1 January 2005 have been sold. An order to stop the sale implies that no further registration periods can be started in the local authority area; cf. section 75 j(1) hereof. In divisions in which a registration period has commenced, the sale shall be implemented.

(6) The Minister for the Interior and Social Affairs shall lay down specific rules governing the application for and approval of experiments pursuant to this provision.

75 c.-(1) The Minister for the Interior and Social Affairs may, on joint application from the local council and a housing organisation, approve, to the extent that experiments have been approved pursuant to section 75 a or section 75 b hereof, the sale of vacant dwellings, but not more than one third of the family dwellings in a division.

(2) In connection with applications under subsection (1) above, the local council and the housing organisation shall state the extent to which vacant dwellings can be sold and the extent to which the application concerns sale in troubled divisions; cf. subsection (3) below and section 75 k(2). The housing organisation shall publish the scope of the sale of vacant dwellings. Subsequent changes in the scope of the experiment shall be approved by the Minister for the Interior and Social Affairs.

(3) A troubled division means a division in which substantial problems of a financial, social or other nature have been found, including high rent, high rate of turnover, large share of tenants with social problems, violence, vandalism or run-down buildings and open spaces.

(4) The divisional meeting shall decide whether vacant dwellings can be sold. This is subject to the condition that before or concurrently with the said decision, the divisional meeting shall make a decision pursuant to section 75 a(3) or section 75 b(4) hereof. The decision of the divisional meeting cannot be changed at a later time.

(5) The Minister for the Interior and Social Affairs shall lay down specific rules governing the application for and approval of experiments pursuant to this provision.

Sale in troubled divisions

75 d.-(1) Upon the joint application by the local council and a housing organisation, the Minister for the Interior and Social Affairs may approve the sale of social family dwellings in the housing organisation’s troubled divisions in the local authority area; cf. section 75 c(3). The application may be for the sale to social tenants of the dwellings and for the sale of vacant dwellings. Approval of the sale of vacant dwellings shall be subject to the simultaneous approval of sale of dwellings to the tenants.

(2) In the application pursuant to subsection (1) above, the local council and the housing organisation shall state the extent to which the housing organisation’s divisions are covered by the sale and the extent to which vacant dwellings can be sold. The housing organisation shall publish the scope of the sale. The Minister for the Interior and Social Affairs shall approve subsequent changes to the scope of the sale.

(3) On the basis of an assessment of the composition of residents in the division, the local council and the housing organisation may lay down criteria governing to whom the dwellings may be sold. The Ministry of the Interior and Social Affairs must be informed of the agreed criteria.

(4) The divisional meeting shall decide whether dwellings covered by the approval pursuant to subsection (1) above can be sold. The decision of the divisional meeting cannot be changed at a later time. The divisional meeting shall approve criteria agreed pursuant to subsection (3) above and subsequent changes thereto.

(5) The local council and the housing organisation may jointly apply for approval pursuant to subsection (1) above of sales previously approved pursuant to sections 75 a-c. Such approval will have effect for sales carried out after the first registration period after the approval and for the first sale of a vacant dwelling after the approval.

(6) The Minister for the Interior and Social Affairs shall lay down specific rules governing the application for and approval of sales pursuant to this provision.

Stopping sales

75 e. The Minister for the Interior and Social Affairs may order the housing organisations to stop sales under this Part in whole or in part if sales in a division imply or are expected to imply substantial, negative net proceeds. An order to stop the sale implies that the housing organisation cannot commence further registration periods. If the registration period has commenced, the sale may be implemented. In the assessment of whether the sale should be stopped, importance shall be attached to the amount of the net proceeds and to whether the sale forms part of holistic efforts to turn around troubled divisions as defined in section 75 c(3) hereof.

Terms for and the implementation of the sale

75 f. A division may be included in a sale if for a total of 15 years the majority of family dwellings in the division have functioned as one or more of the housing types mentioned in (i)-(iii) below:

(i)                         social dwellings;

(ii)                        non-profit dwellings; or

(iii)                       other dwellings built with subsidies under the construction subsidy, residential hall subsidy or housing                              construction legislation or the former Act on Housing for Elderly and Disabled Persons; cf. Consolidation              Act No. 664 of 8 August 2002 as amended by section 76 of Act No. 145 of 25 March 2002 and section 5 of Act No. 1219 of 27 December 2003.

75 g. The tenant’s option to buy his social family dwelling under this Part shall arise at the commencement of the tenancy and shall lapse at the termination or cancellation of the tenancy agreement.

75 h.-(1) When the divisional meeting has made a decision pursuant to section 75 a(3), 75 b(4) or 75 d(4) hereof, the governing board of the housing organisation shall without undue delay

(i)                         prepare bylaws for a future owners’ association or homeowners’ association;

(ii)                        fix the cost allocation percentage for future owner-occupied flats;

(iii)                       inform the tenants of an estimate of the value of the dwellings on the basis of normative figures set out in             the Central Customs and Tax Administration’s valuation models from the most recent general valuation;                     and

(iv)                        determine the annual registration period; cf. section 75 j(1) hereof.

