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  • Writer's pictureRealFacts Editorial Team

Home REIT Strikes Deal to Reclaim Leases Amid Tenant Probe

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Home REIT, a property investor embroiled in controversy, has announced a significant agreement to reclaim hundreds of leases from one of its major tenants, Big Help, which is currently under investigation by the Charities Commission. This move affects around 600 properties, roughly 30% of Home REIT’s total portfolio.

Big Help, based in Liverpool, was once a significant tenant for Home REIT. However, relations deteriorated over the past two years, leading to the current situation. In January 2023, City A.M. reported that Big Help was withholding rent due to the poor condition of the provided housing, prompting Home REIT to negotiate a rent relief deal.

In its market update, Home REIT stated that reclaiming the leases would enable it to "collect the underlying income from these properties, increasing rent collection and facilitating asset management opportunities." The company plans to appoint various property managers to handle day-to-day management and rent collection for these properties.

Home REIT has faced multiple scandals since 2022, significantly impacting its rental income. The firm reported collecting only 11% of total billed rent from September to April. In response, Home REIT terminated its investment manager Alvarium and appointed AEW to stabilize operations.

Big Help, led by former Labour councilor Peter Mitchell, was responsible for nearly 20% of Home REIT’s rental income before rent withholdings began. The Charity Commission's investigation into Big Help focuses on a "significant increase in its reported income" and concerns about "trustee decision making, potential unauthorized trustee benefit, and unmanaged conflicts of interest." Big Help has expressed disappointment with the investigation and has cooperated fully, exploring legal avenues to address the issues raised.

Home REIT is also under scrutiny from the Financial Conduct Authority, with the Serious Fraud Office opening inquiries into the firm. The SFO has not confirmed or denied any ongoing investigations.

The lease reclamation deal is part of Home REIT’s broader efforts to recover from its recent troubles and restore financial stability.

The numerous challenges facing Home REIT, including tenant disputes, regulatory probes, and financial instability, are likely to cause warranted wariness among investors. These issues highlight significant risks and uncertainties that could impact the company's future performance and credibility.


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