Following a complaint to the Institute of Residential Property Management (IRPM) Martin Paine has chosen to resign his position as a member rather than face investigation.
On several occasions in the last 18 months this site has reported on the exploits of Martin Paine, his FCA regulated wife, Ann Kirmond (Ref no MAK01110), and their various companies including FCA regulated Circle Residential Management Ltd (Ref no 311747).
The list of articles about the Paines appears HERE
Since our original report in January 2016 Mr and Mrs Paine and their businesses have gone on to appear in the national press. Sir Peter Bottomley MP named Martin Paine in a speech made to Parliament on 20th December 2016 as follows: “one crook is Martin Paine” (Hansard column 1334 20th December 2016).
The Paine’s introduced a scheme to provide very onerous ground rent terms on lease extensions at sites where they owned the freehold. The change in terms was set out in such a way that the problem was not spotted by numerous conveyancing solicitors.
Most, if not all, of the leaseholders affected by the problem were not aware that it was the Paine’s who were the landlords as well as being their managing agents. Having introduced these onerous lease terms Mr Paine has sometimes gone on to act as the supposedly sympathetic property manager. He would go so far as to appear to help his leaseholders by suggesting how they might sue their conveyancing solicitor as the cause of their problem.
The Paine’s web site for Circle Residential Management Ltd now states “we understand the need for a more ethical approach to charges, in line with our company philosophy”.
The firm also claims to be in dialogue with leaseholders to help address the problem. Despite this new found “ethical” approach we still receive complaints that Mr and Mrs Paine demand huge sums of money to remove a problem which they themselves initiated. One leaseholder has now made a complaint to the IRPM which alleges that Mr Paine had required a payment of £50,000 to amend his lease to less onerous terms. He asserts that the landlord proposes to record all but £1 of these charges as an “administration fee”. If this is true it would of course mean that only £1 would be recorded at the land registry.
The leaseholder asserted that Mr Paine’s activities amount to a serious breach of the IRPM code of practice. The complainant points to the fact that the member’s code uses phrases such as “professional, honest and fair”, “clear”, “transparent” and “promptly, openly and fairly”. The leaseholder asserted that Mr Paine had failed to comply with this model of behavior.
Normally investigations by any regulatory body take some time and often produce limited results, but not in this case. Having been contacted by Andrew Bulmer, Chief Executive of IRPM, Mr Paine’s reaction was to immediately resign rather than face investigation.
Mr Bulmer wrote to the complainant:
“I wrote to Mr Paine setting out the terms of the complaint against him. He replied in a letter received at our offices 2nd June, to the effect that his dealings with your lease were not with you but the previous leaseholder and he rejected the complaint. Nonetheless, he has resigned with immediate effect his membership from IRPM and I have accepted that resignation. He will no longer be able to use the MIRPM post-nominals after his name. I have no jurisdiction to take the matter further on behalf of IRPM and hope that the outcome is to your satisfaction. “
LKP would disagree with two comments in Mr Bulmer’s excellent letter.
- It has to be wrong that professional bodies have no power, beyond excluding their members, when there is no obligation to be members of such a body in order to practice in the sector. This is not a critisism of IRPM but a comment on the fact that the government have decided it should be a self-regulating sector. This case makes it entirely clear that it is effectively unregulated as Mr Paine will continue with his business faced by no regulatory oversight.
- Elsewhere in his letter Mr Bulmer advises the complainant that he would “direct you to the excellent Leasehold Advisory Service” (LEASE).
The problem is that LEASE does not have any information warning people about the dangers of doubling ground rent, or accepting onerous lease extension terms such as those introduced by Mr and Mrs Paine. Nor has it done anything to help the leaseholders affected by this problem. Such work has been left to LKP.
It’s interesting to note that Mr Paine and a number of other freeholders are also very keen to direct leaseholders to LEASE for help. Government officials should perhaps wonder whether something is very wrong when people like the Paine’s are confident enough that it will do themselves no harm to point their leaseholders in the direction of LEASE. Circle Residential Management confidently states on their web site:
“LEASE, The Leasehold Advisory Service, is funded by Government to provide free legal advice to leaseholders, landlords, professional advisers, managers and others on the law affecting residential leasehold and commonhold. A useful site for all your leasehold queries.”
Perhaps it is not a surprise that landlords like the Paine’s are supporters of LEASE given that many have been regular users of the LEASE service over the years. Many have also attended the annual LEASE conference and trade show at great expense. This conference makes a large profit for LEASE and helps many landlord’s, managing agents, surveyors and lawyers – both good and bad – but does little to help leaseholders.
How much longer are government officials going to continue to persuade themselves that offering “impartial advice on the law” causes any problem to people like the Paine’s? LEASE’s efforts seem to have ended up helping people like the Paines rather than the leaseholders they are meant to serve.
The wider issue of onerous ground rents was first raised by LKP in a meeting in parliament 8 years ago. The cost to the country of doing nothing about this problem has been enormous. Lenders now estimate that 100,000 homes may now be blighted by onerous ground rents, making them difficult to sell or only saleable at a discount. Taylor Wimpey is the first developer to set aside £130 million to resolve the problems created by its own doubling ground rent leases. Other developers may well face the same problem.
LKP specifically raised the issue of selling leasehold houses with Minister Lewis in 2015. We understand that officials advised the Minister that they did not see it as a problem. They do now – but only becasue we managed to get the matter into the national press.
Instead of patting themselves on the back for the work that LEASE supposedly do officials should perhaps worry that problems like exit fees, collusive tendering and onerous ground rents are left to LKP. It is also left to us to sort out the mess and help the leaseholders. If officials check their records they will see that almost every major problem raised in the sector over the last decade comes out of the work that we do.