29.02.12 Stop ‘opaque’ charges, says London Assembly
In the most hard-hitting report in years on the property management business, the London Assembly says half a billion pounds in service charges is being spent every year by Londoners in a business that is overdue for reform. Our news report and the full Assembly report can be read here after the mid-night news embargo
29.02.12 Visit to Town and City Management Limited based in Darlington
Today we visited Town and City, whose first year of LKP accreditation for non-retirement developments is coming to an end, and they are now seeking to be re-accredited. There are some recognised issues that need addressing in their RTM procedures, and we will be including some of this in our future accreditation paperwork. These will continue to be a work in progress even when we achieve United Kingdom Accreditation Standard.
We had an in depth discussion concerning an ex Peverel development, Constantine Court in Middlesborough, which achieved the right to manage more than 18 months ago, and appointed Town and City as its new agents.
Recently, the development has suffered from divisions of opinion on important subjects, and the two leaseholder directors and one from the managing agent, were under the number really needed to spread fairly the workload and achieve consensus, and ensure decisions taken are wise ones. Following our meeting with the managing agent, we went to take part in what became a serious mediation exercise with 37 of the residents present, a lot of whom were brave enough to express their concerns. After one and half hours we left in the knowledge that: the number of those prepared to act as directors for 6 months on a rolling schedule was increased to seven and all the issues that had been causing the divisions had been brought well out into the open. The residents were a lot more knowledgeable about the duties of the RTM company, the house manager, the managing agent and general legal responsibilities, than before we arrived.
We look forward to being kept informed of progress in the future and will write further on the subject when confidentiality allows as events at this development may well mirror those elsewhere.
28.02.12 Nottingham based managing agent enjoying success with Peverel RTM’s
LKP this morning met two senior directors from Walton and Allen for a very positive and lively discussion regarding their management activities in the non retirement leasehold sector in the Nottinghamshire area. Walton and Allen have been extremely successful in terms of wresting control from Peverel in more than a dozen blocks in the area, with two going to the LVT for determination. They are very keen to repair buildings that have been allowed to fall into disrepair, and to ensure service charge arrears are fully cleared to protect the financial health of RTM’s going forward.
Walton and Allen do appear to demonstrate the qualities of transparency and integrity that are required to become accredited, and they are now investigating the criteria contained within the Accreditation Scheme for Managing Agents and considering whether they wish to become further involved with LKP. They resigned from ARMA after being a member for six months. We will post further on this in due course.
This evening we met the two directors of Urban Living Property Management – another managing agent who have been borne out of leaseholder frustration. Peter and Paula Twist totally understand the requirements for transparency, as they have been on the receiving end of the opposite side of the spectrum, and took control of their own building several years ago. They now manage 6 blocks and are looking to grow their business in the Leeds/Nottingham area. They have entered the accreditation process and we will be checking their paperwork and taking up references over the next few days.
In the recent past they have assisted with several RTM’s. Paula has a legal background, and Peter’s is in Building Control and NHBC, so they are ideally suited to a property management career. See www.ulpm.co.uk for further information.
Peverel sale update
The latest statement from Simon Appell of the Administrators Zolfo Cooper is now available for all to see on the CarlEX website, carlex.co.
27.02.12 East Midlands agent poised to sign up
The LKP team has received plenty of fascinating insights into the world of East Midlands property management from Susan Hunt, of Hunter Grey, based in Loughborough, who is in the process of being accredited.
There appears to be no shortage of dud or dodgy freeholders/agents in Leicestershire, and we will be reporting on her tussles with Mainstay in due course. Meanwhile, see the news page for her RTM struggles over the Zenith Block in Leicester.
25.02.12 LKP tour of the north and see CarlEX website for major update on their investigations
We have been contacted by several more managing agents recently who wish to demonstrate their capability to manage leaseholders with transparency, honesty and using their experience to effect cost control. We are off up North starting Monday to interview five of them. Hopefully this will enable many more people to escape the clutches of bad management, and will avoid the frying pan to fire possibility. LKP will report on these meetings and accreditation progress over the next few days. With the continued lack of any concrete news re the Peverel group sale, the likelihood is that there will continue to be a lot of people trying to achieve RTM and all leaseholders need to know who the good managing agents are. The number of LKP accredited companies is going up on a monthly basis – see the relevant page if you need a recommendation in your area. It is really good to know that several of them are part of the new breed of professional managing agents, ex leaseholders themselves who knew there could be a better way of doing things, and are now proving it with growing portfolios of buildings they manage, with much happier residents to show for it.
