FirstPort and Mainstay have united to form a managing agent controlling more than 275,000 flats – the biggest leasehold block manager in the country.
FirstPort, formerly Peverel, manages 196,000 flats, including Scotland, while Mainstay manages 80,000. The combined new company is now more than twice the size of the nearest competitor.
The vast majority of management contracts to both companies will have been doled out by developers or commercial freehold-owning players, such as Vincent Tchenguiz’s interest – which used to own the company, then Peverel, and which still makes up the majority of FirstPort’s business.
The number of leaseholder-controlled sites managed by either company is absolutely minimal.
Neither of these property insider operators has flourished because of consumer success among leaseholders.
Even though leaseholders have had no say in appointing either of them, both companies piously intone that they are serving their interests in a “consumer-centric service”.
In fact, the only consumers that matter are Mr Tchenguiz, developers and other other punters in residential freehold investments: upset them and either FirstPort or Mainstay would soon be given its marching orders.
It is an unanswered question how Peverel / FirstPort ended owing a portfolio of leases on retirement house managers’ flats after the implosion of the Tchenguiz interests in 2011. This followed the arrest of Vincent and Robert Tchenguiz, on wrong evidence, by the Serious Fraud Office.
Another question raised by the merger is whether it is out of desperation or for love.
Whatever economies of scale there are in property management as practised by commercial freehold-owner focussed management companies, one assumes they have already been made.
So is it desperation? Discuss.
Or may it even be, dare one mention it, a recreation of Erinaceous – the ill-fated mega property management company that went phut in the crash of 2008. Who knows.0
This joyful union surely does require some minimal participation from those subjugated to these “consumer-centric services” whatever their opinions on the matter.
So, leaseholders in FirstPort and Mainstay managed blocks are invited to share their thoughts in the comments section below.
FirstPort and Mainstay join forces in industry leading combination
London, 25 June 2020
FirstPort, the UK’s largest residential property manager, has today announced a transaction which will see it combining with leading property and asset manager, Mainstay Group.
For FirstPort and Mainstay customers, clients, employees, management, and supply partners day-to-day operations will remain unchanged. Completion of the transaction only remains subject to approval by the Financial Conduct Authority.
Last year FirstPort welcomed Equistone Partners Europe as its new majority investors to support its continued growth, investment in a comprehensive digital transformation programme and make further enhancements to its customer service offering.
To date, FirstPort has completed two previous transactions, strengthening its team and service offerings with the acquisitions of Barratt London’s property management company, BRAM, in 2019 and Linden Homes’ property management provider, Pentland Estate Management, in 2017.
For Mainstay Group, 2019 was a significant year with the business achieving record growth, winning appointments on a number of high-profile developments and securing a national, multi-million-pound portfolio.
Nigel Howell, CEO of FirstPort, commented: “We are delighted to be joining forces with Mainstay to deliver the very best property and asset management services for our customers and clients. Mainstay’s achievements and track record are impressive, and we are proud to be welcoming them into the FirstPort group.
“This is a great milestone for both businesses, which will see us learning from each other and working together to continue to drive the highest industry standards and realise new market opportunities.”
Luke Sanders, Group Managing Director of Mainstay, commented: “This is an exciting opportunity for the Mainstay Group to continue to deliver a market-leading service, while benefiting from the skills, expertise and efficiencies available being part of a larger group. I am very much looking forward to working with FirstPort, as the right partner for our next phase of growth and to help build on Mainstay’s achievements and successes to date.”
About FirstPort
FirstPort is the UK’s leading full-service residential property manager, caring for more than 196,000 homes in England, Wales and Scotland across 3,900 developments.
With over four decades of experience and 3,200 employees, FirstPort works with developers, investors, freeholders and over 300 Resident Management Companies.
