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Regulator of Social Housing publishes Regulatory Notice for small lease-based provider

The Regulator of Social Housing (RSH) has published a Regulatory Notice (RN) for Parasol Homes Limited, whose business model is to enter into long and short-term leases to provide different types of supported housing.  Parasol reported that it owned and managed 477 units of social housing and 1,256 units of non-social housing as at 31 March 2021.  As Parasol owns less than 1,000 social homes it does not currently have a published Regulatory Judgement (RJ).  The RSH had placed Parasol on its Gradings Under Review (GUR) listing in November 2021, as it was investigating matters which may have impacted on the provider’s compliance with its Governance and Financial Viability Standard.

The RSH has subsequently found Parasol to be non-compliant with the Governance and Financial Viability Standard.  Key aspects of the RSH’s findings are that Parasol has:

  • Entered into long-term lease arrangements without demonstrating that it fully understands and can mitigate the associated risks
  • Entered into arrangements with companies with which it is connected and where there is commonality in the ultimate control and shareholding arrangements, which might inappropriately advance the interests of third parties
  • Failed to provide assurance of its management of risks associated with the provision of non-social housing and supported social housing on short-term leases
  • Not evidenced that payments to managing agents do not inappropriately advance the interests of third parties
  • Failed to assure the RSH that its long-term financial forecasts are based on appropriate and reasonable assumptions and
  • Been unable to evidence that its properties meet the criteria of Specialised Supported Housing, calling into question compliance with the Rent Standard.

All of the RJs, RNs and GUR listings published by the RSH can be viewed on the RSH’s website here.