This week, two Surrey based and one Leicestershire based managing agents have started the accreditation process which includes an evaluation of 85 criteria over six sections including financial, service and maintenance, personal interviews and reference checking. We will publish their results in due course.
See the CarlEX website for news of their current investigations.
OFT chief John Fingleton quits
Soon after we reported on the uncertain results of the OFT investigation into exit fees…..look what happens…..
Office of Fair Trading chief executive John Fingleton is to step down after seven years in charge of the regulator.
If you have time look at the comments under the article related to the latest unsatisfactory performance by the SFO. They are not terribly polite as far the SFO is concerned. We could not put it better ourselves bearing in mind the experience we have had with this organisation. Link here:
More Freehold sales
We have just been supplied with this link to another interesting article about freehold sales, this time in Yorkshire, involving Fairhold – just for a change.
24.02.12 Sunday Times doesn’t know the half of it
Freeholders make huge profits from insurance commissions without leaseholders knowing anything about it. It’s perfectly legal and every professional body knows it happens and has done nothing. The practice has even been actively promoted at a LEASE conference! Bring plenty of tissues and read more
20.02.12 More managing agents come forward to join the LKP accreditation scheme.
JJ Homes of Carshalton and HML Andertons of Croydon have entered the accreditation process, as have Hunter Grey. Next week we are visiting five managing agents in Bolton, Darlington, Macclesfield, Nottingham and Loughborough.
21.02.12 Why the rich should buy freeholds
The Sunday Times recommends the wealthy should buy freeholds, with lots of scope for loading insurance costs and trousering hidden commissions. One fund paying 5.8 per cent. See news
20.02.12 For 48 days work ousted managing agent charges £9,381.22
The epic RTM struggle at Zenith Building, Leicester, has a sting in its tail: ousted managing agents Hurst, part of Sinclair Garden Investments (just Google it!) hands in its bill. Click here for more
16.02.12 Baroness Gardner to take up the cause against rip-off leasehold service charges
Baroness Gardner is to raise the issue of rip-off leasehold service charges as soon as the London Assembly report is published later this month. Several other peers are also backing the issue, which was raised by Melissa Briggs and Sebastian O’Kelly at a meeting in the Lords today.
A report is now loaded on our new Leasehold Reform page – click here to view it.
15.02.12 Results of LKP meeting with Hanover are reported on the News page
Revised ASMA, ASMA NR and ASDAB documents loaded on the Accreditation Schemes page today.
14.02.12 Susan Hunt wins RTM battle
Read how Susan Hunt won the epic right-to-manage battle to free the Zenith Building, in Leicester, from old-hand practitioners of the “dark arts”. Read more.
14.02.12 Joanna Worth, 49, is defying Peverel over exit fees.
Joanna (below) is renting out a retirement flat in Beckenham, in Kent, and the country’s favourite managing agent wants 1 per cent of the capital value of the flat … it has asked three times. Click here to read more
13.02.12 You may view the latest CarlEX news headlines re leasehold reform and the OFT CEO’s salary by clicking:
11.02.12 – See news section to find link to read astonishing second response from the OFT re Exit Fees.
CarlEX has new editorial loaded about the recent re-incarnation of Peverel Cirrus into Appello Telehealth, and the appointment of new director, that well known character, Keith Edgar.
10.02.12 – Melissa Briggs interview with Paul Lewis was broadcast on Radio 4, Moneybox, on Saturday
Melissa Briggs appeared briefly on Radio 4′s Moneybox, on the subject of exit fees and related leasehold issues, this Saturday 11th February, between 12.04 and 12.28. It will be possible to download the podcast shortly or catch it on iPlayer.
Link to relevant Moneybox webpage: http://news.bbc.co.uk/1/hi/programmes/moneybox/9695265.stm
10.02.12 First OFT statement received by email Friday
The OFT investigation (into the use of transfer (exit) fees in the contracts entered into by occupants of purpose built owner occupied retirement homes) is progressing but a number of complex economic and legal arguments have been raised by the parties under investigation which we have been considering in detail.
Whilst we appreciate that this remains a pressing matter for those affected, we cannot give a firm deadline by which our investigation will be concluded. We continue to endeavour to progress the investigation as efficiently and fairly as possible and hope to be in a position to provide a substantive update in the Spring.
