RSH accuses Aves of ‘misrepresenting’ status as non-profit

The Regulator for Social Housing (RSH) has accused Aves Housing of misrepresenting their status as not-for-profit in a damning regulatory judgement, which found the housing provider was not meeting the governance and financial viability standard or the rent standard.

According to the regulator, Aves “claims to provide supported housing in London”, leasing homes and providing tenant services alongside a third party that owns many of them.

Its findings follows a first tier tribunal judgement over actions taken by eight London boroughs to stop payments to the organisation due to concerns that the housing was not exempt accommodation and that there was therefore no entitlement to housing benefit.

The tribunal found Aves made “substantial profits” for a third party that had control over operations and overcharged for services. It also found tenants did not need support or were not provided with it as claimed.

In addition, it said that license agreements had taken advantage of housing benefit rules that allow for enhanced payments. 

The RSH said Aves had failed to self-refer after the tribunal judgement. Following its own investigation, it found “fundamental failings” in its operations, raising concerns it had “given up control of its business and is not operating as a genuine not-for-profit”. 

It said the board had not demonstrated enough “skill, capacity and independence to manage its affairs” and that it expected the provider to “get independent assurance to show that it is keeping tenants safe in their homes and mitigating potential risks”.  

The RSH said Aves relied on housing benefits and higher rates of rent as its main income, which reduced significantly following the action taken by local authorities. It also failed to show its rens met the rent standard and were below market rate.

The RSH said it would “work intensively” with Aves, but that information provided so far was “inconsistent and contradictory”. It said it would “review all options, including the use of enforcement powers”.     

“Supported accommodation is vital to serve some of the most vulnerable people in society. We will absolutely not tolerate cases where social landlords misrepresent their status as not for profit to take advantage of enhanced housing benefit payments, or charge higher rents when they are not justified,” said Jonathan Walters, chief executive of RSH. 

“We have serious concerns about Aves’s ability to solve these issues. Our scrutiny will remain intensive and, if Aves cannot or will not put things right, we will consider using our regulatory and enforcement powers. We continue to work with local authorities and other public bodies to ensure that social landlords meet their responsibilities.”

The RSH also published a regulatory judgement for YMCA Thames Gateway following an investigation which found the organisation did not have an up to date understanding of the condition of tenants’ homes and can not show it meets all legal health and safety requirements or provides an effective repairs service.

It also found the organisation was not effectively managing risk, leading to a “significant deterioration in liquidity and a failure to ensure covenant compliance”. 

While YMCA TG has “managed its position with funders”, according to the regulator, it has placed its social homes at risk.

The regulator said the provider’s board was taking steps to address its acute viability position and protect its social homes, and was working positively with the RSH.

Mark Johnston-Wood, interim chair at YMCA TG, said the board fully accepted the findings and was ”determined to address every issue identified”.

”While the judgement highlights serious historical weaknesses, it also reflects the extensive work already undertaken to stabilise the organisation and create a sustainable future,” he said, adding that the provider had “already delivered substantial improvements and have clear plans in place to complete the remaining actions”.

The RSH published a further 18 regulatory judgements as part of its regulator inspections and responsive engagement. 

Aves has been contacted for comment.

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