A homelessness charity under investigation has gone into administration after a dispute with its property fund landlord.
Noble Tree Foundation reportedly previously refused to pay rent to Home Reit over the alleged condition of the investor's properties.
The charity entered into administration on Monday, with CBW Recovery LLP being appointed as administrators.
This comes after a separate charity, Big Help, recently surrendered its leases on over 600 properties following a fall out with Home Reit.
Lease on 143 properties surrendered
Founded in 2003, the social housing charity provided homes and support to over 850 former service personnel, vulnerable adults,and asylum seekers.
In a statement regarding the administration, Home Reit said that the charity is a tenant of 143 properties in its portfolio and represents around 7% of rent demanded in April.
Home Reit said the occupied properties leased by Noble Tree Foundation are let to private rented sector tenants on assured shorthold tenancies.
“Following the surrender of Noble Tree's leases, the tenancies will transfer to Home Reit,” it said.
“This will enable the company to collect underlying income from the properties, increasing rent collection and facilitating other asset management activities.
“In line with the company’s investment policy to stabilise the portfolio and increase rent collection, the company will either relet the properties to a social use provider or appoint a property manager, who will be responsible for the day-to-day management and rent collection.”
Charity estimates £1m repairs needed
A statement from CBW Recovery LLP reads: “In 2019, the charity implemented a new growth plan in line with its goal to help people nationwide.
“The charity committed to taking on new leases. However, considerable strain on cash flow resulted due to the required capital outlay in bringing some of the properties up to serviceable condition which resulted in rent being withheld, leading to disputes over the arrears and compensation for the costs of refurbishment.
“Notwithstanding the lost income, the charity estimates the cost of these repairs to be in excess of £1m.”
It notes the Charity Commission also opened a statutory inquiry into the charity, which included the appointment of an interim manager.
John Dickinson, insolvency partner at CBW Recovery, said: “We are continuing to trade the charity whilst we work with the landlords to negotiate exits from leases and, hopefully, to then make a distribution to the unsecured creditors.
“We have previous experience in these situations and from initial discussions with the landlords, we are confident that a positive outcome can be reached.
“Our absolute priority is maintaining the welfare and living conditions of the charity’s vulnerable tenants. We are working alongside the charity’s own staff and property management agents to deliver this. We thank the staff for their ongoing assistance and commitment to the charity in delivering its objectives.”
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