The Charity Commission is investigating potential conflicts of interest at a homelessness charity locked in a financial dispute with its landlord, the regulator has announced.
It opened a statutory inquiry into Noble Tree Foundation Limited, a London-based charity that provides social housing around the country, on 2 October.
According to figures published by the Commission, the charity’s income grew from £3,220 in the year to June 2019 to £4.24m in the period to December 2021.
The Commission told Civil Society that it “first engaged proactively” with the charity in March 2022 after identifying a significant increase in its reported income”.
It later uncovered further issues around “related party transactions, including potential unauthorised trustee benefit and unmanaged conflicts of interest”.
This comes after media reports said the charity had withheld nearly £1m in rent over millions owed by its landlord, Home Reit, to cover essential repairs and insurance.
The inquiry
The inquiry will look at whether the charity has enough trustees willing or capable “of managing it in accordance with its governing document” and any “conflicts of interest and connected party transactions”.
It will also examine “the extent of the unauthorised trustee benefit and whether the charity has suffered a financial loss as a result of any misconduct and/ or mismanagement”.
The regulator said it might extend or amend the scope of its inquiry if additional regulatory issues arise.
Reports of money owed in rent
In February, the Guardian reported that Noble Tree Foundation Limited owed nearly £1m in rent to its landlord, Home Reit.
Matt Fearnley, the charity’s chief executive, then told the Guardian that he had withheld several months’ worth of rent due to “£3.2m owed for repairs and insurance that have not been forthcoming”.
He said: “The model hasn’t worked for the tenants. We’ve got properties that are unfit for people to live in and we’ve had to shut some of them down because they are just not right for anybody, let alone a vulnerable person.
“We’ve been promised an amount of money that hasn’t been delivered. We pay for refurbishments as best as we can, but we can’t pay for everything. Tenants are living in substandard accommodation.”
Third Sector then reported that the charity was “owed £6m by Home Reit to cover essential repairs and rent contributions and would continue to withhold rent until the situation had been resolved”.
Civil Society has contacted Noble Tree Foundation Limited for comment.
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