Regulatory review argues for tenant compensation
Tenants could be paid compensation by their landlords under a new regulatory regime designed to give greater power to people living in social housing.
Professor Martin Cave, the man charged with carrying out the first independent review of the sector's regulation in three decades, has revealed he will recommend landlords face a series of graded sanctions if they perform badly.
The ultimate punishment would be the compulsory retendering of the management of homes where tenants were unhappy with services.
Professor Cave's report, which has the working title Putting tenants first, is due to be published in the next few weeks.
His report will reject a call from the National Housing Federation to introduce a system of self-regulation. Instead it will recommend a ‘co-regulatory' regime. This would see landlords send annual returns to a regulator and monitor themselves.
However, Professor Cave will suggest that an organisation should be ‘standing in the wings' armed with a ‘big stick' if the system fails.
Speaking to delegates at the National Federation of Arm's-length management organisations' conference last week, he said: ‘It is really that system of regulation that we should be looking for. Tenants need a regulator there to strengthen their hand.
‘There would be range of things that the regulator would do [following an investigation of tenants' complaints] starting with improvement notices – using inspection where necessary.'
Under the new system a group of tenants could trigger an investigation by the regulator. ‘If one bunch of managers isn't any good then something the regulator could do is demand that management be retendered,' he said.
There was also a ‘legitimate regulatory interest' in making sure housing associations' surpluses were channelled into areas such as house building or providing services to tenants, Professor Cave added.
If they were not, the association could face action from the regulator.
‘This might extend to saying to a provider “you have let this group of tenants down, you have saved money inappropriately and you should give it back to the tenants in a form of compensation,”' he said.