Leasehold owners are increasing fighting back against councils loading ‘admin’ costs for routine work.
Labour councillors in Tower Hamlets, in east London, have called on the council to scrap a 17 per cent increase.
The Leasehold Knowledge Partnership has evidence of 29.95 per cent admin surcharges for leaseholders in Haringay, north London, on simple repairs.
The issue has been raised with the Office of Fair Trading for consideration in its report leasehold management by commercial chartered surveyor Joe Darwell.
He owns a leasehold flat in the borough in a four-unit council-owned block.
At Tower Hamlets councillors voted to endorse Labour’s call to tackle the rising charges faced by leaseholders in the borough.
Jim Fitzpatrick, the Labour MP for Limehouse and Polar, has probably the richest and poorest leasehold owners in the country in his constituency, which includes Canary Wharf and the council estates of the Isle of Dogs.
He raised issues at the prestigious sires West India Quay and Canary Riverside in the Commons on December 5 last year. You can read our report of the debate here
Labour criticised the current system operated by taxpayer funded Tower Hamlets Homes as “opaque and representing very poor value for money” as it meant that leasehold owners were regularly being charged for services they hadn’t received.
Questions were also raised about the 17% “overhead” costs which are added to many charges faced by leasehold owners. The councillors called on Tower Hamlets mayor Lutfur Rahman to use his executive powers to reverse the 17% increase, yet received no response.
The councillors demanded an explanation from the Mayor as to why only five of the fifty four recommendations of a landmark review into leaseholder charges had been implemented even though the review was completed in May 2011.
Full report can be read here
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Florrie’s Law means new £15,000 cap on repair bills for council leasehold owners
Heirs of empty retirement leasehold flat now face doubled council taxes … on top of plummeting re-sale value, on-going service charges and an exit fee if it ever does sell
Whistleblower accuses contractor of cheating … adding to leasehold owners’ misery
Haringey certainly do charge 29.95% mark-up on some repairs, I have their confirmation of this in writing. They also charge me £269.45 per annum for “management” when they are so bad at performing simple management tasks it’s a joke. As far as I can see they only started charging the annual management fee once they had set up the “Homes for Haringey” arms-length management organisation. One can’t help but wonder if they set it up deliberately to charge agency management fees that as freeholder alone they could not?
I have said this many times the scale of the abuses of the likes of Peveral pales in comparison to those in local authorities and hosuing associations. There is common attitude, we are landlords, its our property. Many of the old “surveyors” and “engineers” were TUPE’d to these partner contractors transferring those admin fees or surveyors fees for contract administration into the contract prices as, they argue, partnering is different to hiring a contractor. The wheel has turned and they are seeking to go back to adding on those fees, eventhough you are hard pressed to find staff doing the job that is being charged for. Rather like ‘erm, Peveral.
“Management fee” should create legal responsibilities and a day to day service. I always challenged 0ur management and asked them to have a log book and log their inspection regularly and each time after visiting the building send short email of report to leaseholders.. Otherwise what is Management fee for?( they did not even wanted to know).
Administration fee also .if is agreed should be calculated hourly or …
Admin Charges should be for the need of leaseholders/building If they thing is necessary.
Is wrong, is illegal to have different plan for leasehold owners money. and should be stopped.
One of the suggestions that I made to the OFT was to extend the section 22 rights to inspect invoices to be extended to the underlying contracts, which would include an agents contract. Enforcement should be removed from local councils so that they are held to account as landlords, and to the same standards.
AM
The section 22 rights allow us to check the Expenses Files (EF) am I correct?
I have checked the EF and the contract document for our Warden Call System 2008/09 which was won by Cirrus who tendered £4,000.00 less than Glyn Jackson who along with Cirrus were found guilty of Price Fixing and Tender Rigging.
Glyn Jackson has been liquidated and will not pay the fine which OFT handed out.
We are paying £637.00 a year for a Cirrus Contract, that Peverel Retirement will not explain what the contract is for?
So we have paid over the odds for a Warden Call System that was acceptable as not outdated by our insurance company.
We are trying to find out if we were Price Fixed as we had both Cirrus/Jackson tender for our work and then after Cirrus won the contract we end up paying a contract retention £637.00 for nothing as no work by Cirrus, has been undertaken on our development as far as I know since 2008 which was not covered by any Cirrus Contract.
We do not have any communal doors, only 14 first floor, standard door entry systems?
We do have CarelineUK who as part of the Warden Call System fitted 5 emergency pull cords, an emergency phone, and a pendant to wear to each flat?
All this for only £750.00 for each flat and Service Charge total of £637.00 a year for the Cirrus Contract, which is an amount paid since 2008/09 of almost £4,000.00?
This does not include the £1,015.00 a year we pay to CarelineUK for monitoring into the Service Charges?
CarelineUK is also a Peverel Company?
Our insurance is covered by Kingsborough Insurance Services Ltd another Peverel Company?
Sorry I have bored myself silly and will now close dowwwwwnnn?
