A leaseholder of a property at Maltings Court, Stratford-upon-Avon, has settled an action to regain wrongly demanded ground rent and his court costs … corresponding with E&M and Peverel / FirstPort from Tokyo.
In spring 2011, Geoffrey Powell, and a number of other leaseholders at the 21-flat Maltings Court, received ground rent demands dating back to 2005 from Estates & Management, that is, Tchenguiz.
Mr Powell paid the £100 demanded even though he had already paid his ground rent after receiving a debt collecting notice from Centurion Collections threatening county court proceedings.
Perhaps infuriated by this high-handedness, Mr Powell decided to pursue the matter from the other side of the world launching a small claims action.
By November 17 2014, Peverel (it was still then called) was acknowledging that the ground rent had been demanded twice from Mr Powell “in error”. But it also rejected Mr Powell’s claim that either it or Estates & Management had “intentionally defrauded you”.
The next day Estates & Management was also writing to Mr Powell, labelling its correspondence “without prejudice save as to costs”.
“We apologise for any misunderstanding or confusion which has been caused in relation to your account. We note you have made a number of enquiries since 2011 about this and our administrators have dealt with each enquiry in a professional and courteous manner.
“We strongly deny any fraud or collusion has taken place and there has been no benefit to any of the defendants in the course of the action described above, we do not consider any element of your claim will succeed at court and would suggest that you discontinue your claim to avoid further unnecessary legal costs.”
The following week Mr Powell suggested that he would drop his legal action in exchange for the residents, who now have a right to manage company, being given the opportunity to buy the freehold for the same price paid by Tchenguiz from Bovis homes.
Initially, Estates & Management automatons replied that they hoped to resolve the issue “amicably”, but by December 1 they replied to Mr Powell’s astonishing proposal regarding the freehold:
“Unfortunately, this avenue is not going to result in an agreement in relation to your claim. We note your strategy to use the litigation as a negotiation tool to achieve another objective and would suggest that you consult a solicitor in relation to the merits of your alleged claim and the likely costs at this stage before matters escalate further.”
It offered to pay back £100, split with Peverel, and disputed Mr Powell’s demanded £205 court costs proposing £35 instead.
Mr Powell rejected this, and just before Christmas 2014 got his £305 pounds, split between E&M and Peverel.
In spite of this Mr Powell regrets not having returned to the UK and fought the matter out in court – not least because other leaseholders received similar demands.
“Well, I faced a bit of a dilemma, to pursue the case into court would involve the cost of flying back to England, hiring cars, staying in hotels, all of which would come to thousands of pounds with very little hope of recovering any of it from the defendants.
“It just didn’t make practical sense to continue so I decided to accept the offer. However, it might have been a whole lot different ball game had I been living in the UK”.
Well done Sir,
Your action whist incomplete has shown again what leaseholders have to put up with.
The action of Companies like Peverel as was, shows that they rely on Misrepresentation and Interpretation to confuse knowing that the elderly residents may just pay these scams.
One in ten will pay straight away?
Two in ten will query then pay?
Two others will not pay straight away but end up paying?
5 will challenge and not pay, but charges are placed for when you leave, so that you do pay in the end, as you want away?
Peverel know these odds???
Essentially, we leaseholders always have to pay as things stand. Even if the freeholder or their agent has made an error, (intentional or not) there are no penalties for the freeholders. That is one of the first things that has to change. Meaningful monetary penalties and stricter regulations, residential freeholders should not be in business exploiting leaseholders en masse. These businesses are often non UK reg and little nest eggs of tax avoidance. It is a mystery why the government is going after small Buy to Let Investors (who bought a flat or two as a form of pension scheme,) and yet they leave the big non dom sharks free to roam…
The activities of some individuals and companies involved in this unregulated business beggar belief. Chas and Leaseholder in their respective comments identify the real purpose for this: sordid and evil trade: which is to extract bogus sums from gullible and vulnerable leaseholders
The archives of the former LVT and it’s successor the First Tier Tribunal-Property.confirm the continuing practices of those who prey as vultures on this vast body of “tenants” through a ruthless regime of exploitation, intimidation, and harassment.: a regime backed up by use of the threat of forfeiture.
