… but you must take it on trust that if those bits of Peverel that ARE members sign up to ARMA-Q these practices will be ‘outlawed’ and ‘speedily detected’
Michelle Banks (right), chief executive of the Association of Residential Managing Agents, has stated that her organisation will do nothing about the Peverel / Cirrus price-fixing racket.
This is because Cirrus is not an ARMA member, she informs a Campaign against retirement leasehold exploitation reader by email.
Even though the Office of Fair Trading reported on December 6 that pensioners had been cheated in tenders worth £1.4 million at 65 retirement sites, the largest professional organisation involved in leasehold management has not a public word to say on the subject.
Banks writes: “We certainly do not condone the practices which led to an adverse ruling … [but] Cirrus is not and never has been an ARMA member.
“While it has been part of the Peverel Group, the practices that gave rise to the OFT ruling involved Cirrus and Peverel retirement properties. None of the blocks involved were managed by ARMA members and none of the ARMA member companies within the group were involved …
“In these circumstances, our Independent Regulator has no locus to investigate or take any action against Cirrus.”
For months Banks has been attempting to rouse public interest in ARMA’s attempts to bring higher ethical standards to property management via its ARMA-Q scheme.
She even addressed the annual conference of the Federation of Private Residents Associations last November to win confidence in the scheme. You can hear her speech here
The same Campaign against retirement leasehold exploitation reader has made repeated unsuccessful attempts to obtain a response from the ARHM (the Association of Retirement Housing Managers), which obtains the bulk of its funding from Peverel Retirement.
The ARHM has made no statement about the Cirrus scandal at all.
In spite of the professional bodies’ silence, Banks states:
“What we are doing is continuing to work with those companies in the Peverel Group that are our members; OML Property Management, Consort, Stonedale, Marlborough House and Pembertons, to encourage them to seek accreditation under our new regulatory regime called ARMA-Q.
“Under that regime the practices on which the OFT has ruled will be outlawed, and much greater transparency will help to ensure that if they did occur they would be speedily detected.”
It is by no means clear why membership of ARMA-Q by these elements of the Peverel group would mean sham tendering by Cirrus or any other part of Peverel Retirement, which are not ARMA members, would be within the scope of the ARMA regulator.
The ARMA regulator is former Labour housing minister Keith Hill, whose appointment LKP / Campaign against retirement leasehold exploitation applauded.
COMMENT
Is it credible that the two professional bodies involved in leasehold management remain silent over the Peverel / Cirrus scandal?
This is unsurprising in the case of the Association of Retirement Housing Managers, which has never for an instant indicated that there are any adverse issues in retirement leasehold.
It has long been viewed as a stooge organisation for the vested interests in the retirement sector.
ARMA is more promising, and has staff of a different calibre: its ARMA-Q initiative – protracted and complex though it may be – is recognition that higher ethical standards are required.
Although Peverel Retirement and Cirrus are not members of ARMA, a good chunk of the group is.
Is it really acceptable for ARMA to make no public statement – not even an indication of regret – following the Office of Fair Trading’s report into the scandalous conduct of a Peverel subsidiary?
Michelle Banks’ email to the Campaign against retirement leasehold exploitation reader is all too redolent of ARMA’s former buck-passing.
Nor is it at all clear why if some parts of Peverel sign up to ARMA’s new scheme, conduct in Peverel Retirement, Cirrus or any other offshoot of the group “will be outlawed, and much greater transparency will help to ensure that if they did occur they would be speedily detected”.
If a large managing agent’s in-house or perhaps just preferred insurance broker, for example, helps itself to unjustifiable commissions, will ARMA’s response be:
“Ah, but XXX insurance brokers aren’t members of ARMA. Only the parent company is. Therefore this is not a task for the regulator.”
In a sector where the likes of Vincent Tchenguiz, who owns one per cent of all the residential freeholds in the country, have hidden behind “a quasi biblical” weave of companies ultimately controlled offshore – to quote one LVT chairman – this attitude of ARMA’s does not indicate a very enthusiastic reforming agenda.
Somehow, we must take it on trust that were Peverel part of ARMA-Q – and it is very interesting to understand that it still needs persuading – the Peverel / Cirrus cartel practices would be “outlawed” and speedily detected. Why is that, exactly?
