How confident are Board and Executive Teams on the regulatory requirement to keep a thorough, up to date, accurate and reliable ‘Assets and Liabilities Register’?  

Does it have the granular transparency needed to provide the holistic overview of homes as assets?

With data as a top priority for every housing provider and the Regulator of Social Housing, there is a strong focus on cleansing existing data and building a holistic understanding of the homes.  However, how granular is this review/plan and how robust is the governance to support its accuracy and reliability?

A lens that is not often looked through, but is one of the most fundamental is through the lens of property legal.  Some of the questions include:

1. Can we reliably and accurately delineate which properties are ‘owned’ and which properties are ‘managed’?
2. Is there a ‘thread’ that follows the lifecycle of the homes providing transparency on legal ownership, legal and planning liabilities, and compliance of these liabilities for each unit?
3. Do we reliably and accurately understand our land and garage ownership to holistically evaluate the depth and breadth of our development opportunities?

It is often overlooked how business critical it is to have a robustly governed data and document thread that flows through the lifecycle of each home within the property portfolio (from land and development through to asset management and treasury).  This is not only a regulatory requirement, but provides the strong foundations needed to create well-informed strategies and optimise opportunities. 

Knowing your properties as assets

Since 2015, the Regulator of Social Housing has required housing providers to maintain an accurate and up to date Assets and Liabilities Register (the “Register”). There is not an exhaustive list of requirements for this Register as it is widely recognised that this will vary according to each housing provider.  However, every housing provider has a portfolio of homes, and possibly land, garages and commercial units and therefore every housing provider requires a thorough and granular understanding of the legal ownership and responsibilities associated with them.

Since 2017,  HM Land Registry have created a database and upload a very large spreadsheet, every month, that confirms land and property legal ownership for all public bodies(including, but not limited to, housing associations, local authorities and charities).

For those who have colleagues who can quickly unravel spreadsheets, this will be of interest and is a positive first step forward to understand legal ownership.  However, a couple of cautionary thoughts:

1. HM Land Registry information is purely a snapshot in time, and therefore this must be a ‘live’ Register as housing providers continue to build, purchase, lease, sell and borrow against properties and land
2. This is not a quick solution to legal ownership. It is critical to ensure that this legal ownership information, in its most basic form, does not become a silo dataset/system/software. It must and provide transparency across the organisation to support the simplest of queries to the most complex.

Careful planning is required to ensure that the time and resource investment in obtaining the legal ownership of all land/property/garages and commercial units is not wasted.  The most prominent benefit of this transparency on legal ownership, if created, collated and maintained robustly, is that it becomes a reliable ‘single source of truth’ that will strengthen strategic decisions. 

Building robust foundations

Transparency on legal ownership is a first step.  To be able to provide a holistic overview of the property portfolio, this needs to be more than just a dataset. Somewhat more fundamentally, the legal ownership will be the start of a thread that must follow the lifecycle of each property.  This thread should flow through:

1. Purchase/Land
2. Development
3. Leasing
4. Management
5. Demolition
6. Sales
7. Secured loans/bonds

Each of the steps above will have associated documentation which will impose legal and planning obligations on the housing provider and will require evidence of formal compliance.  Capturing this data and documentation at source will create a more comprehensive register and therefore it is important to assign responsibility to those who are responsible for these steps and monitor the progress.

Robust and well-informed strategies become an immediate benefit as a result, allowing housing providers to strengthen the confidence and trust in customers and stakeholders. This effect  becomes more pronounced if the thread is strengthened with additional housing management and energy efficiency data and documentation, to name a few.

Benefits of a robustly governed property legal thread

Responsibility of the Register often sits with the Finance teams – with a focus on the financial liabilities of the housing provider.  However, should this sit within the Governance/Legal teams to create a more holistic overview of the homes and accountability to Board to demonstrate regulatory compliance?

Wherever this sits, robust processes and procedures on each housing provider’s property portfolio will enable holistic strategies across the organisation with matters such as financial management, health and safety and consumer standards. Integrating siloed systems, connecting workstreams and strengthening processes and procedures that support building the thread and tie together the lifecycle of the homes as assets will inevitably help housing providers strengthen the confidence and trust with customers and stakeholders.

There is an opportunity here for housing providers to integrate this thread to strengthen the property asset base – demonstrating that understanding the depths and breadths of your property portfolio is more than just a regulatory tick-box, it is business critical and will strengthen the trust and confidence in customers and stakeholders.