Notifiable Events

What this report is about

This is our first annual report on notifiable events (NEs).  We developed this report in response to feedback received from landlords as part of our review of our Regulatory Framework.

In this report we set out what NEs are and why Registered Social Landlords (RSLs) must let us know about them and what we do when we receive them.  We detail the NEs we received in 2023/24 and provide case studies to illustrate how we dealt with them and what we can learn from them.

What notifiable events are and our guidance on them

RSLs must tell us about certain events which may put at risk:

• the interests or safety of tenants, people who are homeless and other service users;
• the financial health of RSLs, public investment in RSLs, or the confidence of private lenders; or
• the good governance and reputation of an individual RSL or all RSLs.

Our guidance on notifiable events provides further information on this.

It is important to stress that an RSL notifying us about various events does not necessarily mean that the RSL has performance issues.  In fact, NEs can indicate strong governance and that the RSL is clear on what is important that we, as regulator, need to know about and when we need to know about it.  Advising us of NEs means that RSLs are meeting the notification requirements set out in chapter 3 of the Regulatory Framework and in the Housing (Scotland) Act 2010.  It also gives us the opportunity to analyse trends and highlight potential risks across social housing which, in turn, informs our discussions with other stakeholders such as government and public/private funders. This can help to support social landlords and policy makers.  We also consider NEs in our annual risk assessment.  The way in which a governing body handles certain NEs can give us assurance about the wider governance of the RSL.

Analysis of notifiable events received during 2023/24

We received 398 NEs during the year from a total of 110 RSLs. This is down from 489 NEs from 125 RSLs in 2022/23.  In 2023/24, 80% of those 110 RSLs submitted between one and four NEs.  Some RSLs submitted more, with one submitting 29 NEs most of which were connected to its large scale disposal strategy.  Twenty-eight RSLs did not submit any NEs.  No NEs being received from an RSLs is a factor we may take into account as part of our governance risk assessment process.

The following table shows the breakdown of NEs by the categories chosen by RSLs when they told us about them.

Further analysis of these categories highlights the types of issues that were notified to us:

• governance and organisational issues
  • staff/organisational structures, such as senior staff changes, employment tribunals and settlement agreements accounted for just over half of the issues notified to us under this category.  This followed a similar pattern in 2022/23.
  • governing body issues such as the resignation of a governing body member for non-personal reasons.
  • a small number of breaches of charitable/legal/regulatory obligations and material changes to the RSL’s Annual Assurance Statement. 
• financial and funding issues
  • changes of auditors and notifications of potential breaches of covenants were the most common events notified to us
  • fraud or the investigation of fraud, financial loss or cashflow issues and pension matters.
• disposal of land and assets
  • disposals over £120,000 continue to top the events reported to us under this category
  • mid-market rent notifications.

How quickly we dealt with the notifiable events

RSLs automatically receive an acknowledgement when an NE is successfully lodged on our Landlord Portal, a secure, password-protected website where social landlords communicate with SHR.  The RSL’s regulation team then aims to contact the RSL within eight working days to either close the NE because the NE came with all the information needed to consider it fully or to request further clarification or additional information.  We close NEs when we are assured that no further action is needed to resolve the matter at hand.  While most cases are closed quickly, others can be open for longer and there are examples of this in section 5 below.  This can happen where RSLs are involved in litigation (such as employment tribunals) or discussions with other organisations, and these can be protracted in some cases.     

In 2023/24 we closed 96% of the NEs we received within eight working days and 44% of them were actioned within 24 hours of receipt. This compares to 89% in eight working days and 37% in 24 hours during 2022/23. 

Case studies

The following case studies are typical of the NEs we received, what we asked landlords to do and what we did as a result.  We also show in brackets the number of working days it took from the date we received the NE to the date we closed it. 

It is worth noting that RSLs work in differing circumstances and our response to NEs can depend on a number of factors which are individual to the RSL. For example, in some cases we might already be aware of the background to an NE and will not need to ask for information that we might otherwise request.   

