… Labour MP Jim Fitzpatrick and Sir Peter Bottomley put the boot in to leasehold profiteers!
Two senior MPs from opposite political parties yesterday delivered hard-hitting speeches in Parliament that highlighted the scandals in leasehold.
And in a sign of the rising political temperature concerning these issues, neither hesitated to name names.
Jim Fitzpatrick, the MP for Limehouse and Poplar which has some of the poorest and richest leaseholders in the country, named the Yianis Group (which is owned by Cyprus-born and Monaco-based millionaire John Christodoulou, who was not personally named), and its management company Octagon Assets, as well as Tchenguiz and Peverel, who he described as “predators”.
Both have been named in the Commons before.
Sir Peter Bottomley waded in to call on freeholders’ barrister Justin Bates “to say out loud the ways in which opportunist managing agents and freeholders can frustrate an application [for right to manage] to the Leasehold Valuation Tribunal or the first stage of the Property Chamber”.
He went on to name chartered surveyor and disgraced managing agent Benjamin Mire, who would have been sacked from his judicial appointment to the property tribunal had he not resigned last July.
“I name Mr Benjamin Mire who, when shown a report by the Judicial Conduct Investigations Office, resigned his position. If he had not, the report would have been made public.
“Because he resigned after reading the report, we do not know what is in it—actually, we do know what is in the report because we know what he had been doing, but we do not have that information formally.”
Sir Peter said “the professional standards bodies for surveyors, bankers, barristers and others should review the actions of some of their members”. He added:
“If someone does something illegal, that is clearly wrong. But someone doing something that is against the public interest should not happen in a profession.”
He declared: “Something needs to happen to make things fair, to give people freedom and to avoid what I have called criminal behaviour in leasehold deals, price-fixing cartels, the cheating of freeholders and excessive exit fees and fiddles.
“Opportunist lawyers are playing the system, and at times the Property Chamber — or the Leasehold Valuation Tribunal, as it was — has not been led with the determination that secures justice …”
Both MPs praised the activities of the Leasehold Knowledge Partnership, and Martin Boyd and Sebastian O’Kelly were also named.
The adjournment debate – in Westminster Hall, not the Commons itself – was instigated by Fitzpatrick in frustration at the “growing issue” of leasehold cheating he is seeing in London’s Docklands.
“Professional and qualified individuals, residents who paid large sums of money for the homes that they inhabit … are being ripped off and exploited by unscrupulous property management companies and individuals who have spawned these management companies.”
He referred to two high profile cases in his constituency concerning Canary Riverside and West India Quay. “Both involve companies owned by the Yianis Group and are operated by Octagon Assets.”
Fitzpatrick criticised the complexity of the right to manage process, which saw residents at Kingsmere in Brighton (who employed lawyer Yashmin Mistry) losing £30,000, and cited the cases of Dennis Jackson, in Battersea, whose dispute over £7,000 escalated to £76,000 in legal fees and nearly the loss through forfeiture of his £800,000 property.
“We have had predators such as the Tchenguiz brothers and Peverel, the largest property management company in England, with many complaints from pensioners and others about onerous and unnecessary maintenance work and about exacting fees.”
Fitzpatrick used to live on an estate “that was previously managed by Peverel, which was previously owned by the Tchenguiz brothers, who were quite notorious”.
He welcomed the Office of Fair Trading investigation into leasehold property management announced two day’s ago, and eagerly anticipates the result of the OFT report into the Peverel / Cirrus price-fixing scandal to be announced tomorrow.
The MP recognized that Labour had not nailed leasehold abuse when it was in power.
“When we were in government, I know that we tried to address the issue to a certain extent. We had a number of stabs at it, but sadly we did not cover it. I am very hopeful that the Minister will be able to say that the coalition are still very interested in the subject and want to address it.”
Andrew Smith, Labour MP for Oxford East (right), said “these problems are a particular nightmare for elderly residents who simply cannot cope with the pressure that they are put under and the extent of the rise in costs”.
Fitzpatrick paid warm tribute to the work of LKP and Campaign against retirement leasehold exploitation in this sector.
“I congratulate the Leasehold Knowledge Partnership both in respect of the full OFT investigation into residential leasehold and the securing of the OFT report into the Peverel-Cirrus price-fixing racket.”
Sir Peter Bottomley urged the government to heed the OFT inquiry into the Peverel / Cirrus price-fixing scandal
“…and consider what the Serious Fraud Office had, and the OFT has, on Peverel, which has been named. I would also like the Minister to consider Mr Israel Moskovitz, who, again, has played the system to avoid his leaseholders in Plymouth getting into dispute resolution, the Leasehold Valuation Tribunal, or the right to manage or the right to purchase.”
While Sir Peter declared that “LKP has saved millions of pounds for hundreds of people”, he gave mild praise to LEASE.
“The government’s Leasehold Advisory Service does its best, but it does not have enough money or resources, and sadly it has to take advertisements from people who should not be advertising at all, let alone through a Government advisory service.”
This is in reference to LEASE continuing to promote Benjamin Mire’s Trust Property Management on its website.
Regarding ARMA, the Association of Residential Managing Agents, “with our former colleague Keith Hill as its arbitrator”, Sir Peter said that it is taking “some of the right ways forward”.
“It ought to be illegal for any managing agent or freeholder to take a commission from an insurance company without having an open book, and without showing that what they are doing is in the best interest of leaseholders.
“… Bluntly, it is wrong that were I a convicted fraudster who came out of jail yesterday, I could set up as a managing agent today without having to meet necessary and obvious standards.
“Such standards are not just for those who live in big flats on the Thames—those with lawyers and expensive flats—but for small people who cannot get anything other than a leasehold property of their own in which to live, hopefully without undue cost.”
Like Fitzpatrick, Sir Peter eagerly anticipated the OFT report into the Peverel / Cirrus price-fixing scandal to be announced, but not necessarily published, tomorrow.
He also criticised the OFT granting Peverel leniency by accepting the fiction that it somehow turned itself in.
“If I were 99 per cent of the market, I do not think I should get relief from the OFT rules by confessing my sins after the Serious Fraud Office had passed my case to the OFT.”
Full debate can be read here