We know that there is an appetite among the better managing agents for reform – read Rob Plumb, CEO of HML Group, on the LKP site.
What sort of message is it sending to those managing agents who simply want to be paid for an honest job, when their trade bodies have nothing to say about a shameful example of skulduggery like the Peverel / Cirrus scam?
Both ARMA and ARHM are invited to respond to this article, which will be published in full.
Related posts:
Campaign against Residential Leasehold Exploitation meets lawyers over Peverel price-fixing scandal
The Oldie reports Peverel / Cirrus price-fixing scandal
OFT will report on the Peverel / Cirrus price-fixing scandal on Friday
Fury as OFT may give Peverel immunity over Cirrus price-fixing scandal
Michelle Banks steps down at ARMA
10 essential rules to surviving the leasehold property chamber … by the man who won back more than £500,000
I think that you make the crucial point but fail to nail down the real problem. I share Rob’s views, but he and LKP fall short, and I am not being critical, in that you have identified the weaknesses of lobbying for reform but are “barking up the wrong branch”, instead of the whole tree. Efforts are concentrated on agents and ARMA or the RICS, but if the law and codes of practice explicitly apply, as I have said many times here and for years, to any freeholder or landlord, as well as agents and those that either employ be it brokers or consultants, they the FH or LL, are responsible to the leaseholders for their actions. In that way anyone in ownership or control of leasehold premises (or commonhold for that matter) work on a common basis. Farming out insurance could therefore be subject to the same rules on declaring commissions (until of course they decide to self insure and underwrite their own risk ! )
There is quite a lot that happens behind the scenes. So this is just one of many branches. One of these has included meetings with the FCA to look at insurance.
The reason for concern about ARHM not commenting, and ARMA saying it has no locus over a 100 per cent owned subsidiary of one of its members, is that this gives ARMA members a large hole to drive through to circumvent the intentions of ARMA-Q.
Peverel itself was sometimes OM Peverel, or Peverel OM, or CEM, or Solitaire, or Stonedale, or Marlborough House or Pembertons. Sometimes its insurance went via Estates and Management, or Kingsborough. Sometimes its door entry systems were from Cirrus, and sometimes Interphone. Sometimes goods were supplied by companies that apparently had no link to Peverel, but happened to have had the same registered address in the past. At Charter Quay, even the staff coffee from Brazil somehow went via a little company in Luton on occasions. More strangely, that little company just happened to have its books audited by another small firm which also happened to audit the books of Charter Quay and many other Peverel group managed sites around the country.
My favourite of all is that Peverel Retirement, which is listed as ARHM’s largest member, is a dormant company. If you look at the bottom of its website it says in small print that Peverel Management Services Limited is trading as Peverel Retirement
Is this the transparent self-regulation system ARMA have told the minister will work?
Fantastic. Could LKP please institute a SCAM OF THE YEAR award? The inventiveness, the cleverness, the sheer guile of some managing agents, to say nothing of their lack of scruples, truly deserves recognition. Think of all of the publicity the Bad Sex Awards get.
Did you also have a drinks machine in the gym guzzling £9+ a week in electricity? (every little helps)
Were your staff handed the Mara catalogue and invited to help themselves?
Was your development charged for “uniforms” when the staff don’t wear any and never have?
Were you charged £100s a time for removal of “large items” by private contractors (instead of having the council do the job for £20)?
Were you charged for premium quality paint when 2nd rate paint was used in redecorations?
Did you pay for a care line service whose existence was not disclosed to the staff or to leaseholders and which you didn’t need as your block was staffed 24×7?
Did you pay excessive rates for temporary staff to a connected agency?
The list of scams is long. I can safely say that if the supply of coffee was tainted that for biscuits was too.
Self regulation will never ever work….so there is absolutely no point in persuing it.
We are supposed to have self regulation now and look where that has got us, nowhere apart from bigger ‘clubs’ for landlords and agents to collaborate and collude in.
The law has to be changed as the companies that go to such lengths to defraud leaseholders will stop at nothing and it is only when the F word is mentioned that any of them agree to co operate with leaseholders.
If it wasn’t for LKP and Campaign against retirement leasehold exploitation many of these unscruplious companies would be having a free for all as we speak, but the tide is definatley turning now and these bullies are thinking twice about their actions.
Martin,
That is news to me about the coffee! given the choice of Maxwell House or Marborough House, Maxwell, wins every time!