The threat of forfeiture to extract bogus sums includes, as the experience of Geoffrey Powell shows, demanding payment of Ground Rent long after such payment has already been made and, in cases where the “agent” is a subsidiary of the freeholder, it extends further across the full range of service charges, in particular, buildings insurance.
In pursuit of such ill-gotten gains, it should be no wonder that such unscrupulous individuals now go to exceptional lengths to prevent leaseholders acquiring RTM under any pretext, using the services of unprincipled lawyers for this express purpose..
These practices are not isolated and are well documented. It helps if the sorry leaseholder is one who’s English is not their first language or who, as in the case of Mr Powell, lives overseas. The addition of equally bogus “late payment” and “administration” fees and divers “charges” quickly adds to a tidy sum; oftentimes leading to an intended County Court Judgement by Default. Even with the later obtaining of a Set Aside Judgement, the demanded sum (substantially inflated) usually remains registered as an item in the following year Ground Rent demand, so that, in this rapid turnover in the buying and selling of flats in the leasehold sector, the seller ultimately pays to ensure a speedy exit.
In short, notwithstanding whether the LVT or First Tier Tribunal-Property has already determined such charges to be unreasonable, or whether any Judgement by Default has been Set Aside, in the final analysis, as Chas states, it is easier for the leaseholder to pay to get out.
Moreover, in this sordid business there can be casualties, particularly among the elderly. When a 93 year old lady dies 48 hours after receipt of a “Notice of Intended Recovery Action”, in respect of a buildings insurance demand already determined unreasonable by the LVT, it is not unreasonable to believe she died of shock consequent on the threat of her freeholder to serve notice under section 146 of the Law of Property Act 1925.
Regrettably, LEASE, the advisory service put in place by Government, and supposedly in part as a protective umbrella for leaseholders, lacks all clout: simply providing advice and little else.
It is imperative that LKP/Campaign against retirement leasehold exploitation, Sir Peter Bottomey, and Jim Fitzpatrick MP now advance the case for leasehold reform without delay, as the continuing unchecked progress of this reincarnation of Rachmanism must now be brought to a complete halt and proscribed forthwith.
Yes – but in practical terms what can we do- apart from contacting our MPs?
Yes, MPs but also information. Get the abuses publicised. That is authoritative correct information, no just iPad warriors sounding off.
Even this site is read by just about everyone concerned in this sector, including politicians and civil servants. It does make a difference …
One practical change would be to end forfeiture: no one attempts to justify the cash windfall involved and the threat of forfeiture lies behind much freeholder bullying.
COMMENT DELETED – LKP
The role of LKP/Campaign against retirement leasehold exploitation, Sir Peter Bottomley, and Jim Fitzpatrick MP in bringing details of the abuses continually suffered by leaseholders to the attention of key policy makers in Government is proving very effective, and it is important that this combined effort is widely supported and succeeds.
It is already clear that unscrupulous individuals and companies engaged in this sordid industry are fast becoming more than wary of the attention their activities receive in the LKP/Campaign against retirement leasehold exploitation columns, and Sebastian O’Kelly, Martin Boyd et al, are to be congratulated for this significant development..
As advocated by LKP/Campaign against retirement leasehold exploitation, “All blocks of flats should be built with a resident’s management company controlled by leaseholders’, and for this purpose the target solution should be to outlaw the custom of house-builders selling the Ground Rent title in uncompleted new developments, as well as selling existing freehold titles covertly; that is without the prior knowledge of qualifying leaseholders (a criminal offence). This business has grown into a multi-million pound freebooting industry that must be reined in and proscribed.
The wholesale assault presently being made on qualifying leaseholders seeking to acquire RTM is proof positive of the substantial ill-gotten gains ready to be made by the unscrupulous few and, which, it should be noted are not confined solely to service charges or buildings insurance.premiums.
