Coronavirus – Advice for governing bodies
This guidance is to support RSL governing body members during the Coronavirus pandemic. It covers the things that RSLs have asked us about. We will update this guidance as relevant issues are raised with us and to take account of any changes.
The governing body is unable to meet or achieve a quorum
If you are unable to meet or achieve a quorum because of restrictions on public gatherings, governing body members being unwell or self-isolating, or shielding a vulnerable person you should:
- Follow the Scottish Government advice: ‘Coronavirus Covid-19 and Social Landlords’ which states:
- you should consider holding meetings remotely using teleconferencing or videoconferencing;
- you can temporarily amend your standing orders and delegated authorities to allow you to make essential decisions if your governing body cannot meet or cannot achieve a quorum. If you decide to do this you should get appropriate legal advice; and
- maintain a clear record of the use of delegated powers to allow you to monitor and evaluate the use of these powers and the decisions being made.
- You can also read the advice the Scottish Federation of Housing Associations (SFHA) has issued to its members ‘COVID-19 Briefing Practical governance advice’.
RSL governing body members falling below the minimum number required.
If governing body membership falls below the minimum number of people required in your organisation’s constitution you should report it to us as a notifiable event and refer to your constitution.
Your constitution should set out how this must be managed. The model rules state that in these types of circumstances, landlords can operate as normal for two months. After this, the only powers the governing body has are to appoint new members. Governing bodies can appoint co-optees or fill casual vacancies to bring their numbers up. We know that this could be challenging at this time.
We will work with you to find a solution.
RSL is unable to update its constitution at its next AGM
We know that you may be concerned that you may be unable to update your constitution at your AGM this year due to the impact of Coronavirus. We have been asked about delaying updates to constitutions until AGMs in 2021.
Clearly your focus during the Coronavirus pandemic is on continuing to deliver services in these very challenging circumstances and this may impact on your capacity and ability to update your constitution to comply with the new Regulatory Framework. We recognise that it may not be possible for you to update your constitution at this year’s AGM. Please let us know if you are unable to do so and when you think you will be able to make the necessary changes to your constitution.
RSL is unable to hold its AGM
We know you may be concerned that you might not be able to hold your AGM on time this year because of the impact of Coronavirus and the restrictions on social gatherings.
Your constitution should set out the arrangements for your AGM including when and how it should be held. The Model Rules say that the AGM should be held within 6 months of the year end. In terms of how the meeting should be held, the specific wording of the Model Rules require a ‘physical’ AGM to be held and does not appear to allow RSLs to hold a virtual meeting using remote technology. This means that RSLs who have adopted the Model Rules may not be able to hold their AGM while the restrictions on public gatherings remain in place.
We recognise that while the restrictions on social gatherings remain in place some RSLs may have to delay holding their AGM which will mean they won’t comply with the provisions in their constitution about holding their AGM within 6 months of the year end.
Our advice to RSLs is to take appropriate advice to guide your decision about your AGM. If having taken advice you decide you will be unable to hold your AGM on time please get in touch with us to let us know by submitting a Notifiable Event. If you have been unable to hold your AGM on time because of the Coronavirus you should arrange your AGM for as soon as possible after the restrictions have been lifted.
Not being able to hold your AGM within 6 months of the year end due to Coronavirus shouldn’t mean your accounts can’t be approved. RSLs which are Registered Societies are not required by the Co-operative and Community Benefit Society Act 2014 or by the Model Rules to have their accounts approved at an AGM. RSLs which are Limited Companies are similarly not required by the Companies Act 2016 to have their accounts approved at an AGM. So if you can’t hold your AGM you may still be able to approve your accounts on time. It is important that you take your own professional advice about how to appropriately approve your accounts, particularly if you have not adopted the Model Rules and might have different arrangements set out in your constitution.
RSL cannot complete its accounts on time
We are aware that some RSLs are experiencing difficulty arranging for their accounts to be audited due to the impact of Coronavirus.
Section 70 of the Housing (Scotland) Act 2010 (the 2010 Act) requires RSLs to provide us with a copy of their accounts and auditor’s report within 6 months of the year end. We recognise the very challenging circumstances RSLs are operating in and that RSLs may experience difficulty meeting this statutory timescale due to Coronavirus. We have therefore written to the Scottish Government to ask it to extend the timescale for RSLs submitting accounts to us and we will update this guidance when we receive a response.
So, for now, the legal obligation to deliver the copy of accounts and auditor's report to us remains in place. RSLs should if at all possible ensure the accounts and report are provided on time. If you are experiencing difficulty and are concerned your accounts may not be completed on time please contact us.
In addition to the requirement to provide us with accounts and auditor’s report, some RSLs have other accounting obligations. Charitable RSLs are required to submit their annual accounts to OSCR within 9 months of the year end. OSCR has published guidance for charities on the impact of Coronavirus including on their accounting obligations, you can read the OSCR guidance here.
RSLs which are Limited Companies are required to submit their annual accounts to Companies House within 9 months of the financial year end. Companies House has published guidance for companies who are unable to file their accounts on time due to Coronavirus. You can read the Companies House guidance here.
RSLs which are registered societies are required to send their accounts and annual returns to the Financial Conduct Authority (FCA) within 7 months of the financial year end. The FCA has published guidance for societies on the impact of Coronavirus on their accounting obligations. You can read the FCA guidance here.