HCA admonishes nine for late accounts

The Homes and Communities Agency (HCA) today issued regulatory notices to the nine organisations (see box below) for failing to get signed financial statements to the regulator within six months of their latest accounting period.

A tenth association – Sustain (UK) – was issued with a notice for raising rents on its social properties by 5% on 1 April 2015 and for governance problems. The notices mean the 10 landlords do not comply with varying regulatory standards.

The HCA said Sustain did not comply with the rent standard because it had raised its rents by 5% rather than 1% above the Consumer Price Index (CPI) measure of inflation, which would have given an increase of 2.2%. It also said formula rents had been calculated based on an average property value rather than on individual property values as required by the rent standard.

The regulator also said Sustain did not meet the governance and viability standard. It did not have any independent non-executive directors and each of its executive directors had interests in businesses that transacted or had transacted with Sustain.

The HCA said Sustain had identified some steps to address the lack of independent non-executive directors but the HCA did “not have sufficient assurance” that the organisation’s governance complied with legal and regulatory requirements.

It also said Sustain had identified the need to produce a revised business plan, but had not yet produced one compliant with the current standard and with reasonable assumptions about the future rent regime.

The notices come a fortnight after Julian Ashby, chair of the HCA regulation committee, told small associations to notify the regulator if they will be unable to cope with the rent cut announced in the Budget.

Sustain, Almshouses of William & Rebecca Pearce, Harman Atwood for Almshouses and Curates House, and the Butlin & Elborow Housing Trust declined to comment.

Bill Hitchens, a trustee of Dame Bertha Lopes Almshouses, which has one property, said the organisation was having difficulty changing the signatories to its bank account – and therefore getting information for its accounts – having lost its treasurer and secretary.

UPDATE: 12.08.15 9.13am

This article has been amended slightly from an earlier version.