• RSL A told us about the closure of its factoring subsidiary.  The information the RSL submitted with the NE showed us that the Committee had overseen the whole process and that the RSL had obtained the necessary financial and legal advice.  The transfer of the factoring function to the housing association itself was successful and the association maintained business as usual throughout the transfer.  We accepted the NE without needing to ask for further information, but we did ask the RSL to note the change in the appropriate section of its next Annual Return on the Charter.  RSL A agreed to do so.  (5 days)
• As a systemically important RSL, RSL B submitted - as required - an NE advising us of the resignation of one of its senior managers.  We asked RSL B for the date the manager left, its plans for covering the post during any gap period and its longer term plans for the post.  The RSL provided the necessary information by return and we closed the case.  (7 days) 

• RSL C submitted an NE regarding the proposed removal of a Committee member under its rules.  The NE included a copy of the Committee report setting out the circumstances under which the member was to be removed.  We were able to close the NE with no need to ask for further information.  (1 day) 

• RSL D told us that its repairs contractor was underperforming.  As a result, it had devised an action plan which included weekly meetings with the contractor, monthly reviews by staff and senior managers of performance and customer feedback, and the development of proposals for alternative services should the contractor not improve its performance.  We asked RSL D to keep us up to date on progress and any changes to its timetable. The RSL made reports to its governing body and Audit and Risk Committee as appropriate and shared them with us.  We closed the NE when the RSL advised us that a new contractor had been appointed and taken over as the former contractor had been unable to improve its performance to acceptable levels.  (110 days)  

• RSL E advised us that a former employee was taking the RSL to an employment tribunal on the grounds of unfair dismissal.  The RSL included the date of the preliminary hearing and confirmed that it was taking the appropriate insurance and legal advice.  It also confirmed that it was dealing with the matter in line with its procedures and that its Board was being kept informed.  We asked the RSL to keep us up to date with progress which it did.  We closed the case when RSL E advised us that the former employee had withdrawn their claim.  (5 days) 

• RSL F advised us that it was in discussions with one of its lenders to amend the interest cover covenant calculation/compliance threshold due to a specific issue around the ‘add back of major repairs’ in the adjusted operating surplus calculation.  This could have resulted in the RSL potentially breaching a lending covenant if the calculation remained unchanged.  The RSL outlined the options that were being considered, the potential timelines for resolution, the planned course of action if discussions to amend the covenant conditions were unsuccessful or if any new conditions attached were deemed prohibitive.  It also advised us that feedback from the discussions with its lender had been positive to date.  The NE included a copy of the RSL’s budget report including 30-year projections which provided greater detail behind the potential covenant breach, highlighting its implications, what was causing it, the potential mitigation and the likelihood of the potential breach occurring.  In line with our expectations, the RSL confirmed that this report had been submitted to the governing body and so it was aware of the potential breach.  RSL F had given us sufficient information on the matter and we therefore asked it to keep us updated as discussions progressed particularly, for example, if the risk of the potential breach increased or crystallised or discussions stalled.  RSL F did keep us informed until the discussions with the lender were successfully concluded and we were able to close the case.  (152 days)

• RSL G advised us that a media outlet had contacted it for comments about mould and damp in one of its properties and about the alleged withdrawal of an offer of housing made to the family in the affected property.  The RSL gave us a copy of its comments to the media outlet and summarised the action it was taking to deal with mould and damp in the property, to find suitable, alternative accommodation for the family and why the family had refused the offer made.  We asked the RSL to give us more information about the history of mould and damp in the property and the tenant’s application for alternative housing.  The RSL sent us information along with photographic evidence of the extent of the mould and damp in the property, the action it had taken to deal with it and how the tenant’s availability was affecting this.  It also explained why the tenant had refused the offer of accommodation and confirmed that it was continuing to work with the tenant to source accommodation that would offer the number of rooms required and meet a variety of medical conditions within the family.  We were assured that the RSL was responding appropriately to the situation.  The RSL then notified us that the tenant had advised that they had secured alternative accommodation.  The RSL confirmed to us that it would complete remedial work on the property before it was relet.  We then closed the case.  (90 days)

What we have learned from the notifiable events submitted in 2023/24

Governance and organisational issues were the largest category of NEs we received during the year.  The number of performance and service delivery NEs were down on the previous year, while NEs about the disposal of assets increased.

We dealt with more NEs within our turnaround target period than in 2022/23 and both internal and external quality assurance checks showed continued improvement in the way we handled them.

Good information provided by an RSL at the point it submits an NE is key to the quick and efficient management of the NE for both the RSL and for us.  Most RSLs provided good supporting documentation along with the NEs when they first submitted them, such as copies of board reports and minutes.  The quality of this supporting information is one reason we are able to close most NEs within eight working days. 

We also found that the committees and boards of most RSLs submitting NEs were doing so having considered the appropriate information and advice in accordance with our guidance. 

Following feedback from RSLs we have made improvements to the Landlord Portal so that landlords can provide additional documents to us after an NE has been submitted. 

Feedback

This is the first annual report we have produced on NEs.  We would welcome any suggestions for future content.  Please contact us at shr@shr.gov.scot.