The operations manager – as well as RMC directors – of a retirement village in Oxfordshire bungled a section 20 application over an energy contract and have now spent £36,450 of leaseholders’ money on lawyers to put right their error.
They are also on the hook for perhaps another £4,000 legal costs of a leaseholder who disputed the issue.
Dibleys Heritage, in Blewbury outside Didcot, a desirable retirement site in extensive grounds where the freehold is owned by the residents, asked for and was granted retrospective dispensation for a section 20 consultation.
But the tribunal ruling also revealed alarming practices in the management of Dibleys Heritage.
The tribunal ruling of 10 February 2023 found that Adrian Curtis, the operations manager of Dibleys Heritage – who is understood to be the son of an ex-director who lives on site – and the directors of Dibleys Heritage Limited had agreed to a three-year gas communal contract at £66,000 a year without following correct section 20 procedures.
This meant that the 45 leaseholders – the entire site has nine houses and 47 bungalows, some being freehold – who are also shareholders of Dibleys Heritage Limited had no say in the contract.
The directors of Dibleys Heritage decided to engage solicitors RWK Goodman in London and a barrister for the dispensation hearing.
The tribunal noted:
“It was explained that the failure to implement the Section 20 Procedure in respect of the Contract for the supply of gas on 29th March 2022 was in part due to training in 2019 undertaken by the Applicant’s Directors and Operations Manager [Adrian Curtis] which misled them to believe that consultation was not necessary where service charges were demanded on account. In July 2022, the Applicant’s current solicitors corrected the Applicant’s Directors’ and Operations Manager’s misunderstanding.”
Nonetheless, the tribunal did grant Dibleys Heritage Limited dispensation from the section 20 retrospectively, although it was ordered within 21 days of the ruling:
to provide leaseholders with a statement explaining why the contract was agreed, the tariff, the unit rate and standing charges, estimated usage and costs for each residence, as well as applicability to the government’s Energy Bill Relief Scheme.
In addition, leaseholders must be allowed to see and take copies of the long-term qualifying agreement.
In spite of this ruling, leaseholders have told LKP that this information has not been forthcoming.
A copy of the tribunal ruling (below) has been distributed, as has a letter from Dibleys Heritage chair Elizabeth Sweet stating that service charges would have to rise by £36,450 to pay for the company’s legal expenses at the tribunal (below).
A condition of the dispensation was that Dibleys Heritage Limited had to pay the legal costs of the hearing and those of Dean Evans, a leaseholder who objected to the section 20 error: thought to be another £4,000 on top of the company’s £36,450.
LKP has been contacted intermittently for some years over concerns at the management of Dibleys Heritage Limited, in particular concerns by elderly residents to surrender their 1988 leases, which have length terms of nearly 1,000 years, in favour of a new lease. LKP is informed that 16 leaseholders have accepted these new leases.
Concerns about the new leases prompted some leaseholders to contact specialist barrister Rawdon Crozier for an expert opinion. He found the new leases emphasised revenue potential and development potential for the landlord, that is Dibleys Heritage Limited, at the desirable site.
Dean Evans, a leaseholder who deployed solicitor Charles Knapper of www.cwcsolicitors.co.uk at the hearing, disputed the section 20 dispensation, and attempted to raise the issue of the leases in the hearing. But the tribunal noted:
“Mr Evans also referred to the differences between the 1988 and 2019 Leases. The points raised were not within the jurisdiction of the Tribunal in respect of this Application.”
The tribunal noted that Dibleys Heritage Limited is in fact a company limited by shares, which at present belong to the residents living at the site and who therefore own its freehold.
Mr Evans “was critical of the Applicant’s conduct in general with regard to section 20 procedure. He said that the Applicant had failed to comply with the consultation requirements on other occasions and referred to previous fixed-term contract for gas between 2017 and 2022.
“He also questioned whether there would be compliance in respect of future works of upgrading the heating system and roof repairs,” the tribunal noted.
“Mr Evans said that there was a general lack of transparency and accountability and due diligence.”
He had asked for detailed information about the energy contract by email from Adrian Curtis on 12 September 2022, but he said none of the information had been provided.
He was further unsatisfied that the gas is provided to Dibleys Heritage via a commercial contract rather than a domestic one, but offered no evidence that this would result in a cost saving to leaseholders.
“The onus is on the Respondent tenants to show that they have been prejudiced,” the tribunal said.
Mr Evans solicitor, Charles Knapper, said that Dibleys Heritage tried to dissuade him, “in his view unfairly”, from objecting to the dispensation proceedings “as it would incur the other tenants in unnecessary expense which could cause discontent and discord”.
The tribunal ruled: “The Tribunal finds, and the Applicant admitted that none of the consultation requirements referred to in Section 20 of the Landlord and Tenant Act 1985 and as set out in Schedule 1 of the 2003 Regulations 2003 have been complied with.”
