The following has been sent in by … an anonymous managing agent
Leaseholder asks managing agent to explain his ethics.
Managing agent replies: “It’s an historic county to the east of London where I have a nice little block of apartments situated on the River Thames.”
Energy Renewals, which is sponsoring next month’s ARMA conference, is offering managing agents the chance to win a free iPad if they sign up for an appointment. That’s on top of incentive payments of between £3,000 and £50,000 a year if they offer up their blocks for new gas and electricity supplies.
Large, corporate clients – such as the larger, national managing agents – can do better still with payments of £50,000 to £250,000. And the brilliant thing is that the leaseholders don’t have to be told anything about these payments and can be relied upon to keep paying up in blissful ignorance.
Our original report on this can be read here
Now an anonymous ARMA member has written to LKP, indignant that Energy Renewals is one of the co-sponsors of ARMA’s conference “Success in a Consumer Focused Future”. The event will see the unveiling of ARMA-Q, the organisation’s ethical facelift, and the appointment of a regulator for the trade body.
McCarthy and Stone has replied on its website to the exposé carried out by Channel Four’s Dispatches on Monday evening. You can read the page here
It says: “Treating our customers with fairness and respect is at the cornerstone of what we do and over the course of the last 35 years, our staff have helped thousands of people live more enriched lives in retirement.”
Using an undercover pensioner ‘spy’, Dispatches revealed that the McCarthy and Stone’s sales team urged would-be buyers to sell their houses in a complex part-exchange scheme.
Tonight’s Dispatches programme on retirement leasehold was a brilliant example of television journalism that was extremely damaging to both McCarthy and Stone, and to Peverel.
It is excellent that Peverel’s disgraceful treatment of the pensioners at Strand Court, Rye, has been given a wider airing. Read original story here or search Strand Court on this site.
Any potential new buyers would have been appalled at the way the sales team coaxes new clients into a disadvantageous part-exchange sales process of their existing home.
Marion Bowley, in Weston super Mare, was offered £140,000 for her pleasant family house. But she sold it herself for £50,000 more after only two weeks on the market.
Fraudster managing agent Simon van Houten, 31, (left) told residents he had dismissed their caretaker … only for them to discover that the man was still on the payroll two years later. The £32,000 in wages had been secretly paid out of their service charges. This shambles was only one incident at Sunlight Square, which for five years was managed by Van Houten when he was an executive with Rendall and Rittner. In July he was jailed for 30 months at the Old Bailey for stealing £122,000 out of leaseholders service charges.
He used a bogus decorating company to issue numerous invoices that he then authorised for payment. He used the money to fund a luxury lifestyle in Chelsea, on the proceeds of funds he stole from leaseholders in east London.
Van Houten pleaded guilty before the trial began and as a result there was no evidence presented or cross-examination.
Tomorrow night (Monday) at 8pm Channel Four’s Dispatches carries out a special investigation into the fraught world of retirement leasehold with much of the material provided by an undercover pensioner ‘spy’.
Carlex activists have been interviewed for the progamme, and Carlex/LKP has given the filmmakers, October, full assistance over the past few months – although what they have unearthed is entirely their own achievement. [Read more...]
It has also made suggestions to improve it: first, to make the disciplinary procedures public, like ours; secondly, to strengthen the requirement to declare ‘conflicts of interest’ to leaseholders.
It cannot be disputed that managing agents should tell leaseholders that their company is owned by the freehold-owning landlord. Or, that a managing agent is employed predominantly by one freeholder. These would be bars to LKP accreditation but, unfortunately, they exist with some of the ARMA membership.
It is also worth emphasising that many property managers have no intention of joining ARMA, which they believe has been collusive in the abuses of leasehold. The most spectacular examples in monetary terms of over-charging have been the handiwork of ARMA members. Nottingham-based Walton and Allen, an LKP member, “resigned from ARMA membership in 2011 as it became evident that its council is controlled by those very managing agents whom leaseholders want removing from their buildings”.
Omertà, the Sicilian vow of silence, has been a part of ARMA’s unwritten code for far too long.
Next month the Association of Residential Managing Agents unveils its new ethical facelift ARMA-Q – having never, in its 21-year history, publicly expelled a single member. (See ARMA’s draft announcement pdf at the bottom of this article.)
There is to be a 10-point “consumer charter” to reassure leaseholders and an apparently independent regulatory chairman, assisted by a panel of perhaps 12 industry and lay members, who will accredit the 270 existing ARMA members and vet ones that apply to join.