(2)The governing board shall inform the tenants of a current estimate of the value of the dwellings every time the normative figures change; cf. subsection (1)(iii) above.

(3) The divisional meeting and the local council shall approve bylaws and cost allocation percentage. As long as the division is covered by an owners’ association established in connection with sales under this Part, the local council shall approve subsequent amendments to the bylaws. Any disputes between the governing board and the divisional board or the divisional meeting on bylaws and cost allocation percentage shall be settled by the local council in connection with its approval.

75 i. The governing board of the housing organisation shall without undue delay ensure sound implementation of the sale.

75 j.-(1) The housing organisation shall for each division fix an annual registration period of one month. Before the expiry of the said period, tenants who wish to buy their dwellings shall inform the housing organisation thereof in writing. The housing organisation shall not fix a registration period which expires after 31 December 2009; but see subsection (2) below.

(2) Subsection (1), last sentence, shall not apply to sales approved pursuant to section 75 d(1).

(3 The housing organisation shall also fix a common date of completion applying to tenants who have notified the organisation before the expiry of the registration period and have decided to buy. In very special cases where the sale cannot be implemented on or before the fixed date of completion, the housing organisation and the tenant may agree on another date of completion.

75 k.-(1) A vacant dwelling, cf. sections 75 c and 75 d hereof, may be put up for sale if the dwelling

(i)                         shall not be made available for local authority allocation pursuant to section 59(1) or (2) hereof;

(ii)                        is not covered by an agreement on letting for the purpose of temporary rehousing pursuant to section                    51(6) hereof; or

(iii)                       cannot be let pursuant to section 51(1), section 51 a(1) or section 60 hereof to persons who were                              registered as applicants to the relevant dwelling at the time the tenancy agreement was terminated or                              cancelled; but see subsection (6) below.

(2) Where the Minister for the Interior and Social Affairs has approved the sale of vacant dwellings in troubled divisions pursuant to section 75 c hereof, up to 90 per cent of the vacant dwellings in the division may be put up for sale without attempts at re-letting being made under the provisions of subsection (1)(iii) above.

(3) In the period in which the dwelling is put up for sale, it shall not be let.

(4) Any loss of rent in the period from the dwelling is put up for sale until it is taken over by the buyer or re-let, which is not covered by the purchase price, cf. section 75 s(2)(xi), or by the National Building Fund, cf. section 96 m(1)(iii), shall be covered by the housing organisation’s liquid reserve fund.

(5) In the event of the sale of vacant dwellings, the purchase agreement shall have been made on or before 31 December 2009; but see subsection (6) below.

(6) Subsection (1)(iii) and (5) shall not apply to the sale of vacant dwellings approved pursuant to section 75 d(1) hereof.

75 l.-(1) Where no budget exists for the owners’ association by which the dwelling will be covered after the sale, the housing organisation shall before initiating the division into owner-occupied flats prepare a draft budget for the future owners’ association when one or more tenants have informed the housing organisation before the expiry of the registration period that they wish to buy their dwellings, or when it is decided to put up a vacant dwelling for sale.

(2) Before initiating a cadastral division, the housing organisation shall inform the buyers of the expected subscription to a homeowners’ association when one or more tenants have informed the housing organisation before the expiry of the registration period that they wish to buy their dwellings, or when it is decided to put a vacant dwelling up for sale.

75 m.-(1) Where housing is divided into owner-occupied flats in connection with sales under this Part, the housing division’s common areas and common facilities shall be designated as joint property. Where special circumstances prevail, the local council may approve the designation of common areas and common facilities as separate property.

(2) In connection with parcelling out, the housing organisation shall decide, with the local council’s approval, the extent to which common areas and common facilities shall be transferred to a homeowners’ association which comprises only dwellings covered by the housing division at the time of the first sale under this Part. Where common areas and common facilities are transferred to a homeowners’ association, such transfer shall be free of charge for the homeowners’ association. The subscription to the homeowners’ association shall be fixed so as to ensure that the homeowners' association is able to pay the expenses related to the operation of the areas and facilities transferred.

(3) The housing organisation shall have a declaration registered on the property of the homeowners' association to the effect that property transferred pursuant to subsection (2) above shall not be mortgaged and that any sale of the property shall be subject to the approval of the local council as long as the division is a member of the homeowners’ association. The housing organisation shall also have a declaration registered on the property of the homeowners’ association to the effect that when the homeowners’ association resell property transferred pursuant to subsection (2) above, the sales proceeds shall be paid pro rata to the members of the homeowners’ association.

