LKP trustee Liam Spender, a leaseholder and solicitor, was in the property tribunal this morning thrashing out the terms of his c£500,000 service charge challenge against his ARC TIME Freehold Income Fund freehold owner and FirstPort at St David’s Square, on the Isle of Dogs, east London.
The hearing under Judge Pittaway saw Mr Spender arguing for prior view of detailed accounts from FirstPort, which were resisted by barrister Aaron Walder and instructing solicitor Camilla Waszek, for Liverpool debt-collecting firm JB Leitch.
Members of the public in attendance included LKP director Sebastian O’Kelly, LKP chair Martin Boyd, MailOnline writer Myra Butterworth and Lucy Brown, a fellow leaseholder at St David’s Square and one of the three, with Mr Spender and Dean Buckner, who articulated the LKP sector-wide levy proposal on developers and cladding manufacturers to pay up for the cladding disaster. Also present was barrister Caoimhe McKearney.
Whatever hopes FirstPort may have had that this was going to be a minor leaseholder rebellion would have been dispelled this morning. The full arguments of the case will be heard after April next year.
St David’s Square, which was build by the prime London developer the Berkeley Group, was the subject of a MailOnline news report two days ago by Ms Butterworth that leaseholders were furious at a £450,000 new intercom system, of which £34,000 will be FirstPort’s management fee.
Leaseholders share fury at £450k cost of new intercom system
Leaseholders told they will pay more than £450,000 for new intercom system The charge includes a fee of at least £34k to the property management company Countryside Communications has billed £700k in rental fees for existing system Leaseholders at a block of flats in East London have been told they will pay at least £450,000 for a new intercom system – and the cost doesn’t even include any new cables.
Mr Spender, whose share of the bill would be £1,138.50, was quoted:
“I’m worried because we have cladding issues here as well, another mess Berkeley Group left us to clean up. If FirstPort is milking us over a relatively small project, I dread to think what it will be like when they are in charge of potentially millions of pounds of cladding remediation spending.”
In an arrangement all too typical of our housebuilders, the Berkeley Group signed a long-term rental agreement with Countryside Communications to provide the intercom system.
Update: Apparently vampiric FirstPort is allergic to Daily Mail coverage (also known as sunlight). They’ve now turned a section 20 consultation on the intercom into an open ballot. I wonder if we’ll get the same ballot options for cladding? @MyraButterworth https://t.co/ZAnFQGLULT
— Liam Spender (@LiamSpender) November 24, 2021
The contract should have expired in July last year, but was allowed to roll over.
Countryside billed £282,935.11 in rental fees in 2019 and 2020, and between 2016 and 2020, it has billed more than £700,000 in rental fees for the existing system, MailOnline reported.
The 2020 rental price works out at roughly £325 per flat per year.
The replacement system is believed to cost about £46 per flat per year, and so residents will eventually save money with the new system – although it will take 18 months of those savings to pay off FirstPort’s fees and Countryside’s exit charge, MailOnline noted.
It also pointed out that no new wiring appeared to be required at the site.
FirstPort was quoted:
“In our role as property manager, we are supporting homeowners and residents to get this upgrade completed whilst ensuring the costs of these works, and disruption to residents, are kept to a minimum.
“We do charge a fee as part of the major works process to cover our time managing the Section 20 consultation and the procurement process, which includes running a tender process and obtaining competitive quotes from qualified suppliers for the work, as well as coordinating the subsequent works on-site and communicating with our customers throughout.’
FirstPort is the biggest block manager in the country with c200,000 flats under management, and owes its origins to the retirement housing sector, where it is still the biggest managing agent.
Formerly Peverel, it was owned by Tchenguiz Family Trust until it was pitched into administration following the arrest by the Serious Fraud Office, on wrong evidence, of Vincent and Robert Tchenguiz, in February 2011. Vincent Tchenguiz employed the company at his freeholds, at one time thought to amount to 1% of all residential freeholds in the country.
In December 2013 the now defunct Office of Fair Trading ruled that Peverel’s electronic intercom and door entry subsidiary Cirrus had operated a bid-rigging racket cheating pensioners with £1.4 million contracts at 65 retirement sites.
Peverel paid out £100,000 as a “gesture of goodwill” and rebranded itself as FirstPort.
No one in the company was punished.
.
