Legal & General has announced that it will pick up the entire, multi-million pound cost of removing the Grenfell-style cladding at flats above the Blenheim Centre in Hounslow, west London, it has informed LKP.
This means that the 334 residential leaseholders at the flats, called Reflexions, will be spared repair bills estimated between £20,000 and £30,000.
At present, 16 fire marshals are employed on site 24/7 at a cost of £165,000 a month after Grenfell-style “aluminium composite material” was found at the site.
Legal & General announced its “gesture of goodwill” after LKP took up the issue, prompting the insurance giant to address the matter publicly.
The issue was had been taken up by local Labour MP Ruth Cadbury, a former shadow housing minister who is also a member of the All Party Parliamentary Group on leasehold and commonhold reform.
Legal & General’s announcement is covered in the current issue of the news magazine Private Eye.
Croydon leaseholders at Citiscape face £750,000 bill to remove Grenfell Tower cladding
At least 20 private blocks affected Bills for fire marshals at one site have reached £16,000 a week Leaseholders in the Citiscape block of flats in Croydon face a £750,000 – £1 million bill to remove the same insulation cladding involved in the Grenfell Tower fire.
Legal & General provided the following statement to LKP:
“Legal & General acquired the Blenheim Centre, a shopping centre in Hounslow in 2010. It was built in 2006 by Vinci.
“The property comprises retail, leisure and restaurant accommodation over the ground and first floor, together with a car park in the basement.
“Above our property is a nine-storey block containing residential flats that were built and sold by the original freeholder, Barratt Homes.
“Annual fire and health and safety risk assessments are carried out on the property and the building is designed and built to meet all Building Regulations in force at the time of construction. As such, a fire assessment was last carried out on the shopping centre in April 2017, at which time no deficiencies or actions were identified.
“In addition to this, as a responsible investor, in light of the events of Grenfell we have taken every step to ensure that the building has the right safety measures in place.
“Actions to date have included: submitting the building’s cladding for testing; liaising with Hounslow Council regarding the building’s safety for members of the public; liaising with the Fire Safety Officer (the London Fire Brigade) to ensure the building is safe to occupy; working closely with the management company of the residential block, Reflexions, to ensure they understand their obligations in respect of the fire safety; and commissioning a fire engineer’s report to make short and long term recommendations that, together with Reflexions, we are carrying out.
“Legal & General takes its landlord obligations very seriously and considers that the safety of the residents is of paramount importance.
“While I am not in a position to disclose the full costs associated with these actions, I can confirm that all necessary measures to protect the safety of residents are continuing to be carried out and that as a gesture of goodwill we have proposed a solution to ensure that residents will not be adversely financially affected as a result of these works.
“As such Legal & General has offered to fund these costs.”
It is believed that there is another L&G site in Manchester with similar cladding issues.
Legal & General have not confirmed this, responding:
“Our goodwill gesture at the Blenheim Centre was made on an individual basis, based on a number of detailed individual considerations.
“I am not sure of the building in Manchester that you are referring to, but there isn’t a common link between this shopping centre asset and any other asset that we manage so it is difficult to say whether a similar stance would/could be taken elsewhere.”
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Grenfell cladding leaseholders form campaign group
DCLG urged to inform leaseholders over Grenfell cladding bills … and stop snubbing LKP
Ground rent speculator Robert Steinhouse cuts and runs from Nova House, but who pays £4m Grenfell bill?
Long Harbour hits reverse on forfeiture to £800,000 flat over £400 ground rent … and JB Leitch halves its legal bill
Taxpayers face £85,000 loss as Homes England accepts leaseholder can pay back loan on flat blighted by Grenfell cladding
Why has it taken so long to regulate the leasehold sector?
This is indeed good news (and possibly avoids the need for legal action to resolve the cladding question?)
Legal & General are to be commended for their action.
Such a pity that Cityscape In Croydon is not owned by Legal & General, as residents face horrendous bills to replace the cladding. But what else would you expect from a Tchenguiz freehold?
Blimey do Tchenguiz still own Freeholds? I thought they had been drummed outta town when wrongly arrested for wotever In Whenever.
Let’s hope the residents of the Croydon block collectively take legal action.
OK, so here is the basic story in a most cursory of fashions!