(4) The housing organisation shall have a declaration registered on the property to which the remaining division has title and on the dwellings to be sold to the effect that buyers have a duty to be members of the homeowners’ association and that the right to common areas and common facilities is a right of use only.

(5) The declarations mentioned in subsections (3) and (4) above shall be made non-terminable, the local council being entitled to take legal action.

(6) The National Building Fund, the Building Defects Fund, the liquid reserve fund and the local authority may grant subsidies to the division’s expenses for the common areas or the common facilities to the same extent as if the areas or facilities belonged to the division.

75 n.-(1) The individual dwelling shall be sold at the market price as an owner-occupied dwelling.

(2) The market price shall be fixed by a valuation made by an estate agent who is an appraiser. But the first dwelling in the division shall be valued jointly by two estate agents who are appraisers. The appraisers shall be appointed by the local council following a call for tenders.

(3) The appraiser shall make the valuation on the basis of the commercial value when the purchase price is to be paid in cash. The valuation shall disregard the fact that the buyer is entitled to an interest- and amortisation-free loan; cf. section 75 r.

(4) Where a tenant who has had his dwelling appraised does not take over the dwelling on the completion date, cf. section 75 j(3), the tenant shall pay 50 per cent of the cost of the valuation of the tenant’s dwelling. Where the valuation is made by two estate agents who are appraisers, cf. subsection (2) above, second sentence, the tenant shall pay 25 per cent of the cost. Before division or parcelling out and valuation are initiated, the tenant shall provide security for his share of the cost of the valuation. Where the valuation exceeds the value stated pursuant to section 75 h(1)(iii) or section 75 h(2) hereof by more than 20 per cent, the housing division shall pay the entire cost of the appraisers.

75 o.-(1) Where the tenant has improved the premises under Part VIII of the Act on the Rent of Social Dwellings, the housing organisation shall, before entering into the purchase agreement, calculate the reimbursement to which the tenant would have been entitled if the tenancy ceased on the date of completion. The housing organisation shall send the statement to the tenant reasonably in advance of the time the purchase agreement is expected to be entered into.

(2) The amount of reimbursement shall be paid to the tenant on or before the date of completion.

75 p.-(1) Reasonably in advance of the time the purchase agreement is expected to be entered into, an inspection of the dwelling shall be conducted with a view to determining whether the tenant has failed to maintain it; cf. section 25(4) of the Act on the Rent of Social Dwellings. The tenant shall be convened in writing at not less than one week’s notice. If the dwelling is poorly maintained, a statement shall be prepared as soon as possible after the inspection, containing information on the nature of the lack of maintenance and information on the estimated cost of repairing the damage. The statement shall be sent forthwith to the tenant.

(2) The tenant shall pay the amount of the estimated cost of repairing the damage on or before the date of completion.

75 q.-(1) The division’s loans shall be repaid proportionately according to rules to be laid down by the Minister for the Interior and Social Affairs.

(2) In connection with the repayment, the borrower’s payment shall be reduced with effect from the date of completion by an amount corresponding to the borrower’s payment on the part of the loan which has been repaid. The borrower’s payment shall subsequently be adjusted as before. Where a loan is finally amortised in the period between the date of completion and the repayment, the borrower’s payment on such loan shall be reduced correspondingly until the final amortisation. Similarly, the liquid funds which form part of the liquid reserve fund pursuant to section 20(1)(iv) and (vi)-(viii) shall be reduced with effect from the date of final amortisation of the loan.

(3) In connection with the repayment, the current subsidies shall be adjusted with effect from the date of completion, so that the subsidies represent an amount corresponding to the difference between the borrower’s payment and the principal and interest payments on the loan. Where a loan is finally amortised in the period between the date of completion and the date of repayment, the subsidies for such loan shall be adjusted correspondingly until the final amortisation.

(4) The housing organisation shall assess the need for repayment, including what loans shall be repaid pursuant to subsection (1) above. The statement shall be submitted to The Danish Agency for Governmental Management for approval before the repayment.

(5) In respect of non-callable mortgage loans where, as determined by the Minister for the Interior and Social Affairs, no bonds are bought for part repayment of the loan, central government shall enter into the payment obligation for the part of the bonds which corresponds to the part repayment and shall also take over the related secured debt in return for central government’s receiving an amount which corresponds to the debt at a redemption price fixed by the Minister for the Interior and Social Affairs. The bonds may subsequently be bought as determined by the Minister for the Interior and Social Affairs. Section 9 of the Mortgage Loans and Mortgage Bonds Act shall apply correspondingly.

(6) Government guarantees, local authority guarantees and all counter guarantees shall be confirmed. Confirmation shall be obtained on repayment or subsequently.

