Terms & Conditions

[doodville]

I have a provider/landlord who is registered on Homes and Communities Agency as a Registered Social Landlord, however the HCA indicate they are profit making.

They are opening a new scheme to provide extra care housing, it is supported by social Services. The landlord states that any support will be provided on behalf of social services by a 3rd party, they have stated they will provide landlord functions. They believe themselves to be at the least 'specified' at the most 'exempt accommodation' 

They cannot be treated as a charity nor a voluntary organisation (due to the profit making)

The HB regs state

Housing Associations Act 1985

1 Meaning of “housing association” and related expressions.

(1) In this Act “housing association” means a society, body of trustees or company—

(a) which is established for the purpose of, or amongst whose objects or powers are included those of, providing, constructing, improving or managing, or facilitating or encouraging the construction or improvement of, housing accommodation, and

(b) which does not trade for profit or whose constitution or rules prohibit the issue of capital with interest or dividend exceeding such rate as may be prescribed by the Treasury, whether with or without differentiation as between share and loan capital.

Does this mean that the profit making RSL has to be treated under LHA rules because they are profit making irrespective of the care and support, as they fall foul of the above Housing Association meaning within the HB regs

Any comments appreciated

 

[peterdelamothe]

Are you sure they are Registered? Or have they just applied for this?

 

The growth of private provision in the area of "exempt" is highly complex. The general intention was that such provision should NOT be met by HB except at LHA levels. There is nothing stopping the Council (social services) funding this. 

This bill was put forward to try to stop unregulated "exempt" from becoming (in the words of a MP) a "goldmine"

 https://hansard.parliament.uk/commons/2020-11-18/debates/FC8C59E0-9D55-41E2-A05A-BFDCE2C0F4F4/SupportedAccommodation

There is no easy answer here. The landlord is not an HA for HB purposes. There are lots of issues you need to consider.

You could start by asking the landlord (send them the reg you have quoted above) why THEY think they count as exempt. In the meantime you can pay any claimants the LHA level.

You are not going to get a one line yes / no answer here I am afraid.  

[doodville]

Yes they are definitly registered I have checked and quadruple checked and they are specifically listed as a 'profit making' RSL.

I have also cross referenced this with information on 'Companies House' which also indicate they are a PLC

The rents propesed to be charged are reasonable in comparison to other extra care accommodation.

The landlord believes they are 'specified accommodation' not exempt accommodation because they are a RSL and support is also being provided by a 3rd party,  

However the HB regs refer to a housing association not a registered social landlord although over the years HA's and RSL have become one and the same for ease. I know the rules with the HCA changed in 2008 to allow profit making social landlords to be registered, however it it still my understanding that this has no relevance on the HB regs  'must not trade for profit', this is why I do not class them as a true HA for Housing Benefit purposes and just a private landlord who should be treated as LHA.

thanks

 

  

[Pete Mc]

In Schedule 2 (Excluded tenancies) it has the following to say about profit making RSL's

 

(1A)In relation to a profit-making registered provider of social housing, sub-paragraph (1)(a) only applies to its social housing (within the meaning of sections 68 to 77 of the Housing and Regeneration Act 2008).

 

This suggests that we can exclude the tenancy of a profit making RSL if the tenancy applies to it's social housing.  Does anyone know how that works in practice?  Do RSL's have some properties where they make a profit and some where they don't or is this a bit of a red herring?  It may not make them "exempt accommodation" but could it bring them within the scope of being an RSL and therefore not restricted to LHA rates.  It would then simply be a decision as to whether rent is unreasonably high.

[Andy Thurman]

It is possible for a provider to operate a social housing arm – this fits with new-build requirements to provide some social housing in any new estate development. The most common approach would be for the builder to partner with an existing RP for this but this is a further option.

The social housing would be identifiable by having lower than market rents.

The more crucial factor here is that, to avoid UCHC and be paid HB, the specified accommodation definition must be satisfied. Regardless of any claim that the supported accommodation is part of their social housing portfolio (highly dubious given the rent levels) they do not meet the "non-profit" requirement for either "exempt" or "managed" alternatives.

So – IF they could prove it to be social housing, it would remove the need for a rent officer referral or LHA (as "excluded"). That, however, would only be if HB was payable but it doesn't get that far unless it is a pension age case.

[Pete Mc]

Yes, I was forgetting for a second about the UC angle, you're right.  Thanks Andy.

[peterdelamothe]

Rental advert posted on behalf of a HA private rental arm has caused a lot of comment today.

