Home REIT was warned of ‘slum conditions’ in October in row between tenants and property vendor

Home REIT was warned of “slum conditions” in its property portfolio as early as October but failed to publicly acknowledge the scale of the issues until yesterday, City A.M. can reveal.

Bosses at the scandal-hit former FTSE 250 firm were warned of a breakdown in care and widespread dilapidation during a row between charities renting the homes and a property ‘vendor’ called Christopher Downing, whose firms sold property to Home REIT, City A.M. has learned.

In a letter to Home REIT, seen by City A.M., the whistleblower raised concerns over the state of some properties and said the provision of care to vulnerable tenants had effectively broken down.

“Some of your tenants are in slum conditions, some without basic services, i.e. no heating, no hot water, damp, water ingress, poor roofs and lack of basic maintenance carried out,” the letter said.

Home REIT chiefs were warned they needed to act and had a “responsibility to inform your insurance brokers of void/uninhabitable properties”.

“I stress, should one of these properties cause harm to a tenant you as an organisation, knowing all, are responsible,” the letter said. 

However, City A.M. understands that the firm failed to respond to the whistleblower’s letter. Home REIT did not respond to a request for comment.

News of the whistleblower letter comes after Home REIT revealed the scale of its financial troubles yesterday and said it was aware that 25 per cent of its portfolio needed refurbishment at a cost of around £15-20m. So far, Home REIT said it has only inspected 67 per cent of its portfolio as part of a wider property audit.

The whistleblower warnings over dilapidated housing came in October amid an ongoing dispute between three of Home REIT’s charity tenants and firms run by Christopher Downing, who they claim failed to provide them with sufficient cash for refurbishments.

Home REIT has repeatedly insisted that responsibility for refurbishments lies with the property “vendors”, who it said yesterday “are contractually responsible for the refurbishment of properties”.

A contract for one portfolio of properties between Karla Asset Management – a firm owned by Downing – and Home REIT, and seen by City A.M., states that the seller of the properties should refurbish them “at its own cost and expense” to a standard that would achieve an energy performance certificate rating of C.

However, three charities – LTG Vision, Noble Tree Foundation and Mansit Housing – told City A.M. they did not receive sufficient cash for refurbishments, leaving them with run down properties and unable to house vulnerable groups.

After being approached by City A.M. for comment, Liverpool-based LTG Vision, said in a statement: “At present the aggregator did not carry out the required refurbishment across the whole LTG portfolio. With that, LTG will continue to work alongside Home REIT and partners to rectify this.”

Lawyers for Downing, however, rejected the allegations and said that “significant” payments for rent and refurbishment were “paid clearly in full” to the charities.

“It was subsequently the responsibility of the social renters to carry out the renovation works and to cover any rent support,” his lawyers said.

They added: “Our clients suspect, due to the complaints about the conditions of the properties, that the funds were not properly used for refurbishment work.”