A social housing charity has gone into administration following a dispute with its landlord about poor property conditions.
The Noble Tree Foundation is a social housing charity with 470 housing units in England, providing housing and support to more than 850 ex-service personnel, vulnerable adults and asylum seekers.
The charity has appointed John Dickinson and Joseph Colley of CBW Recovery LLP as joint administrators, after a dispute about property conditions with its landlord, the real estate investment firm Home Reit.
The charity estimates that refurbishments to bring the properties up to standard would cost more than £1m.
A statement from the NTF’s administrators said: “Considerable strain on cashflow 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 has estimated that the cost of these repairs would amount to more than £1m, the administrators said.
NTF told Third Sector in March last year that Home Reit owed it £6m to cover essential repairs and rent contributions. The charity said at the time that it would withhold rent until the dispute had been resolved.
A number of other organisations have also withheld rent from the firm in the past, including the Liverpool-based community charity the Big Help Group. A recent statement from Home Reit showed that the Big Help Group surrendered its leases on more than 600 properties with the firm at the end of May this year.
NTF is a tenant of 143 of Home Reit’s properties, according to a statement from the firm.
The charity is the subject of an ongoing Charity Commission inquiry, which was opened after its income jumped from £3,220 to £4.2m in just a year – an increase of more than 130,000 per cent.
NTF’s most recent accounts show a total income of almost £9.8m and expenditure of just under £8.9m in the financial year to the end of November 2022. The charity only had one member of staff during this period, the accounts show.
The statement from Home Reit described NTF as a “non-performing tenant” and said the firm was working closely with the charity’s administrators to arrange a “comprehensive handover of its tenancies”, which would be transferred to Home Reit.
The statement said that underlying residents of the properties “will not be impacted” by the surrender of its tenancies. The firm said it plans to either relet the properties to a social use provider or appoint a property manager who would be responsible for day-to-day management and rent collection.
John Dickinson, insolvency partner at CBW Recovery, said: “We are continuing to trade the charity while we work with the landlords to negotiate exits from leases and, hopefully, to then make a distribution to the unsecured creditors.
“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.”