The Regulator of Social Housing (RSH) has published a Regulatory Notice (RN) for Auckland Home Solutions CIC, a not-for-profit lease-based provider which is a subsidiary of The Social Housing Family CIC. Auckland owned and managed 817 units of social housing at 31 March 2021. As Auckland owns less than 1,000 homes it does not currently have a published Regulatory Judgement (RJ).
The RSH has found Auckland to be non-compliant with its Governance and Financial Viability Standard. Key aspects of the RSH’s findings are:
- A concentration of risk in relation to long-term, low-margin, inflation linked leases as a single source of finance
- A business plan which is not based on appropriate assumptions
- Inadequate stress testing
- A lack of financial capacity to cope with the crystallisation of downside risk
- Lease transaction arrangements involving companies linked to Auckland’s directors and its shareholder
- A lack of assurance on the governance arrangements with Auckland’s unregistered parent company and
- A lack of assurance that Auckland’s properties meet the criteria of Temporary Social Housing or Specialised Supported Housing, calling into question compliance with the Rent Standard.
All of the RJs, RNs and GUR listings published by the RSH can be viewed on the RSH’s website here.