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HCA could de-register ‘sham transactions’ housing association
An association sued by Southwark Council for alleged “sham transactions” that helped it avoid building affordable housing could lose its status as a registered provider, Inside Housing has learned.
The Homes and Communities Agency (HCA) has considered de-registering London District Housing Association (LDHA), formerly known as Faithland, at a series of meetings of its Regulation Committee over the past few months.
The association recently reached an out-of-court settlement with Southwark Council over claims it deliberately violated its Section 106 agreements for flats in the Signal Building. The council alleged that LDHA found buyers for the shared ownership flats who would staircase their ownership to 100% in a matter of days.
Last month, the High Court ordered the leaseholders of those flats to sell them back to Southwark Council at affordable housing valuations.
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Jonathan Walters, deputy director for performance and strategy at the HCA, told Inside Housing: “Clearly where there are accusations in the public domain about a provider that would raise questions about the governance of that organisation we would need to consider that.
“There’s also a question about who should still be on the register. One thing we think about is: does an organisation qualify as a social housing provider? We think about whether they meet our registration criteria.
“One of the questions is clearly: do they have any homes that qualify as social homes? Where organisations don’t, we have often de-registered them as a result.”
Southwark reached a similar settlement with LDHA, which has renamed itself Pathfinder, over flats in four other developments, which it claims were sold in “sham transactions” of a similar nature to those in the Signal Building.
There is currently no reason to believe that LDHA does not have any homes that qualify as social homes, although none of the flats it built in these developments would qualify.
According to its annual accounts, it had three units of low-cost rented housing and “various” retained interests in shared equity schemes at the end of the 2015/16 financial year.
It turned over £157,266 in 2015/16, reporting a deficit of £161,683, before making £327,349 on the disposal of assets.