Tchenguiz through his offshore family trust borrowed money to buy up great swathes of freeholds.
His borrowings were secured on greatly enhanced valuations and on income streams over a previously unheard of period of time.
Because legislation means that a freeholder cannot directly profit from maintaining a building, Tchenguiz came up with the idea of owning a managing agent who could make profits. Hence Peverel (now known as Firstport). Those profits could be increased if you added layers of management (such as the creation of Kingsborough Insurance).
All Peverel had to do was “lend” Tchenguiz companies their excess profits and effectively Tchenguiz would have borrowed to buy the freeholds, appointed himself as managing agent, transferred the profits made by the managing agent and used that money to pay the interest on the money he borrowed. The “beauty” of his scheme was that it was ultimately the leaseholders that were financing Tchenguiz.
When things starting turning against Tchenguiz (well before his arrest) more income was needed, which was the genesis of the price-fixing scandal.
Enter Robert Tchenguiz (Vincent’s brother) who had many speculative investments turn sour on him. He was desperate for money and needed emergency funding which he planned to obtain from the disgraced Kaupthing Bank.
Kaupthing Bank required a loan guarantee from Vincent Tchenguiz which he duly gave by pledging shares. The simple case for the SFO against Vincent Tchenguiz was that those shares had already been pledged. the mistake the SFO made was that Tchenguiz had revealed to Kaupthing that the shares had been pledged, so he was innocent. If any fraud had taken place it was conducted by Kaupthing and not him?
Why would Kaupthing accept a pledge of shares that they knew had no value to lend to Robert Tchenguiz?
It is widely believed that Kaupthing (by now very close to collapse could not afford a default from Robert Tchenguiz (as he accounted for such a large part of their loan book) and as a “sweetener” part of the loan was going to be used to buy Kaupthing shares which were in free-full.
(To be continued in next post).
The Tchenguiz Story (continued)
Around the time of his arrest Tchenguiz companies were already in default on many of their loans. Indeed, one of his companies was required by Barclays to deposit cash in the bank to simply pay wages.
Following the arrest BOA Merril Lynch called in their loans and the Peverel holding companies went into administration.
It had been Tchenguiz’s plan to buy back Peverel out of administration 9in a move known as a pre-pack. But he failed to do this as he could not get the funding he needed so to do.
Tchenguiz blamed his financial predicament on his arrest (which was partially true) and sued the SFO for a sum thought to be upwards of £200m. had he won he would have used this sum to buy back Peverel.
But he suffered misfortune after misfortune. In the fist place, the SFO decided to fight (Tchenguiz needed a quick win as time was running out on the Peverel administration and it was getting close to the time when Peverel would have had to be liquidated. So now, he realised that Peverel was about to go, and he didn’t have the funds to buy Peverel out of administration.
So he has a “plan B””. It is believed he went back to his original backers(who agreed for a ;large fee to buy Peverel out of administration and as soon as funds were available sell Peverel back to Tchenguiz. And here was the second misfortune for Tchenguiz. The case was settled with Tchenguiz receiving around £3m in compensation (not the £200m he had demanded.
He could not now buy back Peverel (and of course Electra/ Chammonix were left holding a company they really did not want).
Crucially, the failure to buy back Peverel for which Tcenguiz depended on to supply the funding to service the loans taken out to purchase his freeholds meant that his funding was cut off.
The day after the SFO settlement his property portfolio was put into default.
The lenders decided it was better for them if the portfolio was still held nominally by the Tchenguiz Family Trust so that the portfolio could be sold off in a controlled manner, rather than the whole portfolio being dumped on the market at the same time.
Master Epstein
I commend you on the erudite and concise construction of the “ Decline and fall of the Tchenguiz Freehold empire “ story.
It could almost bring a tear to a glass eye ????????
Hello Michael,
How do we know which freeholds have been or are to sold ? Surely leaseholders have the right of first refusal ?
You can find out who owns your freehold from either the Land Registry or your ground rent demand will be issued in the name of the freeholder.
Notionally, leaseholders do have the right of first refusal, but it is so easy for freeholders to get around current legislation as to make the right meaningless.
For example, a lease is sold to a connected company, or as is more common, the lease is not sold, but instead the company owning the lease is sold. .