The real business seems to lie in the creation of “assets”. In its simple form, the manipulation of carried forward annual sums showing up on a year on year Ground Rent demand, when multiplied by 1000’s, becomes an “asset” for the purpose of procuring loans from financial institutions for the on-going related purpose of buying up yet more freehold titles. Note: where is the due diligence of the lending institutions?
However, one area that has so far escaped much notice is that of Lease Extensions. or more pointedly the business of the new breed of Ground Rent title holder, illegal or otherwise, making “informal lease extension” offers.. It goes like this:
“…..in respect of your request for a lease extension, The good news is the Freeholder is prepared to grant you a lease extension on an informal basis…”
Term: 125 years
Ground Rent: £350 pa linked to RPI plus 2%
Discounted legal fees £850 +VAT.
Followed later by “…best and final offer’
Term: 125 years
Ground Rent: £300 pa linked to RPI plus 2%
Discounted legal fees: £650+ VAT
“Please be advised that the above offer is open for a strict time period of 14 days from the date of this letter, completion must take place within a further month of your acceptance. ”
Informal lease extension offers are a blatant attempt by unscrupulous freeholders to reach non-statutory arrangements directly with leaseholders. Acceptance of any such offer leaves the unwitting leaseholder devoid of legal recourse and ensures the freeholder has a massive income, designed to see Ground Rent double at least every ten years, with an additional 2% pa added on!
Such offers are usually made when the lease nears or slips under 80 years remaining.. In this way the freeholder takes a standard lease with a normal peppercorn rent of say £20-40 pa and turns it into a money making instrument, which then becomes a new “asset” to support further lending.
As a large number of such flats are owned by particularly vulnerable elderly leaseholders, it is vital that warnings are circulated widely concerning this scandalous practice.. It is not unusual for an elderly person to desire to leave some form of income as a future contribution toward school/university for grand children etc, and the promise of a speedy completion of an informal lease extension with “discounted” legal fees can appear at first glance too good to kiss
It should be missed altogether, and it would help if LKP/Campaign against retirement leasehold exploitation highlight this. In the final analysis, all lease extensions should be determined by the First Tier Tribunal-Property and none other.
Now that is good information. I did not know about any of this, is it legal and if not are there are penalties?
Thank you for your kind words and your excellent comment.
It is so important that informed leaseholders comment on this site and bring in new information.
We are very happy to publish proper posts by contributors if they have expertise or experience of a particular issue.
Regarding the sheer banditry involved in privately negotiated lease extensions or variations, we will shortly be reporting on a particularly egregious case, which we trust political patrons will ensure gets the widest media attention.
The “Ground Rents for sale” business is mushrooming and as stated above should be outlawed.without further ado.! Henceforth, as LKP/Campaign against retirement leasehold exploitation advocates, “all blocks of flats should be built with a residents’ management company controlled by the leaseholders”..
The present state of affairs, which permits an uncontrolled, unscrupulous, and unregulated, business to persist, only serves to act as conspirator in an industry where the custom of the trade is deceit
It should not be the case for any flat buyer to wake up one morning only to discover he/she has fallen into the clutches of rogues.. And it should not be the case that existing long leaseholders wake up and discover they too have fallen into the same clutches.. This is precisely what is taking place in this wild western style drive for virtually “free land.”..In this freebooting business “F” is a five letter word!
In this comment, I will confine my remarks to the latter trade,: that is to the sale and purchase of the freehold title to established residential property developments where the qualifying long leaseholders have the right of first refusal.
The Landlord and Tenant Act 1987 (“the LTA 1987”) provides that landlords wishing to sell the freehold interest in property where Part 1 of the LTA 1987 applies must first offer qualifying leaseholders the right of first refusal.. Prior to the Housing Act 1996, some property companies sought ways round this requirement and, as there were no criminal sanctions in place, the easiest loophole was through use of an associated. company,. By this means, the freehold interest could be transferred to the associated company and the share(s) in the associated company then sold to an unrelated buyer.. In this circumstance, there was no relevant disposal as what was being sold was a block of shares and not an interest in property. This was remedied by the amendments provided by the Housing Act 1996, and criminal sanctions now apply to enforce observance with the requirements of the LTA 1987..