In addition, the regulator will rule on disciplinary issues, imposing fines and costs and, ultimately, expelling offenders from the organization. It is not clear at this stage whether this process will be public, which would be the only means of making it effective.
At present, complaints about an ARMA member are addressed internally by the company concerned and then go on to whichever Ombudsman scheme the firm has signed up to. These rulings are not made public, and the cash settlements are trifling. They cannot be compared to the redress achievable in the civil courts, or LVTs.
ARMA-Q is stressing the independence of the regulator, who will nonetheless be appointed and paid for by the governing council of the trade body. The appointment will not be from within the sector but a “person of established professional standing preferably, but not essentially, with a strong public profile”. An “overwhelming 200 plus applications were received” after the job was advertised in the Sunday Times in June. [Read more...]
Robert Plumb , chief executive of managing agents HML Holdings, which is accredited to LKP and is a member ARMA, considers ARMA-Q and the complexity of transparency for residential managing agents
Growing leaseholder empowerment and awareness combined with the immediacy of communications will inevitably mean that managing agents will require a thorough understanding of what it means to be truly transparent. In leasehold there are many complex permutations of the relationship between landlords, their managing agents and their leaseholders. It is, of course, the leaseholders who actually pay the bills, but often landlords who take the decisions. Given the historically poor level of transparency and the variety and complexity of leasehold structures there is significant scope for misunderstanding. In fact put more harshly there is significant opportunity for a lack of transparency and the use of “smoke and mirrors”.
An understandable and fundamental principle that we should anticipate is that in the minds of leaseholders they should be able to trust the impartiality of their managing agent. They would like to believe that the agent (whose fees they pay) will act in their best interests when deciding which supplier or contractor to use for their building. In relying on their managing agent to select the best value for money supplier (and best of course is not always cheapest) they would naturally want the agent not to be compromised by the agents own financial interest in the transaction or in the supplier. One can’t help observing that the downward pressure on property managers’ fees that occurs in difficult economic times, such as we have had recently, has had the effect of keeping base management fees artificially low. This may well have contributed to agents having to look at other ways of making money in order to survive. It is these additional income streams in particular that require additional transparency.
The full Leasehold Valuation Tribunal rulings at Oakland Court in Worthing – including the preliminary decision, refusal of leave to appeal by the LVT and the final determination – has been published on the Ministry of Justice website. The link is below.
The pensioners were contesting the notional rent of the house manager’s flat, but the landlord’s barrister, Justin Bates, assisted by Laceys solicitors of Bournemouth – who also style themselves the ‘honorary solicitors’ of ARMA – repeatedly argued that the case should not be heard. Sir Peter Bottomley, Conservative MP for Worthing East, told the House of Commons that these legal stratagems amounted to “legal torture” of the pensioners.
Two of the original applicants had died by the time the dispute was settled in the residents’ favour. Search Oakland Court on this site for full details, or click the Oakland Court menu on the “news by category” index.
Activists with the Campaign Against Retirement Leasehold Exploitation (Carlex) have given full assistance to the programme and interviews have been held with Sebastian O’Kelly, Carlex chairman and LKP director.
Dispatches aired a documentary on residential leasehold on August 26 – Property Nightmare: The Truth About Leasehold. More information will be provided closer to the date.
Launching a Leasehold Valuation Tribunal action can be “quite daunting”, according to barrister Siobhan McGrath, who heads the Leasehold Valuation Tribunal service.
She made this admission in an interview in last month’s Channel 4 Dispatches documentary Property Nightmare: The Truth About Leasehold.
It is hardly a ringing commendation for the Tribunal system she oversees which is supposedly designed for use by lay applicants. The following statement on the web site of LEASE, the Leasehold Advisory Service, can often be entirely misleading:
“Proceedings at the LVT are semi-formal. Neither side is required to be represented by a barrister, solicitor or valuer, evidence is not given on oath and the usual court rules do not apply.”
The LVT itself then adds the even more misleading statement when describing its cases: “The proceedings are orderly, but informal”
Knowledge of the huge hurdles in bringing cases at the LVT will not come as news to regular readers of this site who recall examples such as the “legal torture” of pensioners at Oakland Court, in Worthing, or the disgraceful £30,000 legal bill for a simple right to manage application at Kingsmere, in Brighton. (Search Oakland Court and Kingsmere on this site.) [Read more...]
One point worth establishing before you get started is whether or not you need to engage in in the Right to Manage process at all. If your objective is to simply change your managing agent check your lease and find out if it empowers you to change your manager with a simple vote in favour from the leaseholders. You could avoid a good deal of time and expense if it does.