Related posts:
Mr Spender goes to war over St David’s Square service charges … and landlord caves in over more than £100,000 buildings insurance commissions on eve of tribunal
FirstPort jacks up accounting fees at St David’s Square by 80% … and then bodges accounts, leaving leaseholders overcharged by more than £17,500
FirstPort charges leaseholders 33% commission on temporary staff recruitment
French resi service group Emeria clears out FirstPort management in take-over
99% of FirstPort’s 3,800 service charge accounts are up to date
Sir Peter Bottomley calls on ministers to listen to ‘whistleblower’ ex-employees of Richard Davidoff (of ABC Estates)
IS THIS ANOTHER FIRSTPORT SCAM
This posting originated from LKP in 2011 by SOK – Precis:-
St George Wharf in Vauxhall, opposite Westminster, has been home to John Major, Chelsea Clinton, and Lee Ryan of boy band Blue among others.
Luxurious: Penthouses at the St George Wharf were selling for £7million and annual service charges started at £5,000 a year.
For four years, the residents fought Peverel (now Firstport) excessive Service Charges stretching back over a decade, as well as the company’s practice of employing its own subsidiaries to provide CCTV and insurance services.
The settlement could not have come at a worse time for Peverel, were placed in administration in 2011.
St George Wharf residents’ association, had signed a confidentiality agreement.
As a result of the secrecy surrounding the settlement, Peverel even issued the absurdly misleading statement that: they were not a party to the Leasehold Valuation Tribunal (LVT) application, (now the FTT) is not one of the named respondents in the case and was not a party to any settlement negotiations. Peverel/Firstport later stated, we should have admitted our involvement earlier and publicly, and we owe the residents an apology”.
Although the leaseholders’ action was against the landlord and developer, St George – part of the Berkeley Group – the tribunal documentation is littered with complaints against Peverel and its web of related companies.
Peverel claims that it is a ‘misunderstanding’ to believe the residents’ complaints concerned overcharging and that the dispute was ‘primarily about apportionment of costs between blocks within the development’.
Although St George, or the Berkeley Group, whose founder is the legendary property figure Tony Pidgley, wrote the cheques to refund the residents, it is understood that Peverel pay their share in the fiasco.
Problems at St George Wharf caused us considerable reputational damage, said Rob Perrins, CEO of the Berkeley Group. This should not have happened and the residents should not have had to fight this for four years. We should have admitted this earlier and publicly, and we owe the residents an apology.
This is similar to the Peverel/Firstport Price-Fixing in 2005/2009 where Firstport decided to UPGRADE Warden Call Systems, were c.20 years old, stating they were OBSOLETE.
At least this time, they stated it was to be an UPGRADE which would save residents money.
Firstport Rigged the Tenders at 65 plus developments so their Sister Company Cirrus/Appello would always be the lowest Tender, then use the losing tenderers to undertake the contract, wearing Tabards with the Cirrus name on the back.
Firstport is the biggest Managing Agent and as such think they are untouchable yet two recent developments have fought back,
Chamberlayne Walk Estate – North Brent – London.
Ravenscroft – Watford – Hertfordshire
Chamberlayne Walk Estate, 104 Leaseholders and 98 Freeholders, where the Labour MP Mr Barry Gardener has been involved in attempting to unravel the Mystery of Firstport for the past 2 years.
Three Property Managers so far have failed to provide the true workings of contracts and is attempting to COVER-UP the failures over a 20 year period, where initial errors continue and new errors occur.
I believe the total cost to Firstport for these errors over 20 years is c.£500,000, no wonder they are refusing to provide the information asked for.
Ravenscroft Development of 74 flats where the Management Fee in the lease states 10%, not the c.20% being charged over the past 20 years. when asked the Property Manager gave 3 wrong answers in emails, before admitting Firstport had been wrongly charging since 2004.
The Property Manager then produced a printout showing the refund was to be c.£31,000. When the printout was checked it became clear:
INCOME HAD BEEN ADDED AS EXPENDITURE.
Now after 3 attempts the Property Manager has again been seen to add INCOMES TO EXPENDITURE.
Insurance Commissions
10% for Overseeing Contracts
Sinking Fund Collections/contingency
Monitoring Income
Levies charged to Contractors
The first checks have been sent to those who know they had been cheated and this is the first of many payments which should include Interest Payments of C.£60,000 and another C.£31,000 once the INCOME has been removed from the figures used to determine the proper Management Fee to charge 10% to arrive at the correct figures which so far has taken over 4 months to get where they are now.
The total figure due to the initial error, I believe will be c.£131,000 plus and there are still the previous 18 years from 1986 to 2004 yet to be checked.