Noble Tree Foundation - Case Update

John Dickinson and Joseph Colley of CBW Recovery, the joint administrators of Noble Tree Foundation Limited, have revealed how onerous long-term leases on a number of unfit properties were a prominent cause of the charity’s financial distress.

The charity provided housing and social care to vulnerable people in the UK, including survivors of domestic violence, ex-service personnel, refugees and mother & baby support.

It had built a portfolio of over 220 properties comprising around 470 units providing circa 850 bedrooms which spanned from Sunderland in the Northeast to Greenwich in southeast London by the time it entered administration on 3 June.

The properties are let on a 20+5 year basis, which was a significant reason for the charity’s issues. Many of the properties were of such sub-standard condition that they were unfit to house tenants, which ultimately resulted in the charity withholding rents to explore settlements with landlords to pay for the necessary refurbishments. This led to disputes over the arrears and compensation for the costs of refurbishment, the most significant being with London-listed landlord Home REIT. The directors estimate that the charity has claims of circa £12 million against freeholders for not providing sufficient funding for refurbishment work and capital expenditures, and the consequential loss of rental income.

Noble Tree was also subject to a statutory inquiry from the Charity Commission due to a significant increase in the charity’s income (from £3,000 in 2019 to £9.7 million in 2022) following a strategic growth strategy which included taking on a portfolio of properties from investor landlords. This resulted in the appointment of an Interim Manager in March 2024 and the freezing of the charity’s banking facility, greatly reducing its ability to negotiate rental arrears.

A landlord issued a winding-up petition in May 2024, followed by the appointment of John Dickinson and Joseph Colley of CBW Recovery as joint administrators on 3 June.

The charity has continued to trade in administration and employees have been retained (although their contracts have not been adopted) while the joint administrators have worked to restructure the property portfolio. The leasehold portfolios of Home REIT (304 properties) and Home Long Income Fund (80 properties) have been successfully assigned back to the landlords.

The joint administrators have also met with the Charity Commission and obtained its files to commence statutory investigations. The files of Noble Tree’s accountants and solicitors have also been uplifted, and images of the charity’s servers have been taken.

The joint administrators have been assisted by Hilco, TDM, BDB Pitmans, Fulcrum, CAPA and Mishcon De Reya. Their report and proposals can be found HERE.