The Times today reports how leaseholders are facing “gargantuan” bills for fire marshals and Grenfell cladding removal from the likes of Vincent Tchenguiz and Will Astor.
Up to a 100 private blocks of flats are affected, it claims.
“The situation has echoes of a leasehold scandal this year when construction companies sold houses with ground rents that doubled every ten years, leaving owners with unsellable properties,” wrote Andrew Ellson, the consumer affairs correspondent.
Jim Fitzpatrick, Labour MP for Poplar and Limehouse and a patron of LKP, is quoted saying: “Leaseholders are too often subject to unreasonable charges and the process to challenge them is difficult. The cost residents face to make their home safe show the system is failing.”
Sebastian O’Kelly, of LKP, said:
“Surely freeholders can dig into their pockets to pay something towards these gargantuan bills?
“They receive considerable and undeserved income from ground rents and other charges after all.”
The Times article features New Festival Quarter, near Canary Wharf in London’s Docklands, where the freehold is owned by Adriatic Land in Will Astor’s Long Harbour fund.
Last month it charged the 400 leaseholders £38,400 a week for 18 fire marshals, said the newspaper.
Some residents claim the marshals do very little, cost a fortune and dose on the job.
Mr Astor claims the leaseholders are “legally obliged to cover the cost” of fire marshals and removing the cladding , says the Times, but it is trying to get compensation from housebuilder Bellway.
The Times also referenced Citiscape in Croydon, where Vincent Tchenguiz’s interests are the freeholder. These interests are ultimately owned by the so-called Tchenguiz Family Trust in the British Virgin Islands.
New Festival Quarter is described as being owned by a fund based in Guernsey.
The article also features Heysmoor Heights in Liverpool, where residents say “Mr Astor has demanded £18,000 – £5,000 for wardens and the rest for cladding repairs – for the year”, equivalent to a quarter of the properties’ values.
A spokesman for Mr Astor is quoted saying that here, too, the freeholder is pursuing a claim against the original builder.
The Times also reports Mr Astor’s fund lending money to leaseholders to cover the immediate costs.
LKP has established that the freeholder is also offshore, Abacus Land 4 Ltd in Guernsey.
The Times added:
“Sebastian O’Kelly, of LKP, said the leasehold system created an incentive for the freeholder to cover their own back, knowing someone else will pick up the bill.
‘Obviously, costs controls are less a priority if you are not affected directly and rack them up on behalf of others.’ ”
This is an absolute scandal. If the cladding is sub standard then surely it is for the developers to foot the bill. Why , How were health and safety certificates issued if the the cladding is a fire hazard.?
Does anybody even believe that the “ Fire Marshall’s” are being paid £30’000pa ?
Are these so called “ Fire Marshall’s” experienced fire fighters, out of work bouncers,or mates , family members of the Managing Agent of the block?
This is utterly shocking and utter madness.
The leaseholders had better start revolting- and soon.
Why can’t the leaseholders refuse to have fire wardens. There is no limit on the costs and yet they are not even allowed to have an opinion. When the lawyers for each party start disputing liability the sky’s the limit on these costs.
The aftermath of the Grenfell fire tragedy is yet more misery for tenants in blocks with the same cladding. Javid thinks that saying ‘enough is enough’ is enough. A pathetic response.
No consumer protection for thousands of tenants – Simply legal demands to pay up and shut up is politics as usual.
Leaseholders at the affected blocks must not just simply give in to legal demands for spurious amounts due. They must band together and fight. If they believe that “ Its too much hassle” or “ not enough time “ or gotta look after the kids” then they must put up, shut up and reap what they sow and not expect to others to fight their battle.
I am very scorched earth regarding this issue. I am the Daughter of an activist and believe citizens must play their part.
If all leaseholders rise up the then Govenment MUST bow to our demands. The power is in our hands.
Why the hell cant more leaseholders comprehend that fact?
you go girl!
