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Developer linked to lease-based providers faced dissolution warning over late accounts
A specialist developer linked to non-compliant lease-based supported housing providers was briefly threatened with dissolution this week for failing to file its accounts on time.
Fairhome Group was hit with a ‘first Gazette’ notice by Companies House on Tuesday, but a day later a notice appeared on the page stating that no further action will be taken.
A first Gazette notice is a warning that a company could be struck off the Companies House register.
Fairhome’s business involves building and converting properties into specialist supported housing, finding housing associations willing to take them on under long-term lease deals and then selling them on to investors for a fee.
It listed registered providers Westmoreland Supported Housing and Encircle Housing as “significant related parties” and acquired control of Hilldale Housing Association via a charitable subsidiary in November last year.
All three providers have been declared non-compliant by the Regulator of Social Housing.
Fairhome blamed the coronavirus pandemic for the delay in filing its accounts, which were more than two months overdue according to Companies House, and said it submitted the report on Monday.
The first Gazette notice said: “The Registrar of Companies gives notice that, unless cause is shown to the contrary, the company will be struck off the register and dissolved not less than two months from the date shown above.
“Upon the company’s dissolution, all property and rights vested in, or held in trust for, the company are deemed to be bona vacantia and will belong to the Crown.”
A follow-up notice Wednesday said “cause had been shown” that Fairhome “should not be struck off the register and accordingly the Registrar is taking no further action”.
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A spokesperson for Fairhome said on Monday: “The first Gazette notice was in relation to our annual audited accounts being overdue.
“Our accounts will be filed today and we expect Companies House to update their records accordingly shortly.
“The delay in filing was due to the impact of the pandemic.”
Fairhome’s accounts for the year up to 30 July 2020 were due by 30 April 2021.
Its previously posted accounts for the 12 months to 31 July 2019 reported a £1.9m loss, down from a £15.1m profit the previous year.
During that period, it gifted Westmoreland a £4m interest-free loan that does not need to be fully repaid until 2034.
Westmoreland, which was the fourth housing association ever to be handed a ‘G4’ grading for governance by the English regulator – the lowest available – admitted in its own accounts for the 12 months up to September 2019 that it faced “material uncertainty” over its ability to stay afloat.
In total, Fairhome donated £17m to other companies in the year to July 2019, including £10.4m for its sister company Valorum Care Group, which provides care to people living in supported housing. The loans have no fixed repayment terms and no interest has been charged.
Valorum reported a loss of £6.7m in the year up until July 2019, having been set up in late 2017.
Fairhome’s accounts from last year list Westmoreland, Encircle and Hilldale’s parent Change Housing as “significant related parties”, meaning they share directors with Fairhome or that Fairhome directors “exert significant influence”.
Since Fairhome was established in 2014, it has delivered more than 6,000 units of accommodation for vulnerable adults.
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