A homelessness charity has gone into administration after a lengthy standoff with its property fund landlord in which it refused to pay rent over the condition of its properties, some of which had black mould and leaking ceilings.
Home Reit, a London-listed real estate investment trust, has been in dispute for more than a year with Noble Tree Foundation, which leases 143 properties from the trust’s portfolio, after complaints about property repairs.
Home Reit, whose shares were suspended last year, said in a stock exchange statement that Noble Tree Foundation, which represents 7% of rent demanded in April, has entered into administration and was not paying rent.
The charity had withheld several months’ rent from Home Reit and last year claimedit was owed millions of pounds for repairs and insurance that have not been forthcoming. The charity said some properties were “unfit for people to live in” and issues included black mould and leaking ceilings.
The Charity Commission launched a statutory inquiry into Noble Tree last October over alleged conflict of interest and related party transactions.
Noble Tree has been contacted for comment.
Home Reit was established in 2020 as a property fund tackling homelessness and had ambitions to grow into a £1bn business and take 10,000 people off the street. It had 1,920 properties leased to registered charities and housing associations on leases ranging from 20 to 30 years as of the end of April.
Homes leased by Noble Tree are let to private rented sector tenants and, after the surrender of the charity’s leases, the tenancies will transfer to Home Reit so it can collect income from the properties.
The company said it was working closely with Noble Tree’s appointed administrator, CBW Recovery, to arrange the surrender of the charity’s leases and a handover of its tenancies. The company said residents of the properties would not be affected.
Home Reit said it would either re-let the properties to a social housing provider or appoint a property manager, which would be responsible for the day-to-day management and rent collection.
CBW Recovery said that, after the presentation of a winding-up petition from one of the landlords, it had been approached by the trustees and the company was placed into administration.
John Dickinson, an 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.”
Dickinson said CBW’s “absolute priority is maintaining the welfare and living conditions of the charity’s vulnerable tenants”.
In May, Home Reit said it had agreed with another tenant, Big Help, for the surrender of its leases on more than 600 properties that the Liverpool-based charity had leased, equating to about 30% of the company’s portfolio by number of properties. These lease surrenders completed on 28 May.
In a separate development, Vistry Group, one of Britain’s biggest housebuilders formerly known as Bovis Homes, is to sell a portfolio of 1,750 new-build homes to the private equity firms Blackstone Real Estate and Regis Group in a £580m deal. The portfolio will be managed by the private rented housing firm Leaf Living, which is backed by funds managed by Blackstone and Regis.
The portfolio, which is concentrated in the south-east of England, consists of 1,750 homes across 36 Vistry developments. The first completions are expected by the end of June, with the majority of homes expected to complete within the next two years.
Vistry is in the process of selling off properties from its housebuilding division as the company moves towards focusing on its partnerships business, which builds affordable housing for government and non-profit partners.
