Charities forced to leave a building owned by Hammersmith & Fulham Council in west London say they will are considering complaining to the Charity Commission about the amount of money they received as part of the deal.
Sixteen charities were forced to leave Palingswick House last year after the council sold the building to be used as a free school.
The building had been leased from the council by another charity, Palingswick House Limited, which acted as landlord.
PHL agreed to surrender its lease and was granted another by the council on a building in nearby Shepherd’s Bush.
Tim Judge, a trustee of PHL, said the charity received a payment of about £330,000 from the council. Of this, almost £72,000 was passed to the 16 charity tenants.
Judge said the Charity Commission had approved the arrangement.
"PHL was not evicted," he said. "We chose to surrender our lease because the cost of fighting an eviction did not seem to be worth the trouble.
"The council agreed to provide further resources to allow us to set up elsewhere. But it's not really correct to describe that as compensation. It was a goodwill gesture."
He said the funding was given to PHL to develop its new building in Shepherd's Bush. "We calculated the money we needed and gave the rest as ex gratia payments to the charities in Palingswick House, proportionate to the square footage they'd occupied," he said.
Tenants received between £17,800 and £879 each. Of those tenants, six have moved into the new building.
Phil Cooper, media officer at the Hammersmith & Fulham Refugee Forum, which represents several former tenants, said charities understood that the money given by the council was intended to compensate them.
He said many charities had lost out financially because they had to move, and needed the funds from the council to continue to be viable.
"There’s a question about why PHL is securing its own future," he said. "It’s there to manage offices for charities.
He said the organisations were considering writing to the Charity Commission to ask if it was concerned about the arrangement.
A council spokesman told Third Sector: "The council paid several hundreds of thousands of pounds of compensation to Palingswick House Limited and it is up to it to distribute the money as it deems fit."