Details that we are able to disclose about the progress of the OFT’s investigation is limited to information that is publicly available on the OFT website at: www.oft.gov.uk/OFTwork/consumer-enforcement/consumer-enforcement-current/retirement-homes/. Statutory restrictions prevent us from disclosing the names of the parties we are currently investigating or the state of play of any discussions with those parties.
Editorial page updated with new articles today.
09.02.12 Charter Quay in the News, and read the detailed job description for CE of ARMA
See our main News page for various important points reproduced from the job description of the new Chief Executive of ARMA. We are hoping the implications of the appointment of Michelle Banks of the DCLG are matched by future reality in terms of improved governance in the leasehold sector. Also news about Chelsea Bridge Wharf and their RTM. The Vincent Tchenguiz cartoon with accompanying comment is now on our editorial page.
LKP – New Accountant Appointment
We are pleased to announce the appointment of Imogen Restell who will be responsible for our new RTM company formation service. See our Management page for details. LKP are happy to assist with the RTM process for leaseholders. A downloadable document explaining how we can help will be available on the “I want to break free page” in the next 24 hours. LKP would like to make it clear that we have absolutely no involvement with the RTMF based in Kent.
New page loaded today for BlocNet Limited, our newest approved managing agent.
We are now talking to Anderton’s about accreditation, amongst others, and have a meeting with Hanover in the next few days.
07.02.12 – Block Manager’s page loaded on the LKP website
New page loaded today in Accredited Companies section for Block Managers Limited, one of our latest two managing agents to gain approval status. Many managing agents are now following us on Twitter, so it would seem that LKP’s activities are being noticed on an increasingly wide basis.
02.02.12 – What’s the point of ARMA?
That’s a question being discussed on The Truth About Solitaire website. For years this organisation has enjoyed a very cosy relationship with some of the least appetising outfits in property management. These agents have been repeatedly criticised in Leasehold Valuation Tribunal rulings, the most damning of which was the November 22 ruling last year at Charter Quay against the Tchenguiz/Peverel set-up. It was described by the tribunal as “disgraceful”, the deliberately obfuscatory Tchenguiz company structure was deemed “quasi biblical” and contracts were being doled out to other Tchenguiz companies without being tendered for, negotiated, or even read!
Very late in the day ARMA is now bleating about the need for regulation and “transparency”. Hilariously, even Peverel has appointed an ombudsman.
David Hewett, the outgoing chief executive, says 30 members of ARMA have been expelled in 10 years, but then conceded that many of these were for failing to pay the annual subscriptions. Not one has ever been named.
He also says that, personally, he does not agree with freeholders and managing agents being owned by the same business interest, but has never done anything about it.
ARMA now wants to set up a disciplinary procedure within 18 months, and that will be the first task of Michelle Banks, the in-coming CEO from the Dept of Communities and Local Government, who arrives next week.
But it is too late for that. ARMA sold its soul to the freeholders that appoint the managing agents, to the detriment of leaseholders. Now that has unravelled as leaseholders in London’s landmark apartment blocks have fought back and won millions in LVT rulings and settlements.
A predatory business practise that was so effective with pensioners in retirement blocks – for whom the legislative protections for leaseholders were impossible in practice – hit the buffers when coming up against lawyers, bankers and the rest who live in upmarket London new build flats.
Andy Billson starts his new job with Barratt Homes today
01.02.12 – Andy Billson, late of Peverel, starts at Barratt today in order to set up a bespoke property management organisation for the developer. Owing to the “toxic” reputation of Peverel – to quote the description of a senior Barratt executive – Peverel is not being assigned the management of any future Barratt developments.
Most new appointees experience a “learning curve” as they get to grips with their job. LKP hopes that Barratt’s recruit from Peverel will experience an “unlearning curve” as well. More to follow …
21.2.12 Leaseholders will see that the rich survive
Depressing news for anyone living in a leasehold flat: buying up freeholds is one of the best ways the wealthy can increase their wealth, according to the Sunday Times. One fund rose 5.8 per cent last year. This means freeholds are an attractive alternative to artworks or stamps, although London parking spaces have shown a return of 9 per cent, it is claimed.
“Additional income comes from commissions for arranging building insurance for the leaseholders and renegotiating leases,” says the Sunday Times. In other words, trouser commissions for as many services as you can and make life difficult for leaseholders in order to squeeze them dry. In most jurisdictions, these would be criminal acts.