(7) The local council shall guarantee the part of the outstanding debt on existing mortgage loans which, after the proportionate repayment, is secured by a mortgage exceeding 80 per cent of the value of the property. The part of the outstanding debt not covered by the guarantee shall be secured by a mortgage with priority over the guaranteed part of the outstanding debt.

(8) The Minister for the Interior and Social Affairs shall lay down rules providing that the local council shall deposit amounts corresponding to the part of the local authority basic capital which is repaid to the local authority upon repayment of basic capital loans pursuant to subsection (1) above, as well as rules governing the release of the amount deposited.

Interest- and amortisation-free loans

75 r.-(1) A tenant who buys his social dwelling under this Part may obtain an interest- and amortisation-free loan from the National Building Fund of 30 per cent of the price; cf. section 75 n hereof. Where several tenants buy the dwelling in co-ownership, or where the tenant buys his dwelling in co-ownership with other persons who are co-habiting with the tenant, the buyers may obtain the loan jointly. The buyer shall pay a fee as mentioned in section 96 l(3) hereof.

(2) The loan shall fall due for repayment when the former tenant vacates the dwelling, unless the former tenant’s spouse or persons who have been co-habiting with the former tenant for at least two years remain in the purchased dwelling.

(3) The loan shall also fall due for repayment on change of ownership in whole or in part. The former tenant may, when taking over a co-owner’s share of the dwelling, take over a proportionate part of the loan. The former tenant’s spouse or persons who have been co-habiting with the former tenant for at least two years may, upon take-over of the former tenant’s share of the dwelling, take over a proportional part of the loan. Where the former tenant has bought the dwelling in co-ownership with his or her spouse or another person who has been co-habiting with the former tenant for at least two years, and where the former tenant transfers his or her part of the dwelling to another person, only the former tenant’s share of the loan shall fall due.

(4) The loan shall bear interest from the due date at a rate of interest fixed pursuant to section 5(1) and (2) of the Interest Act.

Statement and application of net proceeds, etc.

75 s.-(1) The net proceeds of sales under this Part shall be calculated as the purchase price fixed pursuant to section 75 n hereof less amounts mentioned in subsection (2) below and plus amounts mentioned in subsection (3) below.

(2) The following amounts shall be deducted from the purchase price:

(i)                         repayment of lease premiums;

(ii)                        proportionate repayment of the division’s loans;

(iii)                       fees and charges connected with release and repayment of the housing division’s loans as well as                              recalculation of subsidies;

(iv)                        costs of parcelling out and expenses for division which can be related to the dwellings sold;

(v)                         costs of valuation;

(vi)                        payment to the housing division of the proportionate share of an accumulated operating deficit of the                              dwellings sold;

(vii)                       reimbursement for the tenant’s improvements of the premises;

(viii)                      expenses for energy labelling and energy plan;

(ix)                        costs of preparing a purchase agreement;

(x)                         the housing organisation’s administrative expenses connected with the sale;

(xi)                        loss of rent corresponding to a maximum of six months’ rent in connection with the sale of vacant                              dwellings;

(xii)                       principal and interest payments from the date of completion to the date of repayment on the part of the                   loans being repaid;

(xiii)                      repayment of subsidies received in the period from the date of completion to the date of repayment; and

(xiv)                      other expenses connected with the sale, including the housing division’s costs of bridge financing and                 other outlays.

(3) The following amounts shall be added to the purchase price:

(i)                         the compensation paid by the tenant for lack of maintenance;

(ii)                        the part of the division’s allocations to reserves at the time of completion for periodic renewal and repair               which corresponds to the proportionate share of the dwellings sold;

(iii)                       the part of the division’s allocations to reserves for interior maintenance which corresponds to the                              proportionate share of the dwellings sold;

(iv)                        income connected with the sale, including interest payment on the deposited purchase price.

(4) Five per cent of the net proceeds, but not less than DKK 3,000 and not more than DKK 10,000 per dwelling sold, shall be paid to the owners’ association by which the dwellings sold are covered. Where the dwellings sold are not covered by an owners’ association, the amount shall be paid to a homeowners’ association which covers only dwellings covered by the housing division at the time of the first sale under this Part.

(5) The net proceeds less amounts paid pursuant to subsection (4) above shall be paid to the National Building Fund; but see subsection (6) below.

(6) In the event of a sale pursuant to section 75 d, the National Building Fund may upon application by the local council and the housing organisation approve that the net proceeds pursuant to subsection (5) is not paid in part or in full. A contribution to cover the expenses mentioned in section 89 c(3)-(5) and sections 96 l and 96 m is excepted from the above provision. It is a condition that the proceeds not paid shall be used by the housing organisation for activities and initiatives in the organisation’s divisions covered by an approved overall plan for the area in which the division where dwellings have been sold is located. The Fund may give its approval in advance for the use of net proceeds pursuant to this provision, before the local council and the housing organisation apply for approval pursuant to section 75 d(1) hereof. The Fund shall send a copy of its decision to the Minister for the Interior and Social Affairs.

