Civitas Social Housing PLC said it is in active dialogue with the management team of First Priority Housing Association following a regulatory notice but will no longer sign any new leases with the association until the present situation is resolved.

The housing association had been placed under a grading review by the Regulator of Social Housing in late January with an investigation underway regarding its compliance with the Governance and Financial Viability Standard.

The social housing-focused real estate investment trust leases 45 of its 403 properties to First Priority and noted that all rents were received in full from the tenant as at Jan. 31. First Priority's inability to meet lease obligations is not expected to impact Civitas' dividend targets.