9:59 AM, 9th February 2024, About 11 months 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.
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’.
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.”
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.”
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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Blodwyn
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Sign Up11:48 AM, 9th February 2024, About 11 months ago
A predominantly Labour Council of birdcage dwellers??
What do the tenants made homeless do next? Line up at the Mayor's door and ask for a bed?
Mick Roberts
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Sign Up11:51 AM, 9th February 2024, About 11 months ago
Reply to the comment left by Monty Bodkin at 09/02/2024 - 11:39
Yes they gonna' pushing more & more this. I'm currently telling my tenants, if I'm charging u £300pm below market value, no Landlord is going to buy with u in, so we have to got to get u not that far behind. Even £200pm below, the new Landlord may swallow it for a couple of years.
But for Nottingham Council to start suggesting what u shared in that link Monty, they getting desperate. I get on with the Homeless section very well, have the top people's numbers, they (won't shout about it) always say Licensing started this massive homeless off.
AnthonyG
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Sign Up11:54 AM, 9th February 2024, About 11 months ago
Reply to the comment left by SimonP at 09/02/2024 - 01:49
Strange that the council is willing to evict the tenants and then reassure them it will help them find new homes. Surely the responsible thing to do if they care at all would be to take ownership of those properties in payment of the debt. Then the tenants can stay in their homes.
Blodwyn
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Sign Up12:02 PM, 9th February 2024, About 11 months ago
Reply to the comment left by AnthonyG at 09/02/2024 - 11:54
That would be too sensible, or is the bailiff already rattling their cage?
See also comment about Licensing. Nottingham has been known for many years as a centre of knife crime, now this. I'll stay in leafy Sussex!
Chris @ Possession Friend
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Sign Up12:10 PM, 9th February 2024, About 11 months ago
Reply to the comment left by Mick Roberts at 09/02/2024 - 11:47
Brilliant Mick, would Elaine let you give that to the media ?
Dennis Leverett
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Sign Up12:12 PM, 9th February 2024, About 11 months ago
You just couldn't make this up, it's unbelievable. The biggest problem is that in these local government situations no-one is being held responsible for this ridiculous bad management, cos it's always someone else's fault. They wouldn't last 5 minutes in any commercial set-up. So frustrating so!!!!.
Mick Roberts
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Sign Up14:00 PM, 9th February 2024, About 11 months ago
Reply to the comment left by Chris @ Possession Friend at 09/02/2024 - 12:10
Yes she would. I don't know how far though. I've even took it to the LGO. Council lied to them & said All is in hand. She's on her 4th or 5th Social worker in 4 years. Been with me 22 years.
Reluctant Landlord
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Sign Up14:04 PM, 9th February 2024, About 11 months ago
Reply to the comment left by Mick Roberts at 09/02/2024 - 11:47
in the end I had a vulnerable tenant who I could not get any simple help from housing, so I felt I had no choice than to take drastic measures (totally on his behalf) to get him help. I flagged the situation to social services and copied in the head of the council stating I believe they were being complicit in making the situation worse when simple common sense approach suggested their proactive intervention to help the chap was all that was needed. I openly said do you think issuing a formal eviction notice is going to help this person? They will be scared to death receiving this.
I made it clear that it was entirely the councils fault that they were making this person 'intentionally homeless' because they were failing to help him!
How can this be his fault?
It ended up getting sorted, but how many LL's would have just evicted and not bothered?
Seems its only the goodwill of landlords that is keeping some of the most vulnerable in accommodation these days!
When these landlords start saying they can't be bothered to fight the system on behalf of a tenant, or purposely not take on those who may need more assistance....its really going to hit the fan.
NewYorkie
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Sign Up15:15 PM, 9th February 2024, About 11 months ago
So, let me get this straight. The 'for profit' arm has misused money which should have been ringfenced, and must now pay it back to the Council, who have taken back control of the 'not for profit' arm [social housing].
First, where did the money go? Did they use it to cross-subsidise their 'for profit' arm? If so, surely a private company using public money is fraudulent.
Our amazing Sister left us suddenly just over a year ago. She was a senior housing director in London who lived for her work, and was admired across the sector and the political spectrum. It was her vocation, and she went the extra mile for her tenants when she really didn't need to, because many of her staff were lazy, incompetent, and often corrupt. Many years ago, she became CEO of a large London borough's housing association, and fought hard to achieve top audit marks for government funding. She was embarrassed at having to accept her CEO's salary, which she felt was too high, but she did have a budget of £800 million! The funding was meant to be ringfenced. It's what 'ALMO' means. But councillors were always after 'her' money to subsidise council profligacy, and finally, when she refused, they forced her out.
This misuse of ringfenced funds cuts both ways, and has been going on for many years. Except, when councils do it, they get away with it.
Dennis Leverett
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Sign Up15:33 PM, 9th February 2024, About 11 months ago
Reply to the comment left by NewYorkie at 09/02/2024 - 15:15and that just about sums it up.