Watford Borough Council is threatening to sue a charity for more than £500,000 in an unseemly property dispute.

It is claiming the money from Age UK Hertfordshire (formerly Age Concern) to pay for wear and tear on two council-owned office buildings used by the organisation.

The charity, which provides vital services such as home help, benefits advice and IT training, claims it will be forced “into liquidation” if the claim is not dropped.

At the centre of the dispute, details of which were leaked to the Watford Observer this week, are two council-owned office buildings in Exchange Road and The Harebreaks.

The charity took over both buildings from Watford Old People’s Welfare Association and Watford Old People’s Housing Association in 2006 and agreed a combined £193 annual peppercorn rent agreement with the council.

Relations appear to have soured, however, when negotiations to move the charity’s operations exclusively to The Harebreaks fell through for a second time in October.

Documents suggest the charity was offered a ten-year free rent agreement but reacted angrily to suggestions that it should meet £450,000 in repair costs.

As a result it has opted to remain exclusively at Exchange Road. Legal arrangements for this were not formalised after negotiations for a tenancy agreement broke down.

The following day (October 5) the council wrote to charity trustees demanding £500,000 (plus VAT) to pay for “dilapidations” to both buildings. Legal action is now pending.

Age UK Hertfordshire Chief Executive Marion Birch detailed the charity’s furious response to the council’s “aggressive and insensitive” actions in a letter to Mayor Dorothy Thornhill last month. In it she claimed to have been “harassed” by the council and its solicitors and pleaded for “good sense and humanity to prevail”.

She wrote: “If this situation continues then both organisations will now be spending large amounts of money on legal fees.

“If the council follows its current course of action… the charity would go into liquidation.” The impact of that, she warned, would be felt not only by the charity’s 160 staff and 650 volunteers, but the 4,000 plus elderly people it helps every week.

Mrs Birch, who is also chairman of Croxley Green Parish Council, continued: “We did consider meeting with you again but we feel that your proposals are so unacceptable that nothing will be achieved. For some reason, a member of your property department has decided to wage a campaign against us. He accuses Age UK of neglecting these properties but all we are guilty of is naively trusting the council to support us.”

She also criticised council staff for circulating its original written demand to trustees to “addresses that were not appropriate to the confidential nature of the letter eg previous work addresses, current work addresses or places where they volunteer.”

Watford Borough Council managing director Manny Lewis said: “Age UK’s position in both properties has never been regularised – this is why there is a set of issues over its legal responsibilities.

“It has benefited from an annual rent of £143 for Exchange Road and a rental of £50 per annum for Harebreaks. Age UK has now said it wishes to hand back the Harebreaks building but stay in Exchange Road.

“However neither building has been kept in good repair and the council is in discussion with Age UK over the repairs that are needed and the need to arrive at a new lease at a fair market rent. A meeting is being scheduled with Age UK next week.”