Any arrangement whereby a buyer and seller agree payment of consideration for the freehold title in land where section 4 of part 1 of the LTA 1987 applies is a disposal that requires to be brought to the prior attention of the qualifying leaseholders so that leaseholders are made aware of their right of first refusal, and any letter served on behalf of the seller or the buyer purporting to persuade or infer to leaseholders that notice of right of first refusal is not required and which fails to provide express details of the terms of the transaction is a criminal offence…
Residential property companies owning the freehold title to premises subject to these provisions are fully aware of the procedures and obligations that apply, and it should be noted most follow the rules. And it should also be noted that where a sale has taken place, the qualifying leaseholders can force the purchaser to resell to them “on like terms” to the original disposal, with the leaseholder right continuing to bind the buyer and any subsequent buyer. thereafter..
However, as the industry is wholly unregulated, the practice of buying and selling freeholds where leaseholder right of first refusal applies is open to wide abuse, and this does bring vast numbers of leaseholders into the clutches of the bandits involved in this illegal procurement activity;
And the tens of thousands of unprotected leaseholders who find themselves in this sorry state, discover only too quickly how the same bandits go about their business.: from false service charge demands, to bogus fees and other divers charges,leading ultimately to the lease extension racket.explained in the earlier comment above.
Regrettably, there is a body of unprincipled legal advisers about who are ready willing and able to do the unquestioned bidding of their clients engaged in this business.The conduct of such advisers, specifically in withholding documents and through the black arts of procrastination, obfuscation, and subterfuge, is such that it is both improper and negligent as no member of the legal profession who was reasonably well informed and competent would have given or done or omitted to do. .
Tens of thousands of long suffering leaseholders must now be rescued from the clutches of these evil and criminal gangs, and those who willfully aid and abet them must face the maximum discipline. of their profession.
The documents relating to the above comment are available for provision to all appropriate bodies.
From Chas …
I also comment on these issues as I have seen the effects that a simple 29 flat development where we have no communal areas under cover. We have residents, pensioners average age over 80, who have decided that this will probably be the last house/flat they purchase on the last part of the journey of life. They like me who purchased ( I was 60 then now 70 this year)
My father, taught me that life was not always fair, but he said that I was not to add to the unfairness.
We had an Area manager who we never met until 2008/09 and he was a very poor communicator in both verbal and written communication. We would see 4 times a year at meetings. If you were lucky he would answer a problem asked every 3 months, which would be an equivalent to one verse of a song. The next meeting another verse and so on. It would take him 3 years to sing that song, by when most residents lost interest. We had his poor leadership for over 10 years before Peverel/Firstport decided he was not up to the job, and they moved his area, to where he could do least harm.
This AM was involved as Manager during the Price Fixing and he claims that he knew nothing about it.
Why was the Price Fixing allowed to continue from 2004 to late 2009, the Technical Staff knew so did Area & Regional Managers, but were under instruction to turn a blind eye. This made them guilty of the fraudulent behaviour that was happening even though they may not have been directly involved.
Peverel Retirement now Firstport Retirement paid out £100K yet never apologised or accepted responsibility even though the OFT knew there was more developments Price Fixed than Peverel Group had owned up too.
Our job, as those, who can uncover the unscrupulous behaviour, by these Peverel People, must continue to as the very people who deserve to have peace, when elderly. Instead they are preyed on as easy pickings, by companies that cheat pensioners, simply because they are able too, because we trusted them.
That trust has evaporated and every day new facts are uncovered and slowly we are uncovering these nasty cruel people who treat us with contempt, simply, because we allow them, by doing nothing.
Well done Alex, I will provide any help I can.