Freehold Income Trust, which owns 65,000 freeholds, each paying an average of £119 in ground rent, targets a yield of 4.25 per cent, but did significantly better than that over the past 12 months with 5.8 per cent. The fund is up over 18 per cent over the past three years, and 34 per cent over the past five – these are really impressive results, given the collapse in capital values of virtually all non-prime London flats. Retirement flats have fallen further than most.
“A Cambridge college recently invested a sizeable amount for the first time.” says Anthony Wyld, of the trust. (Historical note: No surprise there, sadly. All Souls, Oxford, had huge stakes in the slave trade.)
The fund is unregulated – so no compo if it fails – and minimum investments are £5,000 with an initial charge of three per cent and an annual management fee of £1.3 per cent. The iniquities of feudal leasehold law are part and parcel of Merrie England, so it’s no surprise that the position of freeholders is monetised.
16.2.12 Report re House of Lords meeting
Click here to read the latest update re our meeting with Baroness Gardner and other members of the Lords. We have called this new page Leasehold Reform and will publish updates on this page as they occur.
15.2.12 Hanover meeting note
We met Tony Tench, Director of Retirement Housing Division and James McCarthy, Director of Technical Services at Hanover Head Office this morning. Hanover is a housing association with charitable status, owing to their defined purpose which is to relieve the problems of advanced age. All profits are re-invested into the business.
They have 15,000 units under management – 11,000 rental and 5,000 private (leasehold) ownership. Since we met their managing director about a year ago, they have comprehensively re-examined their management practices and are now totally aware that leaseholders: do not want to pay spurious commissions on intercompany contracts, they want their maintenance properly controlled with accurate advance costings and they want to know that their utility bills are being regularly evaluated for cost control/best value. They are both freeholder and managing agent in some developments and understand the iniquities of certain lease terms. Occasionally if all agree, sub letting charges are waived for example. Hanover is as keen as some leaseholders to undo vetoes on subletting as they cannot make use of empty properties, and they only charge a £200 administration fee when a sub let tenancy agreement is arranged. (This compares rather favourably against Peverel’s £1,500.) Their exit fees are 1% or less and they stated that they hoped the OFT would report for clarity.
A year ago Hanover would not have been able to successfully apply for accreditation status owing to the fact that they were obtaining zero interest on their contingency funds. Recognising this as an important issue, they have now managed to obtain 0.75% by moving all their bank accounts and dividing the funds into instant access and longer term deposit accounts which pay 1.6%. This is a lesson for other managing agents who still maintain they are gaining 0% on contingency funds, despite many millions being held. We now await their decision as to whether or not they wish to join the LKP accreditation system. Hanover are not members of ARMA, although they are part of the ARHM. (James McCarthy is a former chair.) When we asked why they support ARHM, their reason was that they abide by the ARHM code.
We also discussed the merits of commonhold tenure with them in view of the fact they are considering future development strategy and the different forms of tenure available. They may consider whether this is a viable form of tenure for the operation for the future.
14.2.12 Joanna Worth, 49, is defying Peverel over exit fees.
Joanna Worth is renting out a retirement flat in Beckenham, in Kent, and the country’s favourite managing agent wants 1 per cent of the capital value of the flat … it has asked three times. Click here to read more
14.2.12 – RTM Victory after two and a half years, click here to read more
13.2.12 – Second response from the OFT re Exit Fees
To view the latest email received from Jason Freeman, the head of legal at the OFT, click here.
10.2.12 – Another one bites the dust
Chelsea Bridge Wharf, the biggest central London riverside development, has won the right to manage from Peverel.
Vincent Tchenguiz, who owns the head lease, has appealed and next week it will be ruled admissible or not.
“There’s something about his name that gets people moving,” says on-site estate agent Charlie Garton-Jones. “I sent a student round to gather signatures for RTM, and as soon as he told residents that Tchenguiz had appointed the managing agents, they could not sign up fast enough.”
The right to manage process has been undertaken by Roger Southam, of Chainbow, a property figure known for his purple suits and bow ties.
Last week, he sold off a large chunk of his property managing agency business, Chainbow, to Trinity (Estates) Property Management to form Trinity Chainbow, which will service 40,000 leaseholders.
Southam intends to focus on the emerging professional private rented sector – which has long been campaigned for by the British Property Federation.