FirstPort is a member of the Association of Residential Managing Agents (ARMA), the Association of Retirement Housing Managers (ARHM), and Property Managers Association Scotland (PMAS). It holds a Five Star Rating from the British Safety Council, has been awarded the British Safety Council’s prestigious Sword of Honour, is an accredited Safe Agent and belongs to The Property Ombudsman. FirstPort holds a Silver Investors in People accreditation and has been named as one of the UK’s Top Employers by the Top Employers’ Institute for the last two consecutive years.
www.firstport.co.uk
About Mainstay
Mainstay Group is an independent residential property and asset management company providing leading services to over 80,000 homes and award-winning commercial facilities management across the UK.
Established in 2000, Mainstay works with many of the top 20 homebuilders, institutional investment funds, landed estates, resident management companies and private investors to maximise value and drive better returns by pioneering a community and people centric, empowered approach to service and innovation.
Mainstay is accredited to ISO9001 and OHSAS18001, is a member of the Association of Residential Managing Agents (ARMA) and is a proud Investor in People.
www.mainstaygroup.co.uk
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I would like to say it couldn’t make it worse but given the experience I have had of First Port (in all its incarnations) over 20 years, I know they are capable of plumbing new depths of bad service.
Nothing will change ,we will still be ripped off regarding all aspects of management, building maintenance ,insurance, electricity , alarm call system, as First Port has a finger in everyone of these and every time we get ripped off
I feel sorry for the customers of this new company, after 13 years or terrible service from FirstPort (and all their other names) I think they’re in for a world of hurt.
And I’m not alone:
https://www.trustpilot.com/review/www.firstport.co.uk
Firstport have had some interesting times of late?
Initially allied to the Tchenguiz Family Trust Portfolio, they owed much of their appointments to the patronage of TFT.
As has been reported on About Firstport figures obtained suggest that 81% of all their management contracts are freeholder/developer derived, leaving only 19% of their contracts being entered into freely by residents choice.
Firstport are not immune to financial problems or controversy?
Be that the question of how they obtained the leaseholds of residential house manager’s flats?
How they subsequently came to be granted mortgages on them?
How they came to sell and rent back 275 house manager’s flats to the giant People for Places Group?
How an open and shut case of price fixing against at least 65 retirement developments failed to result in a substantial fine?
The argument of first reporting immunity is laid bare by the fact that before their admission of guilt the matter had already been reported in the Sunday Times and had been reported to the SFO.
Having collapsed into administration and Tchenguiz failing to buy Firstport back out of administration, they were always struggling. financially. Their situation not being helped by onerous interest charges due to their rescuers of between 9% and 15%
Money was bleeding out the company.
Eventually Electra (their backers pulled out. A complex rescue was arranged whereby £10m of share debt would be written off. House manager’s flats were to be sold. loss making divisions were to be sold off (ironically one such division was sold off to Openview as Openview were independently tendering for that division’s contracts.)
The property management side of Firstport was separated from the rest of the group with a new holding company created.
This freed up the warden call division from any liabilities. This was a good move for Firstport as the mark up on warden call services has been put at an astonishing 61%.
Eventually Equistone a private equity firm whose existence relies on extracting value from their assets put in £81m, which combined with the house manager’s flat sales wiped out their £40m net debt and the result is the merger with Mainstay we see announced today.
Equistone put up 81m
So finally Firstport Property Services Ltd including Firstport Retirement (a brand name) is to merge with the Mainstay Group Company – Number 04002715
Firstport Retirement long ago began to unilaterally. transfer Operational Costs that are included in the Management Fees all residents are charged and is included in the Service Charges paid, thereby Duplicating Costs and increasing their Revenue Streams by many thousands of pounds each year, items include:-
i) Development Managers Training – c. £1,000.00
ii) Account Preparation Fees – c.£700.00
iii) Asset Management Plans – £6,000.00
These items above, are included in the Management Fees and yet show up as separate items on single invoices, but not showing as an item within the Service Charges sent out.
Residents are entitled under the Landlord & Tenant Act 1985 to be provided with the full Expenses Files containing the Trial Balance/Audit Trail which shows all the Invoices paid for that year.
