The Department of Communities and Local Government has rejected a complaint by LKP that leasehold sector professional Roger Southam is conflicted as the chairman of the Leasehold Advisory Service.
Mr Southam was “appointed on merit” and “LEASE is totally separate from his private business”, the DCLG said.
LKP raised concerns in November, but the issue has relevance after the Leasehold Advisory Service was told to change direction at its humiliating annual conference earlier this month.
Housing minister Gavin Barwell felt it necessary to remind the taxpayer-funded agency that it was “to be solely, and unapologetically, on their [the leaseholders’] side”.
Additional funding was promised to end dependence on commercialising ventures – such as the annual conference, where leasehold sector insiders (including ground rent game-player Martin Paine) pay £350 a head to attend.
“In recent years we have encouraged them [LEASE] to act more commercially, selling their services to others in the leasehold markets, including freeholders and managing agents, “ Mr Barwell told the conference.
“I am announcing today that the DCLG will ensure LEASE receives sufficient on-going funding to concentrate solely on advising the growing number of leaseholders.”
The change of policy marks a reversal of the commercialising agenda that Mr Southam and the LEASE board had been pursuing.
Indeed, a board position is now being filled where the first task mentioned is for a candidate to help provide “strategic direction … including in respect of its commercial activities and achieving commercial outcomes”.
Until last year, Mr Southam was the owner of property manager Chainbow, which he has since sold to Savills.
His advertising pledged freeholders a service of “maximising ground rent opportunities”.
The LKP complaint arose after leaseholders at Taylor Wimpey London sites claimed that they were reluctant to contact LEASE because management companies in tripartite leases at their sites were owned by Mr Southam’s Chainbow.
One dispute over wrongly obtained insurance commissions by Chainbow at Mulberry Mews in Highbury, north London, was resolved after the opinion of LEASE was sought.
Barnaby Clark, chairman of residents at Mulberry Mews, said:
“It is utterly contradictory that our management was owned by the chairman of LEASE. The conflict of interest is blatant.
“I am also extremely surprised that the DCLG did not choose to contact us about this complaint.”
After LKP took up the issue of the embedded management companies, Mr Southam’s first response was to urge its MP patrons Sir Peter Bottomley and Jim Fitzpatrick to suppress publication of the article.
The MPs did nothing of the sort.
In the event, after months of work by LKP and Taylor Wimpey London the leases were re-worked and Chainbow was ejected from ownership of the management companies at the sites.
These have now been handed into the ownership of the leaseholders, which is what Taylor Wimpey now claims was originally intended all along.
At Mulberry Mews, Savills took over management of the site from Chainbow after buying the company, but is to be ejected from the site later this week and replaced with the LKP-accredited Rynew.
In rejecting LKP’s complaint against Mr Southam, the DCLG said:“Roger Southam was appointed on merit following a fair and open competition process … The Department has investigated the concerns you have raised …
“This review confirms that Roger Southam’s role as Chair of LEASE is totally separate from his private business.
“Therefore any requests sent to him in his capacity as Chair of LEASE are distinct and separate from those relating to matters
of his personal business. Roger Southam has not done anything in his private business that impinges upon his role as Chair of LEASE.
“As you are already aware, in the summer the whole of Chainbow transferred to Savills and l understand that Mr Southam’s remit is on business development, not day to day management which further minimises any room for perceived conflict of interest.
“The Minister for Housing and Planning welcomes the Leasehold Knowledge Partnership raising these issues contained in your letter and LKP should continue to feel free to raise concerns with the Department.”
The DCLG also rejected the proposition that the Leasehold Advisory Service was effectively privatised by having the target of being self-financing by 2020.
“The DCLG agreed that LEASE should work towards a fully self-funding position by the end of this Parliament, which the government believes represents a realistic transition period.
“LEASE will maintain its core free service offer to leaseholders and is implementing its new approach and ways of working, so it can maximise its potential for income generation to provide free and independent advice for leaseholders.”
Roger Southam informed LKP: Dear Sebastian
I have nothing to add to the DCLG response you received which I sincerely hope you will fairly and accurately record.
It would appear that the DCLG has not properly and adequately dealt with this complaint in an impartial manner.
Its failure to recognize the consequences of the conflict of interest will potentially result in leaseholders being disadvantaged and may well suffer gross injustice.
The DCLG’s civil servants have failed to properly consider the extent and ramifications of the conflict of interest and its potential to impair and conflict with the objectives of the organisation.
To claim that an officer of an organisation set up with taxpayer funds to advise leaseholders can properly and impartially discharge those functions whilst having commercial interest in an organisation that may conflict with the leaseholders is clearly a case of improper conduct and gross maladministration by the DCLG.
The LKP should escalate this complaint to the Parliamentary and Health Services Ombudsman for investigation and also make a formal complaint of maladministration to the Commons Select Committee on Communities and Local Government.
After running a property management business for many years I can catagorically say you are either in business to provide services to the leaseholders or the landlard, you cant do both that is unless your appointment is impartail and realiant on neither.
So if remaining in a property mangement business even in business development role then that perosn can not be suitable to chair LEASE..
