The Regulator of Social Housing (RSH) has published Regulatory Notices (RNs) for 3CHA Ltd and Reliance Social Housing CIC.
3CHA is a not-for-profit provider. It reported that it provided 742 units of general needs social housing and three units of intermediate rent social housing at 31 March 2021, although the units are actually supported housing. As 3CHA has less than 1,000 social homes it does not currently have a published Regulatory Judgement (RJ).
3CHA’s primary operating model means that it enters into short-term leasing arrangements for properties with third party managing agents. 3CHA has landlord responsibility for the tenants of those properties, while the managing agents deliver the landlord and management services on 3CHA’s behalf.
The RSH has found 3CHA to be non-compliant with its Governance and Financial Viability Standard and that it is failing to manage its affairs with an appropriate degree of skill, independence, diligence, effectiveness, prudence and foresight. Key areas where the RSH lacks assurance are:
- Management of the risk of third parties not acting in accordance with the agreements that are in place
- The effectiveness of systems intended to give oversight f rent and service charge income payments to third parties
- That arrangements entered into with third parties safeguard the interests of taxpayers and do not inappropriately advance the interests of those third parties
- The quality of the provider’s stress testing
- Compliance with the expectations set out in the Rent Standard and
- The reasonableness and appropriateness of 3CHA’s business planning assumptions.
Reliance is also a not-for-profit provider. It reported that it provided six units of general needs social housing and 7,867 units of non- social housing at 31 March 2021. As Reliance has less than 1,000 social homes it does not currently have a published Regulatory Judgement (RJ).
Reliance’s primary operating model is similar to the model operated by 3CHA.
The RSH has found Reliance to be non-compliant with its Governance and Financial Viability Standard and, as with 3CHA, that it is failing to manage its affairs with an appropriate degree of skill, independence, diligence, effectiveness, prudence and foresight. Key aspects of the RSH’s findings are:
- Management of the risk of third parties not acting in accordance with the agreements that are in place
- The effectiveness of systems intended to ensure that managing agents are providing the services and required levels of support to its tenants in accordance with the agreements in place and Housing Benefit claimed
- The effectiveness of systems intended to give oversight of rent and service charge income payments to third parties
- That arrangements entered into with third parties safeguard the interests of taxpayers and do not inappropriately advance the interests of those third parties
- The quality of the provider’s stress testing and
- The reasonableness and appropriateness of Reliance’s business planning assumptions.
The publication of the RNs means that Falcon Housing Association CIC is now the only provider on the RSH’s Gradings Under Review list, having been placed on the list last month, as the RSH is investigating matters which may impact on Falcon’s compliance with its Governance and Financial Viability Standard. Falcon is a lease-based provider based in the North East.
All of the RJs, RNs and GUR listings published by the RSH can be viewed on the RSH’s website here.