(7) Where the amounts mentioned in subsections (2) and (4) above exceed the purchase price plus amounts added pursuant to subsection (3) above, the difference shall be covered by the National Building Fund; cf. section 96 m(1)(v) hereof.

(8) The Minister for the Interior and Social Affairs shall lay down specific rules on the amounts mentioned in subsection (2) above, which are deducted from the purchase price, and the amounts mentioned in subsection (3) above, which are added to the purchase price.

75 t.-(1) Financial reporting for sales in the division under this Part and the audit thereof shall be made pursuant to rules to be laid down by the Minister for the Interior and Social Affairs.

(2) The audit shall be made by a state-authorised accountant or a registered accountant. The auditor’s comments shall be entered in the auditor’s records.

(3) The financial statements shall be approved by the local council. A copy of the financial statements shall be submitted to the National Building Fund.

75 u.-(1) Social housing organisations shall report sales under this Part to the National Building Fund.

(2) The local council shall on the basis of information from the housing organisations annually report status information on sales to the Minister for the Interior and Social Affairs under rules to be laid down by the Minister for the Interior and Social Affairs.

PART VI
The National Building Fund

Organisation, etc.

76.-(1) The National Building Fund is an independent institution, the objective of which is to promote the self-financing of social housing.

(2) The Fund shall be managed by a governing board consisting of nine members. The chairman of the governing board and four other members shall be elected by the National Federation of Housing Associations. Of the governing board’s four other members, the Danish Tenants’ Association shall elect two members who shall be occupants of social housing; Local Government Denmark shall elect one member; and the City of Copenhagen and the City of Frederiksberg shall jointly elect one member. Deputies for the chairman and the other members shall be elected according to the same rules. Members shall be elected for terms of four years and may serve more than one term.

(3) The governing board shall adopt rules governing the day-to-day management of the Fund’s affairs and shall lay down guidelines for the planning of the work. General directions and guidelines issued to investors and borrowers shall be approved by the governing board.

77.-(1) The bylaws of the Fund shall be approved by the Minister for the Interior and Social Affairs. They shall contain provisions ensuring sound planning of the Fund’s activities with a view to meeting its objective.

(2) Not later than four months after the end of each financial year, the Fund’s financial statements signed by the governing board and certified by the auditor shall be submitted to the Minister for the Interior and Social Affairs accompanied by the report of the governing board on the past financial year. The Minister for the Interior and Social Affairs may lay down detailed guidelines for the form and contents of the financial statements and report.

(3) The financial statements of the Fund shall be audited by a state-authorised accountant appointed by the Minister for the Interior and Social Affairs at the Fund’s recommendation. The Minister for the Interior and Social Affairs may lay down detailed guidelines for the exercise of the auditor’s activities.

(4) The Fund shall on demand give the Minister for the Interior and Social Affairs any information on the Fund’s activities, including on the governing board’s estimate of the extent of the Fund’s future lending activities and the amount of the expected loanable funds.

Revenues of the Fund

78.(-1) The funds of the Fund are generated by payments from the social housing organisations, independent institutions, local and regional authorities pursuant to sections 79-80 f hereof.

(2) Subject to the permission of the Minister for the Interior and Social Affairs, the Fund may obtain a government loan to cover the Fund’s expenses pursuant to section 98 a hereof.

(3) Subject to the permission of the Minister for the Interior and Social Affairs, the Fund may obtain a government loan to cover the Fund’s obligations pursuant to section 96 d(1) hereof.

(4) In years in which the Fund’s revenues cannot cover the Fund’s expenses pursuant to section 91(1), section 91 a(1) and (2), section 92(2) and section 92 a hereof, the Fund may with the approval of the Minister for the Interior and Social Affairs obtain loans to offset the difference. The Fund’s loans shall be repaid as soon as possible. Central government expenses incurred in connection with government loans shall be covered by the Fund.

(5) Where the assets of the new construction fund are insufficient to cover a deficit pursuant to section 73(4), section 74(3), section 76(4) and (8), section 77(2), section 78(5) and section 79(2) of the Act on Private Care Dwellings, the National Building Fund may, subject to the Minister for the Interior and Social Affair’s approval, obtain a government loan to cover the deficit. Loans taken out by the Fund shall be repaid as quickly as possible. .

(6) Any other revenues accruing to the Fund, including interest income, shall be used towards the Fund’s objective.

(7) Expenses for administration, etc. shall be paid from the Fund’s revenues.

(8) The Fund may decide that during the term of the loan borrowers shall contribute to the administration and reserve fund of the Fund under rules laid down by the Fund’s governing board. The rules shall be submitted to the Minister for the Interior and Social Affairs, who may demand that the rules be changed.