“Not just “no DSS” but also No Job No Home as “working applicants only” from a ‘social’ landlord!

The reference of EL000942 suggests this is the 942nd example of xxx HA using its private landlord company ironically called xxxx Living whilst operating NO DSS”.

Posted by a number of individuals (Joe Halewood quoted above). To be fair, the HA apologised and deleted the rental advert.

However, makes the fair point that the line between Housing Associations and their “private arms” is getting very blurred indeed!

[ElisabethGraham]

Hi, I was just wondering if there was any conclusion to what this means for a property that won't come under specified or exempt accommodation? We have a case exactly the same but won't be supported accommodation nor a UC claim. The claimant is already on HB and legacy benefits and is moving to a new property where the landlord is Legal & General Affordable Homes Ltd, which is listed on the register of social landlords with the entry 'Profit' and 'Company'. So on the one hand it is registered and our subsidy manual seems to suggest that registration as RSL is all that is needed to be classed as HA, but as per discussion above it is profit making which seems to go against us treating it as an RSL? Do we set this up as LHA or HA? We've not come across this before.

[peterdelamothe]

Tough one! From the discussions at the last hbinfo conference I think the subsidy position is HA…I welcome other comments though!

Legal and General are obviously an insurance company and have set up a number of profit making limited companies in the building and housing area in shared ownership and working with HA’s.

From the last accounts. 670 properties, £140 million and profits of over £3 million. Huge pipeline of investments. Secured homes pipeline of 4400.

About as far away from a HA or RSL as you could imagine. A multi billion pound insurance company that finances private property and makes a healthy profit over a number of private companies.

So the situation is bonkers but then the regs are so old no-one could have seen this

[Jo Duxbury]

We have a landlord called Sage Rented Limited that have bought a lot of new builds in our area. We have had a normal HB claim for one of there properties as the customer is still on legacy benefits.   They are listed as a for profit RSL.  I have had a looked on companies house and there is a very long report for them detailing about affordable housing.  The set up sounds complicated as they borrow money from a parent company to fund buying the properties as well as using Government grants.  There is no mention of them paying dividends.   The weekly rental is the same as the LHA. Not sure whether that is intentional. At the moment it wouldn't affect the level of benefit paid whether it was a HA or LHA cases but does anyone know whether this would satisfy the regs so that we can treat them as an HA. 

[Andy Thurman]

Without sight of all documentation, I would play safe and pay as an LHA case. "HA" rules i.e. excluded tenancies applies for the social housing part of a for profit RP's activities. There is a distinct possibility (under the "affordable tenancies" route you mention) that this would meet the definition but, if you pay as LHA it removes the possibility of any error if it was viewed by audit. "Unable to confirm whether this meets social housing definition so award based on LHA rules – HB covers full rent in any case"…

The caveat would be if they could provide something concrete confirming specifically that your claimant's tenancy is classed as social housing. 

[Kate77]

I am just wondering if there had been further updates on how profit making RSL should be treated?

We had a handful of claims a few years back, that named Sage Housing Ltd as its LL. It was established they were a for profit making housing association. Based on the above discussion the decision maker decided that these claims should be treated under the LHA rules.

Sage Housing Limited are now querying this decision. They exempt they are not a housing association as defined in the Housing Associations Act 1985. However, given the wording of Regulation 13C (5) of the Housing Benefits Regulations 2006, they would query the statement that claims made in respect of Sage’s tenancies must therefore be assessed under the Local Housing Allowance rules.

The regulation provides that:

…[maximum rents (LHA)] do not apply in a case where –
(a) the landlord is –
(i) a registered social landlord,
(ii) a non-profit registered provider of social housing, or
(iii) in relation to a dwelling which is social housing (within the meaning of sections 68-77 of the Housing and Regeneration Act 2008), a profit-making registered provider of social housing.

I’m currently reviewing the decision and would appreciate any guidance on how we should be treating them and how any other Local Authorities are treating claims from Sage tenants.

[Peter Barker]

They are right and wrong at the same time. They are right in that a for-profit RP’s social housing portfolio is subject to the same HB eligible rent as the general needs stock of a non-profit RP: no LHA, no RO referral unless rent unreasonably high.

But they cannot provide any category of “specified accommodation” because they are not a housing association as defined in Reg 2. This means their working age tenants cannot make new HB claims in the first place so they don’t get as far as the calculation of eligible rent.

[Author]

Posts