The Regulator of Social Housing has found that two lease-based housing providers are non-compliant with the Governance and Financial Viability Standard.

Both Reliance Social Housing CIC and 3CHA have been under the spotlight after economic concerns from the Regulator.

On Reliance, the Regulator found that it “failed to ensure that it has effective governance arrangements in place that deliver its aims, objectives and intended outcomes for tenants in an effective, transparent and accountable manner.”

The judgement also said the organisation “failed to demonstrate that it has an appropriate, robust and prudent risk and control framework in place”

The Regulator also said there wasn’t enough “skill, independence, diligence, effectiveness, prudence and foresight” in its work.

Other findings included:

  • Reliance failed to ensure any arrangements it enters into do not inappropriately advance the interests of third parties or are arrangements which the regulator could reasonably assume were for such purposes
  • Reliance was not able to demonstrate it assesses, manages and where appropriate addresses risks to ensure its long-term viability, including ensuring that social housing assets are protected.

Since 2019, Reliance has expanded its provision of supported housing, primarily in Birmingham, to over 7,800 units. Reliance has reported in its most recent Statistical Data Return (SDR), that these units are non-social housing which means they are not ‘low cost rental accommodation’ as defined by section 69 of the Housing and Regeneration Act 2008.

A full judgement on Reliance can be found here.

On 3CHA, the Regulator found that the organisation “failed to ensure that it has effective governance arrangements in place”.

As well as also be found to fall foul of the same as Reliance above, the Regulator also concluded that 3CHA “has been unable to demonstrate that it complies with the Rent Standard”.

3CHA provides more than 700 units of supported housing although it reports them as general needs on its regulatory returns. 3CHA’s primary operating model means 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 under an agreement.

You can read the full Regulator judgement here.