The doubling ground rents and the cladding fiasco are not remotely comparable. Leases that developers drew up were perfectly clear as to the terms of the ground rent; there was no hidden small print, A ground rent that doubles 33 yearly or even 25 yearly is not a problem, the latter is equivalent to a compound growth rate of 2.7%; considerably less than the hstoric rate of increase of prices. How a solicitor could have acted for a buyer and not have warned off a buyer as to the demerits of a ten year doubling ground rent amazes me.Any such solicitor may well be liable for damages for professional negligence. The level of ground rent was clear in black and white in the lease and any prudent buyer might well have asked to read the lease. However no such buyer could have foreseen that the cladding that was being put on even a few years ago would prove to be disastrous. I dont think one can blame the freeholders, most especially as with Grenfell the cladding was specified by a tenant appointed management company. The Building regulations clearly were wanting, and these are set out by Government, and that being so Government must shoulder part of the blame. My own view is that the government should pitch in and provide soft loans (ie at low rate and over many years) so as to assist in the rehabilitation. Ive never liked external cladding other than in some cases with an insulating cement render (as opposed to panelling) and the cheaper and safer approach is to fit plaster boards with phenolic foam backing to the inside surfaces which causes a small degree of upheaval to occupiers but can actually be done very quickly with good planning. You cannot possibly compare a patent situation such as an escalating ground rent which was there to be discovered in the lease and the cladding, the dangers of which was barely known of outside a small circle of construction professionals.
At the moment there is no incentive for agents/freeholders to keep costs down. Most agents generally receive a percentage of the total cost of any major works, (and thats the honest ones, only god knows what the dishonest ones do…) Even if they are guilty of gross errors/mismanagement, its difficult to prove. Of course, RTM’s and share of freehold managers, could still make mistakes and bad choices, but at least it will be their own mistakes.
Land value just keeps on rising, so if the freeholders do nothing at all, their assets increase. In case anybody still fails to understand how this works: short term the freeholder can demand annual service charge payments for repairs such as cladding and ground rent without having to provide much in terms of quality, and long term the freeholder also gets the value of the land which keeps on growing. Can you think of any other investment that does that?
If leaseholders of flats or houses are paying for the maintenance of their properties through service charge then they are taking on similar responsibilities to a freeholder of a house or freehold flat Therefore why not give the freehold to the leaseholder ?
also in this case I don’t think the government should enrich Astor and Tchenguiz investments any further with soft loans or anything else. As a tax payer, I vehemently object to my money being used perpetuating fleecehold fiascos, Same with Help to buy schemes which do nothing to solve the housing problem
I hear you Fleecehold reform. I just wish there more campaigners with your spirit and verve.
The campaign really has to move up several gears. Marchs on Downing Street. Our friends in the North hiring coaches to come to London en masse to join the protest.
Remember the Poll Tax March? 2018 has got to deliver at the very least Regulation of Managing Agents and ALL ground rents zero or peppercorn.
I am “ counselling” a large minority of leaseholders mainly retired who are ill with worry about the extortionate bills they are made to pay.
The rogue Managing Agents with their gangster tactics, who have no compunction whatsoever at Threatening leaseholders in their late middle age with Forfeiture for non payment of monies not due and are seemingly allowed to get away with such gangster tactics with impunity.
This makes me very angry indeed and it must not be allowed to continue.
These rogue agents cry “Go to Tribunal” knowing full well these leaseholders at a “ vulnerable “ stage in their lives will not do so.
LEGALISED EXTORTION IS BEING CARRIED IN ENGLAND AND WALES IN 2017.
LEGALISED EXTORTION IS BEING CARRIED OUT BY FREEHOLDERS AND RESIDENTIAL MANAGING AGENTS IN ENGLAND AND WALES IN THE YEAR 2017.
Just think about that folks and then decide if it is time to up the campaign game?
The passing of Christine Keeler reminded me of the Profumo scandal and the claims (denied) that the late Lord Astor had used his country pile as a brothel .He was going to be charged with “living off immoral earnings” until the establishment intervened.
Now we have a member of the Astor family buying up freeholds.
What is it about Astor’s and immoral earnings?
You can put lipstick on a pig but it’s still a pig. I honestly don’t know why that phrase came to mind when I read your comment It just seemed apposite!
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