Decision

Regulatory Notice: Joseph Rowntree Housing Trust (25 October 2023)

Updated 29 November 2023

Applies to England

RSH Regulatory Notice

• Provider: Joseph Rowntree Housing Trust
• Regulatory code: 5079
• Publication date: 25 October 2023
• Reason for publication: Economic Standards
• Regulatory route: Reactive Engagement

Other providers included in the judgement

None

Regulatory Finding

The regulator has concluded that:

a) Joseph Rowntree Housing Trust (JRHT) is not compliant with the Rent Standard and between 1 April 2016 and 31 March 2020, prior to the introduction of the Rent Standard, was not compliant with the legislative requirements of the Welfare Reform and Work Act 2016.

b) JRHT incorrectly assumed 89 of its units were specialised supported housing (SSH) excepted from the Rent Standard. Following investigations instigated by its board, JRHT has evidence that exceptions to the Rent Standard have been misapplied for these units, some since 2007, leading to incorrect rents being charged to tenants.

c) JRHT has also identified errors in relation to rent setting for up to 400 fair rent^{[footnote 1]} tenancies. This is a result of not reviewing the registration of its fair rent tenancies since 2008. The maximum fair rent has been exceeded for at least 183 tenancies.

d) At least £479,000 is estimated to have been overcharged by JRHT in respect of these issues.

The Regulator’s Findings

JRHT made self-referrals to the regulator in April 2023 and July 2023 identifying issues with its rent setting. These covered JRHT’s categorisation of SSH units, and its review and rent setting of fair rent tenancies.

Two different issues have been identified in JRHT’s review of units designated as SSH. The first relates to tenancies in units where the SSH exception to the Rent Standard has been applied despite the units having benefitted from public grant funding, and therefore not meeting the definition of SSH. This means that since 2017/18, rents on at least 61 units have been incorrect, with 64 tenancies known to be affected, leading to a breach of the Rent Standard.

The second issue relates to units designated as SSH in 2018 on the basis that they included a support service offering in line with the definition applicable to the Rent Standard. JRHT’s investigation has found that these units have not included a relevant support service since the designation as SSH and the exception to the Rent Standard has therefore been misapplied. Rents in the 28 affected properties have been incorrect since 2017/18, with 32 tenancies known be affected.

JRHT has had approximately 400 tenancies registered as fair rents up to 2009. JRHT’s investigations found that fair rents have not been subject to re-registration with the Valuation Office Agency since 2008, leading to the maximum rent breaching the level expected in the Standard across at least 183 tenancies.

As a result of these issues JRHT is not compliant with the Rent Standard and the regulator does not have assurance that JRHT was previously compliant with the Welfare Reform and Work Act 2016.

JRHT’s board became aware of these issues as a result of its own investigations. It has accepted the regulatory findings and is engaging positively with us, with support from external advisers, to resolve these issues. A detailed review to assess the scale and nature of any other potential errors in rent setting across JRHT’s portfolio of social housing assets is underway. While this review is not yet complete, JRHT has developed a plan to address the issues that have already been identified. This includes:

• creating a plan to reset the rents in question to the correct levels;
• communication with, and reimbursement of, tenants who have been overcharged;
• completing a review of rents and service charges across all properties to improve assurance on rent levels;
• developing new rent policies and procedures to reflect current requirements; and
• undertaking an internal audit review of rent setting and annual rent changes.

About the provider

JRHT is a charitable community benefit society. It owns around 2,600 homes, most of which are in York, but also in Leeds, Scarborough and Hartlepool, as well as other smaller communities in North and East Yorkshire.

About our Regulatory Notices

Regulatory notices are issued in response to an event of regulatory importance (for example, a finding of a breach of the Rent Standard or of a consumer standard that has or may cause serious harm) that, in accordance with its obligation to be transparent, the regulator wishes to make public. More detail about Regulatory notices is set out in Regulating the Standards.

1. For more information about ‘Fair Rents’, please see the Fair Rents guidance on GOV.UK and The Social Housing Rents (Exceptions and Miscellaneous Provisions) Regulations 2016. ↩