Tenants and residents of Leeds Jewish Housing Association (LJHA) have contacted SHAC with a list of concerns about the trading practices of their landlord, including apparent conflicts of interest and a possible breach of financial protocols.
Residents are now considering what actions to take, but their concerns are symptomatic of a generalised lack of accountability and an exploitative culture among housing association executives.
Concerns Raised
Lindsay Bush, a resident of LJHA for seven years, explained that she started to notice anomalies in the invoice packs sent by the landlord in respect of service charges. She spoke with other residents on her estate and found they too had concerns. A group formed and began working systematically through the invoice packs and doing other research.
Victor Jackson, another resident for over 20 years, registered blind and a vulnerable 80-year-old, told us:
We have spent years querying our landlord about the service charges and invoices and trying to get answers to our questions which were either ignored or circumvented. The lack of information prompted us to probe further, only to discover a worrying trend of even more inconsistencies and irregularities.
We should be spending our time living our lives instead of fighting our landlord to get straight answers or supporting evidence for our straightforward questions”.
Victor Jackson, LJHA resident
The examples presented by Lindsay and Victor include the time in February 2022 when LJHA advertised for companies to bid for a cleaning contract via a procurement business. They found that a member of the LJHA board was also an employee for the procurement business involved in managing the bidding process. A second member of the LJHA board was a director of two subsidiary companies relating to the procurement business
Relationships in Question
The group’s research also identified that governance, decision-making, and financial dealings at LJHA were opaque at best.
For example, both LJHA and a company called Lady Park (Leeds) Management Company Limited and LJHA Development Services share a registered company address and list of directors. Furthermore, the mutual interests of LJHA and Lady Park (Leeds) Management do not appear to have been publicly declared anywhere.
Residents believe that that management company contracts with LJHA to provide services, but faced with a wall of silence, it has not been possible to verify the true nature of the relationship.
For the whole of 2020, residents’ service charge packs included invoices issued by a company which charged for Value Added Tax (VAT) despite not being registered with Companies House.
Without registration, a company is not eligible to charge this tax.
Despite bringing this to their landlord’s attention, LJHA declined to either remove or explain the apparently unlawful charges.
SHAC has been sent other examples demonstrating inconsistencies in sub-contractors’ details shown on invoices, and their registration with Companies House.
LJHA claims to follow the National Housing Federation’s code of governance.
Significant Sums
Some of the invoices giving rise to concerns are for significant amounts of money. Residents were charged a total of £15,500 for carpet installation at Victor’s block. A few years later, residents discovered that the company which carried out the work had actually been dissolved a year prior to the invoice date.
Residents questioned the authenticity of the invoices, but this again was neither explained nor refunded.
Lindsay says;
“Residents are concerned that LJHA did not ensure that the costs passed on to residents were legitimate. The landlord isn’t just a courier for invoices between sub-contractor and residents, they have to check that the invoices are legitimately and correctly applied”
Lindsay Bush, LJHA resident
Apparent conflicts of interest arose in other areas of LJHA’s operation. One example was the Board’s decision to amend its constitution in September 2019. The Financial Conduct Authority (FCA) requires an independent and legally qualified person to act as a witness to the signature. Instead, an LJHA board member acted as witness. Although she is a legally qualified person, her role on the LJHA board means that she would seem to fail the test of independence and impartiality required by the FCA protocol.
Residents believe that an overlap of personnel potentially creates a conflict of interest within the decision-making process. Victor highlighted this saying:
I did not feel that an individual could be expected to act in the best of interest of both the landlord and a sub-contractor the landlord is using at the same time. Most people would see this as a conflict of interest.
Victor Jackson, LJHA resident
These examples have been drawn from a substantial body of evidence collected by LJHA residents. When the issues were raised with the landlord, responses have either not been forthcoming, or explanations lack coherent justification.
The Need for Reform
Housing association board members and company directors have a duty to ensure that they behave with probity, and must assure themselves that conflicts of interest are avoided.
While no-one has made allegations of deliberate wrong-doing, there is evidence of apparent conflicts of interest and of charges being passed on to residents from sub-contractors without adequate checks by LJHA.
These and other examples reported by SHAC show that residents across the housing association sector are vulnerable to financial exploitation.
Accountability to residents is severely lacking when it comes to service charging and decision-making.
LJHA has just 500 properties split between specialist and general needs housing. This case shows that a lack of accountability can affect landlords of all sizes.
All cases speak to the need for major reforms across the housing association sector; something that SHAC will continue to campaign for. Register here to join.
25 May 2022
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