There are in times in life that sitting on the fence is not an option. Having a foot in two camps makes you loyal to neither. LEASE needs a believer in the rights of the leaseholder to drive the service to the leaseholders reagardless of who the Landlord is and how ever hard that fight maybe,
LEASE needs a champion to sing the rights and the wrongs from the roof tops to make Landlords of all types realise that leaseholder is not just there to provide them money.
You cant do deals in busiiness with Landlaords then chastise them when wearing another hat!
If DCLG wont see the light then maybe tthe Commons Select Committee can see the conflict of interest.
It stinks! All far too insestuous. I am sure this story has legs….
You could not make this stuff up:
“Please give details of any business or other interests or any personal connections which, if you are appointed, could be misconstrued or cause embarrassment to either DCLG or LEASE. Any particular conflicts of interest detailed here will not prevent you going forward to interview but may, if appropriate, be explored with you during your interview to establish how you would address the issue(s) should you be successful in your application.
These could include financial interests, or where you share ownership, active connections with a field of expertise in which LEASE works, membership of societies, activities, associations or employment of a partner or friend in the particular field, LEASE operates. Any statements you make will be treated confidentially and we will contact you to discuss any potential conflicts that might arise ahead of the sift process to explain what might be required, if you are successful and check that you still wish your application to be considered.”
Alternative facts rule.
Really? I can not believe this is allowed to happen.
As a leaseholder I feel if it wasn’t for LKP supporting all the leaseholders nationally we would have nothing.
I feel LEASE have nothing to offer leaseholders other than where to go to pay for advice. I already feel the freeholder have taken our home from us.
LKP you do amazing work on a voluntary basis. You are the rock to so many people.
As the creator of the National Leasehold Campaign Facebook page we now have 900 members in less than 2 weeks. We will continue to grow and with your support we will stand united in fighting the injustices of the leasehold system.
I totally agree and support the comments from Katie K, especially the reference to LKP.
The decision taken by DCLG is an absolut disgrace and insult to the decent people of this country. Lease has never had anything to offer the leaseholder’s and it lives off the back of taxpayers money. Leeches that should have been closed down ages ago
This is farcical, conflict on interest is an understatement, no wonder us leaseholders are getting fleeced on every level , absolutely diabolical .
Well, no one can accuse him of NOT maximising ground rent. A man of his word.
Chances of the Govt. bringing in capping for example for onerous Ground Rents seems ever more distant…. Can’t believe this news so soon after the vaguely promising housing white paper was published. Unbelievable!
The brave Sir Peter Bottomley has his work cut out for him at the next LEASE conference!
Roberta Anderson, who is employed by Mainstay, is an active ground rent agent boasting of acquiring £200m+ ground rents on their website. The very same Roberta Anderson is married to Roger Southam, although this seems to be kept very, very quiet. Thick as thieves!
Yes she has acquired over 20000 of them. If any were for houses belonging to young families purchased on Help to Buy, perhaps she will do the right thing and return the freeholds at a fair price.
And the situation just keeps getting worse. Roger Southam’s wife works for Mainstay.
Mainstay group have been appointed as asset managers for Aviva investors REalM fund.
The REalM fund comprises of a growing portfolio of some 36,000 predominantly residential ground rent purchased by Aviva Since 2011!!
Yes that will be all the freeholds that have caught thousands of homeowners out in the Leasehold scandal !!!
Read the link below. It’s hard to believe.
How can Roger Southam not have a conflict of interest when his Wife managers the REalM fund which contains many of our freeholds !!!!
The National Leasehold Campaigners are not happy and we are going to start making some noise about this issue too.
Tax payers money should NOT be used to fund such a corrupt service.
I have just read the Mainstay Mission statement
“Our services should enhance our clients property asset values whilst ensuring the safe enjoyment of occupants and delivery of exemplary customer service.
We aim to achieve this by applying ethical business practices in a fair and conscientious way”.
DCLG, I think we could be the country with the most corruption in the entire world – Do Something Honourable Now
Was it not Mr Roger Southam who was appointed as a non Exec Chairman of L.E.A.S.E for a 5 years from Jan 2015, courtesy of Mr Brandon Lewis MP?
Wasn’t he also that time a joint Chair and CEO of ‘Chainbow’. Surely those at L.E.A.S.E. should have either known this and / or conducted and internal revue as to establishing as to whether or not there was any potential Conflict of Interest, as no pertinent questions appear to have been asked in the matter of role suitability.
How many of these Ground Landlords have non-disclosed vested and overriding interests?
Lessees are merely secondary in Consideration as to funding there lifestyles.
It’s not just Leaseholders at Taylor Wimpey sites in London who are reluctant to contact L.E.A.S.E. It is Not Fit for Purpose and there are too many examples of further non-disclosed connections. Leaseholders are being shafted when additional Charges are placed, which then begs the question as to Primary Charges with the Lessees Lender in the property. Is this why buying the Freehold has increased as your paying off their non-disclosed Charges?
It really is a question here as to who benefits ; as a benefit to whom!?
Hedge Funds – look how they are now being funded. If the government said they would really go after these offshore party havens, they could resolve Leasehold and save the National Debt too. As that is after all the premise for a Sinking Fund.