79. The divisions of social housing organisations comprising dwellings occupied before 1 January 1963 shall make annual contributions to the housing organisation liquid reserve fund to be contributed to the National Building Fund with the amounts laid down in pursuance of section 19 of Consolidation Act No. 483 of 16 August 1973 to consolidate the Act on Housing Construction.

80.-(1) In addition to any contributions pursuant to section 79 hereof, divisions comprising dwellings occupied before 1 January 1970 shall make contributions to the housing organisation’s liquid reserve fund to be contributed to the National Building Fund and used under the rules of sections 87-96 hereof. Contributions shall be provided only for housing areas.

(2) In 2005, contributions pursuant to subsection (1) above shall amount to DKK 21.15 per m2 of gross floor area for divisions which comprise dwellings occupied in the period from 1 January 1965 to 1 January 1970, as well as for divisions occupied before the said period which comprise dwellings to which the local council has before 1 January 1983 up till then granted exemption from contributions in whole or in part. For other divisions comprising dwellings occupied before 1 January 1965, the contribution shall in 2005 amount to DKK 47.30 per m2 of gross floor area. The amounts shall be adjusted once a year, the first time on 1 January 2006, on the basis of trends found in the building costs index for all dwellings for the second quarter.

(3) Where necessary to cover the National Building Fund's expenses, the Fund’s governing board may decide to charge current contributions from divisions which comprise dwellings occupied as from 1 January 1970. No contributions can be charged from divisions which comprise dwellings covered by the Building Defects Fund or the Building Defects Fund for Urban Renewal Measures. The contribution shall not exceed the contributions charged in pursuance of subsection (2) above, first sentence.

(4) The National Building Fund may grant exemption from payment of the part of the contributions which exceeds contributions paid in 1982 to the National Building Fund of the Housing Associations, to divisions which for the past three years have received subsidies from the Fund, the local authority or central government to reduce rent.

(5) The National Building Fund’s imposition of contributions pursuant to subsection (1) above shall be made in time for rent increases to be notified as stated in the rules of Part III of the Act on the Rent of Social Dwellings.

80 a.-(1) Two thirds of the funds forming part of the liquid reserve fund pursuant to section 20(1)(vii) hereof shall be paid to the National Building Fund.

(2) Funds forming part of the liquid reserve fund pursuant to section 20(1)(vi), hereof shall be paid to the National Building Fund.

80 b. -(1)For social housing divisions which have received a commitment for subsidies before 1 January 1999, two thirds of the funds which after 1 January 2008 form part of the liquid reserve fund pursuant to section 20(1)(iv) shall be paid to the National Building Fund.

(2) To the extent that a housing organisation repays loans to purchase a release from reversion clauses pursuant to section 98 a(5), fifth sentence, granted to divisions under subsection (1), the housing organisation shall pay 50 per cent of the funds which form part of the liquid reserve fund after 1 January 2008 pursuant to section 20(1)(iv) to the National  Building Fund until the loans have been repaid in full.

(3) To the extent that any division pursuant to subsection (1) above has been released by the National Building Fund from its duty to pay the share of the liquid funds, which, following transfer to the National Building Fund, remain in the liquid reserve fund, the payments of the housing organisation to the National Building Fund pursuant to subsection (1)  shall be reduced by one third of the exempt amount  

80 c.-(1) With respect to social dwellings intended for the elderly and owned by an independent institution, a local or regional authority and social dwellings for young people owned by an independent institution, the owner shall pay two thirds of the liquid funds, corresponding to the funds set out in section 20(1)(vii), to the National Building Fund.

(2) With respect to social dwellings for the elderly and young people set out in subsection (1), the owner shall pay the liquid funds, corresponding to the funds set out in section 20(1)(vi), to the National Building Fund.

(3) The provisions of subsections (1) and (2) shall apply correspondingly to social dwellings intended for young people and owned by an independent institution.

80 d. For social dwellings intended for the elderly, owned by an independent institution, a local or a regional authority and which have received a commitment for subsidies before 1 January 1999, the owner shall pay two thirds of the liquid funds resulting after 1 January 2008 from finally amortised mortgages, to the National Building Fund.

80 e. Social housing organisations shall pay the funds which form part of the liquid reserve fund pursuant to section 20(1)(viii) hereof to the National Building Fund.

80 f. Social housing organisations shall pay the net proceeds pursuant to section 75 s(5) hereof to the National Building Fund.

81. (Repealed)

82.-(1) Social housing organisations, independent institutions, local and regional authorities which pay funds to the National Building Fund pursuant to sections 79-80 e hereof shall report this to the Fund.

(2) Contributions pursuant to sections 79-80 d hereof shall be paid into special accounts with the National Building Fund. Contributions shall be paid quarterly in arrears within a month after the end of the quarter. .