The problem arises because the regulations allow 18 months to pass before the Expenses Files are available due to the Managing Agents being given six months after the end of the financial year to have the accounts audited, hence the 18 months.
So to begin with Request
S21 Request for a summary of relevant costs
S22 Request to inspect supporting accounts
S23 Request relating to information held by the superior landlord
Also,:
If the Managing Agent Fails To Comply:-
S25 Failure to comply with S 21 S22 or 23 an offence
It is a summary offence for a person to fail without reasonable excuse, to performs duty imposed on him by S21, S22 or S23
A person committing such offence is liable on conviction to a fine not exceeding level 4 on the standard scale.
A merger of thieves & crooks I am sure they will get on very well together. If you are thinking of buying a flat & either of these are the managing agent don’t buy it.
Hi I own an apartment in the West Midlands the developer bought the property in 2014 and converted it into lovely apartments but its lease not a very good one. There is a clause that states landlord is responsible for all debts incurred by tenant. That’s fine nut when the utility company do not send elec invoices for z19 months then demand nearly £4000 bills and hides begin this clause. Also the Management Team appear to raise the service charges to £1000 for 6 months in an area which is under regeneration grants. They do a poor job in my opinion and make so much money out of us they have moved to more glamorous premises.
This merger comes at a time when many Firstport managed developments are challenging exorbitant charges.
They are challenging Firstport’s recent decision to charge Account Preparation fees as a separate item when traditionally they had been included as part of their management fees.
They are challenging Firstport to produce development expense files.
They are challenging Firstport for charging maintenance fees for areas of developments that do not belong to the development.
Currently many developments have been served Section 20B notices as development accounts are severely delayed.
How much due diligence mainstay have actually done is a matter for them?
But I strongly suspect they will come to rue the day they ever got involved, especially as it is more than likely that forthcoming legislation will make it easier for residents to exercise their right to manage, and government is increasingly concerned about the emergence of giant property management firms that use their dominance to skew the market in their favour.
How easy for example it would be to quote a very low management fee to a developer and once ensconced in the development raise prices knowing that residents are captive and powerless to act.
Legislation to help Leaseholders out of the grip of this company cannot come fast enough. When it comes to charges they hide in the shadows because apart from clearly being involved in some sharp practices with quotations & choice of contractors , they have inadequate staff who have no experience of property management that increase the service charges by their lack of financial experience but deny any responsibility when challenged .
Michael
Firstport Retirement have introduced to existing developments for year 2021/22 another Revenue Scam.
This scam brings in the Maintenance of Fire Systems, for the first time as a separate heading in the Service Charge Budget.
This is a duplication of the Door Entry Emergency Systems which is already a scam, as it is purely a management contract for them to notify a locksmith within 24 hours if the communal doors fail.
We do not have any communal doors and we have a handy man who can be called who can replaces or repairs locks.
This scams costs have trebled since OpenView took over from Appello.
This is the third scam recently introduced and its budget cost is £1,200 for works already included and is another Operational Cost added to the Service Costs..
First Port do a better job than S0litaire ever did but their charges are increasing much more than the rate of inflation. One particular problem is that they regularly change property managers which delays when promised work (eg carpet cleaning or redecorations of communal areas) is done. Each new property manager also changes contractors for various works, not to save money and give better service, but for personal reasons. And none of them are in the job long enough to keep their long term promises.
As the majority of flats are rented out with the leaseholders happy as long as rents are coming in regularly, it is almost impossible to get enough leaseholders together to agree to go for Right to Manage. We are therefore stuck with the property management company who take advantage.
I am a leaseholder with Mainstay as the managers. I informed them in Oct 2019 of moss growing outside my windows. I am on the 5th floor and the wall cannot be cleaned from inside. They said they would fix it. I repeatedly reminded them subsequently that the problem had not been fixed. Now the moss is thriving and is all around my windows on the outside. So I am not at all happy with Mainstay