Council-owned landlord evicts tenants to repay £18m council debt

Council-owned landlord evicts tenants to repay £18m council debt

9:59 AM, 9th February 2024, About 3 weeks ago 46

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Tenants of NCH Enterprises, a council-owned company, are facing eviction as the firm tries to sell 44 properties to repay a £18m debt to Nottingham City Council, the Local Government Chronicle (LGC) reveals.

The news comes just days after it was revealed that the council had failed to ringfence its selective licensing fees.

The company, a subsidiary of Nottingham City Homes (NCH), which manages the council’s housing stock, owes the money to the council for illegally using funds from the housing revenue account (HRA) over six years.

The Chartered Institute of Public Finance and Accountancy (CIPFA) found in 2022 that NCH had breached the law by not ringfencing the HRA funds, and the company admitted in its latest accounts that it has an ‘obligation’ to return the money to the council.

Took back the management of its housing stock

The council, which issued a section 114 notice – a legal warning of impending bankruptcy – last year, took back the management of its housing stock in March 2023, along with all NCH staff.

However, a service level agreement between the council and the company means the same staff still provide services to the properties owned by the company.

The company’s accounts for 2022-23, filed in January, show that it still owns 187 properties, which it lets at market rent.

The accounts also reveal that it has ‘commenced the process of asset sales’ as part of the solution to the £18m debt.

LGC has obtained one of the letters sent to the affected tenants, which shows that the company is issuing section 21 notices, also known as no fault evictions, to them.

The letter gives the tenants a ‘move out date’ and asks them to ‘let us know asap if you have any queries’.

‘We’re having to take difficult decisions’

A spokesperson for the Nottingham City Homes Group board, speaking on behalf of the council, told LGC: “These are difficult times and we’re having to take difficult decisions.

“Our for-profit subsidiary is not making a profit, which is putting the group as a whole at risk.”

They added: “The controlled approach we’re taking to winding up NCH is working well, and we will continue to work closely with affected tenants to support them in every way we can to find new homes.”

Pledged to end section 21 ‘no-fault’ evictions

The government has pledged to end section 21 ‘no-fault’ evictions, which allow landlords to evict tenants without giving a reason, with two months’ notice under the Renters (Reform) Bill.

However, one tenant accused NCH of acting like a ‘rogue landlord’ and said the letter did not inform them of their rights as tenants.

They said they could stay in their property beyond the date on the section 21 notice and require the landlord to seek a court order, which could take up to five months.

The tenant told LGC: “They are panicking and causing unnecessary stress during these difficult times by informing their tenants that they ‘must be’ out on a particular date rather than explaining their tenants’ rights.”

Staff had visited every tenant in person

The NCH spokesperson said staff had visited every tenant in person to explain the situation and their rights and had given affected tenants ‘first refusal’ to buy the property.

They said: “We appreciate that this is difficult for our tenants, and it was a difficult decision for us to take, but we believe we’re acting in the best interests of the group as a whole and the wider tenant population we serve.

“We have been careful to offer affected tenants flexibility as regards timing of the end date of their tenancy and have assured them they can come to us to discuss their concerns at any time.”


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Comments

Dean Allan

18:11 PM, 11th February 2024, About 3 weeks ago

Reply to the comment left by Nav K at 11/02/2024 - 18:02
I asked that question. They said they are not selling with tenants in situ

Matthew Jude

18:25 PM, 11th February 2024, About 3 weeks ago

Reply to the comment left by NewYorkie at 11/02/2024 - 12:57I assume Shelter, crisis and generation rent won't be interested as it's their hatred of private landlords that drives them. Ironically, it's the same with Nottingham City Council. What a state were in, none of this is the fault of Landlords, but we will be blamed. I feel sorry for Dean Allan and his family, but how did a couple with two jobs get a social housing property when there are 10,000 families on the waiting list, some must be unemployed and homeless? I've had to give a section 21 to a tenant with a newborn and a young child, no properties available for five months. I wonder if Mr Dean's employment by a local authority helped? Wait until the delusional Angela Rayner gets into power. The situation is going to get worse for tenants. I've started asking mine what they plan to do in retirement? Generally, no plan at all!

NewYorkie

18:41 PM, 11th February 2024, About 3 weeks ago

Reply to the comment left by Matthew Jude at 11/02/2024 - 18:25
Possibly, Dean's employment helped, but as far as I can see, this is not 'social' housing. It's 'for profit'. I'm sure Dean can put us right.

Peter Lassman

18:43 PM, 11th February 2024, About 3 weeks ago

Reply to the comment left by Nav K at 11/02/2024 - 18:02
That’s what I said keep £18m worth of properties, have an income then claim any properties bought with previous income from the properties

Badger

11:19 AM, 12th February 2024, About 3 weeks ago

On the subject of Nottingham Council's advice to landlords - I almost had to laugh out loud at this gem from their FAQs for landlords:

"Sometimes a tenant will request that you serve notice because they believe that they will be able to obtain a tenancy with a different landlord on the grounds that you have evicted them.

We would ask for your assistance in these circumstances. There is significant pressure on homelessness services, and we have a shortage of accommodation for homeless families. If your tenant does this, please do all you can to confirm that they have found a permanent home to move into. This could mean having sight of a letter with an offer of accommodation on it. If they have not secured permanent accommodation to move into, and they intend to approach the Council as Homeless, we may not be able to assist them with rehousing as we may consider that they have deliberately contrived their own homelessness."

Reluctant Landlord

14:02 PM, 12th February 2024, About 3 weeks ago

Reply to the comment left by Badger at 12/02/2024 - 11:19
classic! They are clearly delusional if they think LL's are going to 'help' in any way whatsoever! Bloody cheek!

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