(3) The National Building Fund shall ensure that compulsory payments are made on time. Where payment has not been made before the third day of the second month after the end of the quarter, interest shall also be paid, which, reckoning from the due date, shall be the interest laid down in pursuance of section 5(1) and (2) of the Interest Act. In respect of amounts due, the Fund shall be secured by mortgage and have priority ranking behind property taxes in the properties liable to pay contributions. .

(4) Subject to the approval of the Minister for the Interior and Social Affairs, the Fund shall lay down specific rules on the registration of the year of occupancy, cf. sections 79 and 80 hereof; the basis of payment, cf. sections 80 a-e hereof; and reports in pursuance of subsection (1) above.

82 a. Contributions pursuant to section 80 f hereof shall be paid at the same time as the financial statements pursuant to section 75 hereof are submitted. Section 82(3), first and third sentences, shall apply correspondingly.

83. If the Fund has liquid funds that cannot be used within the scope of the objects of this Act, the Fund may, subject to the approval of the Minister for the Interior and Social Affairs, lay down guidelines for the use of such funds.

Asset management

84.-(1) The Fund may issue certificates for the amounts paid pursuant to sections 79 and 80 hereof. The social housing organisation shall in no way have the amounts paid to the Fund at its disposal, nor shall the said amounts be made the object of execution or statutory debt collection.

(2) The housing organisation’s outstanding balance shall be reduced by an amount corresponding to the amounts which the Fund has granted to the housing organisation in pursuance of section 87 hereof as well as by amounts transferred to the National Liquid Reserve Fund; cf. section 89 hereof.

(3) In the event of the bankruptcy of the housing organisation, a demand may be made for repayment of the housing organisation’s outstanding balance pursuant to subsection (2) above if the creditors of the bankrupt estate would otherwise be unable to obtain satisfaction. The same shall apply to outstanding balances arising in the period until the bankrupt estate has been wound up.

85. Contributions of the nature referred to in sections 79 and 80 hereof shall carry interest when the operating result of the Fund so allows. Other contributions shall carry interest at minimum the same rate of interest which can be achieved by depositing in banks and savings banks.

86. Where the Fund’s activities result in a loss that cannot be covered by the reserves accumulated by the Fund, the loss shall be covered by writing down the contributions in pursuance of section 82 hereof.

87.-(1) A housing organisation shall have a preferential right to subsidies of up to 75 per cent of the amounts which the housing organisation has paid to the National Building Fund after 1 January 1980 in pursuance of sections 79 and 80 hereof and in pursuance of former acts on housing construction. Every year, the governing board of the National Building Fund shall determine the size of the percentage of preferential right within the maximum laid down in the first sentence above.

(2) Changes in the scope of the preferential right mentioned in subsection (1) above shall be approved by the Minister for the Interior and Social Affairs at the Fund’s recommendation.

88.-(1) Under rules to be laid down by the Fund’s governing board, which are subject to the approval of the Minister for the Interior and Social Affairs, the National Building Fund shall guarantee losses on divisional funds administered by social housing organisations. Funds from the National Liquid Reserve Fund may be used to the extent necessary.

(2) The National Building Fund may take over and continue the guarantee obligations which the Guarantee Fund of the Housing Associations have assumed for loans for construction, rebuilding, extension or modernisation of non-profit housing.

PART VII

Operation subsidies

Subsidies granted by the National Building Fund

89.-(1) Amounts not used in pursuance of section 87 hereof shall be transferred to a national liquid reserve fund in the National Building Fund.

(2) Half of the amounts paid to the National Building Fund pursuant to section 80 a(1) and section 80 c(1) hereof and section 63(2) of the Act on Private Care Dwellings shall be transferred to the National Liquid Reserve Fund.

(3) Amounts paid to the National Building Fund pursuant to sections 80 b, d and e hereof shall be transferred to the National Liquid Reserve Fund.

(4) The part of the funds of the National Building Fund not used in pursuance of sections 88, 90-94, 96 d and section 98 a(5) hereof nor to cover administrative expenses, etc. may be transferred to the National Liquid Reserve Fund.

(5) Interest shall be added to the National Liquid Reserve Fund at a rate corresponding to the official discount rate of the Danish central bank.

89 a.-(1) Half of the amounts paid to the National Building Fund pursuant to section 80 a(1) and section 80 c(1) hereof and section 63(2) of the Act on Private Care Dwellings shall be transferred to the new construction fund.

(2) Amounts paid to the National Building Fund pursuant to section 80 a(2) and section 80 c(2) hereof and section 63(1), first sentence, of the Act on Private Care Dwellings shall be transferred to the new construction fund.