Perhaps the coffee supply has been stopped, now that the news in the Daily Expresso is filtering out that such is the Mocca Peverel have made of managing property they have not got a bean left!
Michael, you have just made me laugh my so much… thank you for making my day brighter…
Michael
It is not bean like you to stir thing up, you should have a cup of kindness for your fallow man.
I wonder if all of us that have been in regular communication with Michelle Banks CEO Of ARMA were as surprised as Michelle Banks must have been to find out after the OFT delivered their Cirrus/Peverel price fixing verdict that Cirrus were not in fact members of ARMA!
I would have thought that as CEO of ARMA, that at the very least Michelle Banks would know which companies were members of ARMA.
Certainly in all the correspondence from Michelle Banks the impression was clearly given that Cirrus were members.
I am sure all of us would like to know from Mrs Banks at what point did she know Cirrus were not members of ARMA? Before or after the OFT verdict?
Since Peverel took money from residents service charge accounts as a result of the price fixing, does that not mean that an ARMA member has benefited?
But Martin I don’t think that you have stepped back from your frustrations to appreciate my argument.. Let me first say that this isn’t a hole that ARMA is seeking to drive anything through, they are saying that the rules and standards that now apply to ARMA members are these, Q. Even an LKP member, Rob Plumb’s HML, and its subsidiaries place insurance through a company that they wholly own, Alexander Bonhill which outside of ARMA or RICS “control” as revenue goes to the parent, HML Holdings plc, which is not an ARMA or RICS member( though board members are chartered accountants/surveyors).
The relevance of that is that if the “rules” applied to all landlords, and therefore by extension any business that they conduct with others, then the permutations you are concerned about are dragged kicking and screaming into regulation.
To continue ( internet fell over) In the case of HML it is only their commitment to transparency that in this case “keeps them honest”. It leaves the barn door open for others who are not so committed, and that is why regulation has to be comprehensive. to cath the likes of peveral and the others who don’t know what they are doing.
AM,
We are of the view that ARMA-Q is an improvement, but is far from comprehensive. ARMA members need to be accountable for all the contracts that they let. Passing business to related companies needs transparency and arguing just because a company chooses to have 400 related companies (as did Peverel in the past) means only a small fraction can be called to account offers no safety net.
By saying it has no locus against the actions Cirrus took on behalf of Peverel, it does seem to open a large hole in ARMA-Q.
But we are not in disagreement. ARMA cannot be expected to impose their internal regulation and standards ( reagrdless of opinions about those) one external bodies. The loopholes is broadly 1 that the landlord not agent hires the external non ARMA .contractor, even if their sticky fingers are all over the deal, and 2 where the Agent is the landlord (owning blocks or party to lease manager) they are still only limited in liability and control. We are therefore asking for the same thing about standards, however you want it to apply to ARMA where its obvious that unless those standards affect all landlords and agents and extend to those 3rd parties, its not going to work in the way that you hope.
Under the law the managing agent does everything in the name of the freeholder. If we follow your argument the managing agent is responsible for nothing and there is no need for ARMA-Q.
The idea that somehow Cirrus was an autonomous group not acting on the instructions of its parent company is not something company law would accept. If the OFT had conducted a chapter II inquiry there is nothing to have stopped them taking action against Peverel directors.
So, yes, we do disagree. I see no reason why ARMA-Q should not impose sanctions just because a managing agent puts business through its subsidiaries.
Martin,
As a stepping stone ARMA Q is a step in the right direction.
However, would you agree with me, that the reaction of ARMA to the Peverel/Cirrus price fixing runs the risk of ARMA being so undermined, that another body completely will have to take over?
Strange that some of us where I live, take out additional insurance for both building and contents! And why? Because we have no faith in the Management Company, (Self Appointed) who provide no evidence of any Insurance at all! But, we still pay for it regardless of whether we are insured through them or not!
From a recent communication from Michelle Banks CEO ARMA,it appears that she was led to believe that Cirrus was a member of ARMA, but it now appears that following an investigation into the history of Cirrus she is now aware that Cirrus is not in fact a member of ARMA.
This historic revelation occurred just after the OFT verdict was delivered. What a coincidence!
Michael,
How could the CEO not know, as the first thing these organisations do, is to try and distance themselves from Cheating Organisations