“The Tribunal finds that the Applicant did not attempt to comply with the consultation procedure under section 20 of the 1985 Act and as set out Schedule 1 of the 2003 Regulations. The Contract was completed on 29th March 2022 and yet the Respondents were not informed of the Contract until the Summer Report of 31st May 2022.
“The reason given for the non-compliance that the Applicant’s Directors and Operations Manager did not know that they had to provide the information is not considered reasonable.
“The role that these persons play requires them to be aware of the statutory obligations especially where large sums of money are to be paid by vulnerable persons.
“In the circumstances the Respondents were entitled to object to the Dispensation Application and Mr Evans was entitled to present his submission at an oral hearing.”
As a result, all Mr Evans legal costs, thought to be about £4,000, were awarded against Dibleys Heritage Limited.
This week Mr Knapper wrote to RWK Goodman solicitors, acting for Dibleys Heritage Limited, to confirm and explain the legal costs of more than £36,000 by tomorrow (17 March 2023), “failing which we will have to make a formal application for the costs to be assessed [by the tribunal] and we will expect your client to meet the costs of the assessment”.
Referencing the “debacle” of the gas supply contract, he added that the directors of Dibleys Heritage Limited “appear to have incurred costs of £36,450 because they did not comply with the provisions of the Landlord and Tenant Act 1985. Your duty is to the company and not to the directors and we therefore consider you are under a duty to point this out to the members.”
He added: “Presumably the directors have an appropriate policy of insurance for such claims.”
The full property tribunal ruling is available here
Dibleys Heritage Limited letter announcing service charge increases to pay the £36,450 for the barrister and solicitors it employed at the section dispensation hearing can be read here:
I’m so glad to see this matter reported on this excellent website and in such detail.
As this report states, this non-profit leasehold estate was created for the benefit of elderly people, and the freehold of the homes on this estate is owned entirely by the residents.
The so-called “Operations Manager” (Mr. Adrian Curtis) at this estate has for far too long behaved as if the estate were his own personal fiefdom. Somehow the “Operations Manager” has managed to convince those few residents who are members of the estate’s board as to how the estate should be best managed and controlled! Somehow the “Operations Manager” has managed to have the members of the board enable him to exert an entirely undue and powerful influence on the administration and the day-to-day workings of the estate.
Consequently some elderly vulnerable resident-owners of Dibleys have been pressured, if not coerced, into signing a new lease for their homes although there has been absolutely need for the introduction of a new lease on this estate.
The sooner the involvement of this particular “Operations Manager” ends the better things will be for all of the residents of Dibleys. This estate is meant to be administered entirely and only by its resident-owners. The resident-owner need to feel secure in the knowledge that they, and only they, run the estate.
If the resident-owners wish to employ some suitably qualified person as an Administrative Assistant, to assist them in carrying out their responsibilities, then whoever is appointed must be a person who has absolutely no relationship whatsoever with any resident-owner of the estate. It should go without saying that there must be no conflicts of interest. If anyone employed by the board is found to have a relationship of any kind with any resident-owner then they must immediately resign from the position.
In short, the administration of Dibleys must be transparent and accountable to all of its resident-owners, who are entitled at all times to feel completely comfortable and secure in the ownership of their homes, rather than feeling dominated by someone who is not a resident-owner and who clearly does not feel answerable to the residents, never mind showing respect towards the very people who own the estate.
The purpose of the setting up of Dibleys Heritage needs to be revisited and its founding principles need to be honoured!
I am delighted to see that the Tribunal hearing revealed that alarming practices have occurred in the management of Dibleys, and I am also delighted that after hearing the evidence presented by both sides, the Tribunal judge concluded that correct procedures have not been adhered to at Dibleys.
The judge ruled that Dibleys Heritage Limited has to pay the legal costs of the hearing and the legal costs of the resident-owner who brought the case to the Tribunal. It is a pity that those costs will now have to be paid for by all residents out of the estate’s service charge, but in the long-run the slight increase in the annual service charge to cover these costs will be well worth it because the outcome of this Tribunal hearing sends a very strong warning to the current members of Dibley’s board that they must now take significant remedial actions, so that there will be no need for residents to have to appeal for the intervention of the Tribunal in the future!
Well done to those resident-owners at Dibleys who have been brave enough and courageous enough to call out wrong-doing and bring it to the attention of the Tribunal and to Leasehold Knowledge Partnership!
I agree completely with all you have written. The situation has been increasingly alarming for several years, and is clearly aimed at turning the whole site over to developers.
One could hope that the directors will now sack Curtis, for mismanagement resulting in
£ 40,000 plus charges. Additionally, he has spent something in the region of £ 11,000 on computer/office equipment, and £ 7,000 on software, yet appears unable to supply copies of the gas bills for the relevant period. More incompetence.