Yes, but that only gives limited information. Currently in order to see those files a 2/3 majority must exercise the “surveyor/audit” 87 Act rights. I have retained that right in my OFT suggestion but lowered it to 55% and no need for an RTA..
AM
Thank you, I will begin the process, but as there are expenses files why would the documentation not be together, unless there is some thing to hide?
I have tried to hard to explain to our Area Manager who cancelled a Budget Meeting last Friday 2 hours before we were due to travel to the meeting. This is the second meeting that has been changed in a six month period?
Our Area Manager has worked for Peverel Group in the 1980s and must have been working with them when they were sold for £30million from McCarthy and Stone when they were forced to sell.
Peverel was the name of the division who was Managing Agent for McCarthy & Stone?
The closeness and the links to each other was considered not suitable as they were Freeholder, Landlord and Managing Agent.
This is similar to how our development ABC is now when a Peverel Group Company, Peverel Managing Services Ltd, (through Meridian Retirement Housing services Ltd) are our Landlord and Peverel Retirement Division is our Managing Agent? they are known as Peverel Retirement.
We have dealings with:-
Peverel Group
Peverel Services Ltd
Peverel Management Services Ltd
Peverel Retirement Division
Peverel Retirement
Kingsborough Insurance Services Ltd
Careline Communication Services Ltd
We also had a painting company called Mitte Ltd or similar who I believe has undertaken other painting programs for other Peverel Retirement companies and comments friends?
Since we now know that Peverel/Cirrus were involved in Price Fixing and Tender Rigging, why are we still paying Cirrus over £1,700 for Monitoring and Door Entry & Emergency Systems.
Cirrus are still being awarded Peverel Retirement Contracts for Warden Call Systems and Fire Systems?
I noted that this year Peverel Retirement has changed some of the Service Charge Budget, Sub Headings:
Remuneration is Staff Employment
Relief and Deputy Costs are Relief Costs
Office Phone is: Telephone
Monitoring is Monitoring Service
Sundry Expenses & Petty Cash is Sundry Expenses
Risk Assessment has been Added
Council Tax has been Added
Gas has been Added
Light Bulb Replacement is Added
Door Entry & Emergency Call System is Door & Emergency System
Estate Management
Accounts Administration
Accountancy & Audit Fees
These have been omitted and Peverel Retirement are not renown for changes that are for the better?
They have also removed the 14% commission that they were forced to show on the back of the Budget Charge which was is a RICS, ARMA requirement?
The right only extends to the invoices and receipts etc not the contract document. The legislation was drafted before CLRA 2002 which extended the fair and reasonable scope and therefore, especially with larger complex buildings and contracts, its hard to evaluate on an invoice alone. Other rights do exist on audit under the 87 Act and I suggested the threshold be reduced to 55% not 66.6%
As a group, form an RTA and “appoint a surveyor” or “management audit” under those rights. If you lack support, the recent findings should attract the interest of those on the sidelines to support a closer look.
In theory there is nothing wrong with a close association or cross ownership- it can lead to considerable benefit to owners, but what is wrong is when someone abuses their position and ignores the obligation for fair and reasonable charges.
If they cancel a meeting then try and hold a telephone meeting instead.
As to the nomenclature change that might be new software or anew accounting package. “New” expenses must be checked against the lease for recoverability.
Mite are a separate unrelated company based in Docklands in London
On commission I am not sure what you refer to the RICS code is here
http://www.legislation.gov.uk/uksi/2009/512/pdfs/uksiem_20090512_en_001.pdf?type=em#page=6
AM,
On Commissions?
I was informed that any commission for contracts i.e. Building Insurance must be shown on the Service Charge Budget Sheet? (SCBS)
When we first complained to Peverel Retirement in 2010/11 the commission was shown the next year on the SCBS for 2012?
This has now been removed and it may have been new software that has been used to change the wording? The new changes include misspelt wordings and other words in-completed.
The new changes to the Year Ending 2015, show th next to the and equipm which should have been equipment?
This is shown in the first 5 lines which begin with the heading INCOM.
This is a typical example of the poor professionalism which is endemic in the checking of Service Charge information Peverel Retirement provide for us year in and year out?
The Peverel Management have been used to this poor level of information which we have now shown that it is not good enough?
It should be declared to clients and tenants under rule 2.6 of the ACOP, but only where the agent receives it. Thats why I said to the OFT that the ACOP should encompass all landlords agents and their associated companies.
With such spelling errors I’d reply in red ink over the typo’s, ” why do you expect me to take you seriously”. Perhaps they outsourced to India….
My brother is a council leaseholder. They have cut call outs for communal hot water and heating to next day which means 3 days if it breaks down Friday night, 4 days if they need parts. That’s 60 homes affected. Charges for heating nearly tripled over 2 years and 75% for hot water. They now want to replace all the boilers which were only installed in 2006.
Last Feb they need to repair hot water pipes installed in 2006, but refused to as “they had spent their budget” and said “wait till April”. After a petition and threat of a sit in ( with the press) at their office, they relented.