(3) Amounts paid to the National Building Fund pursuant to section 73(4), section 74(3), section 76(4) and (8), section 77(2), section 78(5) and section 79(2) of the Act on Private Care Dwellings shall be transferred to the new construction fund

89 b. The objective of the new construction fund is to grant loan repayment subsidies for establishing social housing under the rules in force at the time of payment. Moreover, the objective of the Fund is to cover any deficit pursuant to section 73(4), section 74(3), section 76(4) and (8), section 77(2), section 78(5) and section 79(2) of the Act on Private Care Dwellings. The Minister for the Interior and Social Affairs may make a decision to the effect that the funds of the new construction fund shall be reversed to central government.

89 c.-(1) Contributions paid to the National Building Fund pursuant to section 80 f hereof shall be transferred to the proceeds fund.

(2) The main objective of the proceeds fund is to use funds from the sale of social housing under Part V A to establish new social family dwellings.

(3) The revenues of the proceeds fund, including interest income, shall be used towards the objective of the proceeds fund and for expenses for administrating the proceeds fund.

(4) Subject to the permission of the Minister for the Interior and Social Affairs, the National Building Fund may obtain a loan to cover the obligations of the proceeds fund pursuant to sections 96 j-m hereof. Expenses resulting from the loan shall be covered by the funds transferred to the proceeds fund. The Fund’s loan shall be repaid as soon as possible.

(5) Central government may guarantee loans as mentioned in subsection (4) above. Central government's expenses for establishing the guarantee shall be covered by the funds transferred to the proceeds fund.

90. From the funds mentioned in section 87 hereof, the National Building Fund may give grants for construction, rebuilding, extension, modernisation, measures to improve the environment, restoration works involving great expense, fire protection, urban renewal and housing improvement of social housing organisations’ properties and buildings with social and cultural purposes in connection with social housing organisations’ properties. The grant shall not exceed two thirds of reasonable expenses for the works carried out.

91.-(1) In the years 2007-2012, the National Building Fund may, from the funds transferred to the National Liquid Reserve Fund, cf. section 89 hereof, and in an amount within a total annual investment limit of DKK 2,400 million, make a commitment to granting loan repayment subsidies to mortgage loans to finance the restoration, repair, maintenance, improvement, conversion, combination of flats and improvement of the environment in the properties of social housing organisations. At least DKK 150 million of the investment limit mentioned in the first sentence above shall be used to make the properties of the housing organisations more suited for disabled people. The amounts shall be adjusted once a year by the change in the net consumer-price index, the first time on 1 January 2008. It shall appear from the Fund’s commitment that the Fund may postpone the commencement of the works with a view to limiting overall civil engineering works.

(2) Works pursuant to subsection (1) above shall to the widest extent possible be financed through rent increases. Furthermore, it shall be a condition of receiving subsidies pursuant to subsection (1) above that, according to agreement with the National Building Fund, the housing organisation finances the works with funds from the housing organisation’s equity, cf. sections 19 and 20 hereof, or with the housing organisation’s funds in pursuance of section 87 hereof, to the extent this is financially feasible and sustainable. The National Building Fund may demand that the housing organisation refund the Fund’s loan repayment subsidies in part or in full with funds from the liquid reserve fund. Reimbursement from the liquid reserve fund shall be deducted on a pro-rata basis when calculating the amount drawn by the National Building Fund from the investment limit mentioned in subsection (1).

(3) The borrower’s payment on loans set out in subsection (1) above shall be determined by the National Building Fund and shall be calculated the first time three months after the borrowing date as at least 3.4 per cent annually of the principal of the loan; but see subsection (4) below. The amount shall be regulated annually by 75 per cent of the increase in the net consumer price index, or if the latter has increased less, the private sector indices of earnings. Adjustment shall be made the first time in the first quarter of the second year of the loan, and subsequently until it corresponds to the total principal and interest payments on the loan. Where financing is with variable-rate mortgage loans, the borrower’s payment shall be adjusted until it corresponds to the principal and interest payments which can be calculated for a corresponding fixed-rate mortgage loan at the time of borrowing. Section 129(1), sentences four to seven, and subsection (2), section 130(1) and (2) and section 134 shall apply correspondingly.

(4) In respect of investments used to improve accessibility, to combine flats and to initiate measures improving the environment, the National Building Fund may grant loan repayment subsidies for a larger part of the principal and interest payments on the mortgage loan than mentioned in subsection (3) above, including in special cases grant subsidies for the full principal and interest payments on the mortgage loan. Where financing is part of negotiated financing pursuant to section 57 of the Act on Urban Renewal, loan repayment subsidies may be granted corresponding to the full principal and interest payments on the mortgage loan. In special cases the National Building Fund may also grant subsidies for a larger part of the principal and interest payments on the mortgage loan than mentioned in subsection (3) above. The borrowers’ average payment on the mortgage loan pursuant to subsection (1) above shall for each commitment period in the first year amount to at least 3.4 per cent annually.