Three executives installed at ‘persistently’ non-compliant lease-based provider

The Durham-based provider, which houses vulnerable adults, was initially found non-compliant with the regulator’s governance and financial viability standards in August 2021. It had also failed to demonstrate compliance with the Rent Standard.

Since then, the regulator said it had engaged intensively with Auckland to address the non-compliance, but the provider has been “unable or unwilling to do so”.

The RSH said it lacked assurance that Auckland has effective governance arrangements in place, an appropriate business planning, risk and control framework, or that it is complying with the Rent Standard. 

The landlord has failed to demonstrate that it is appropriately managing actual or potential conflicts of interest, according to the regulator. 

Auckland’s latest annual accounts are also more than six months overdue.

Harold Brown, senior assistant director for investigation and enforcement at the RSH, said: “Auckland has breached our standards across a range of areas, and we have serious concerns about its governance, business planning, and approach to setting rents. 

“Auckland has persistently failed to address these issues, so we are now taking enforcement action to make it improve.

“This sends a message to social landlords that, when they cannot or will not return to compliance with our standards, we will use our powers if necessary to make them put things right.”

Auckland is able to appeal against the enforcement notice in the High Court.

The provider is a lessee of two real estate investment trusts (REITs) active in the sector: Triple Point and Civitas.

In a filing, Triple Point said it has 30 properties leased to Auckland, which represents 4.6 per cent of the REIT’s rent roll and are valued at £30.8m.

Auckland owes £41,064 in rent to Triple Point, as of the end of March 2023, but the filing said it expects this to be “resolved shortly”.

In a filing, Civitas said it “notes” the regulator’s enforcement notice. As of the end of September last year, Auckland represented 15.9 per cent of Civitas’ annual contracted rent roll.

Auckland has yet to respond to a request for comment.