Regulator serves housing associations with enforcement notices over ‘persistent and serious’ non-compliance

The regulator launched an investigation into both landlords in 2018 after it emerged they were linked to Pathfinder, a housing association accused by councils of “sham transactions” to violate agreements to provide affordable housing.

In November of that year, the RSH found Kinsman non-compliant for selling homes meant for social housing at full market value, with all the proceeds from the sales going to an investor.

A month later, it ruled that St Andrews was non-compliant after failing “to act with due diligence in entering into its property acquisitions and activities”.

In March 2019, the regulator found Kinsman in breach of the consumer standard over a failure to address fire safety issues for nearly a year after being made aware of them, leaving tenants at risk of “serious detriment”. 

According to the enforcement notices, the RSH lacks assurance that St Andrews and Kinsman can ensure effective governance, manage their affairs to an appropriate degree, and ensure that the arrangements they have entered into “do not inappropriately advance the interests of third parties or are arrangements that the regulator could reasonably assume were for such purposes”.

It also lacks assurance that they can manage their resources effectively so that social housing assets are not put at “undue risk”. 

The RSH expects providers to take “prompt and effective action” following standard breaches, but said St Andrew’s and Kinsman “have each failed to do so”. 

It continues to have “serious concerns” about weaknesses in both providers’ governance, “and that each has arrangements which inappropriately advance third-party interests”.

“The regulator also has serious concerns about the ability of each provider to manage risks to ensure their long-term viability and ability to protect their social homes,” it said. 

Kinsman has also failed to assure the regulator that it has addressed fire safety issues in some of its homes.  

After the independent reviews, St Andrews and Kinsman must provide the regulator with clear action plans with timescales. 

They must also engage with the RSH before acquiring any new homes.

Harold Brown, senior assistant director for enforcement and investigations at the RSH, said: “St Andrews Community Housing and Kinsman Housing have both continually failed to address the issues we identified, including their poor governance and property arrangements which have inappropriately advanced the interests of third-party investors.

“This is unacceptable. We are using our enforcement powers to require each of them to address their failures and return to compliance. 

“They must act promptly to put things right and, if necessary, we will consider using further powers.”

St Andrews and Kinsman have been contacted for comment.