McCarthy and Stone has made a “goodwill” payment of £40,000 to Oak Court in Manchester which lacked fire compartmentation in the roof.
But a leaseholder at the site, which featured in BBC TV’s Rip-Off Britain last year, withdrew a submitted article to LKP addressing the issue after receiving a phone call from the company’s senior legal counsel. This call was made within hours of LKP contacting McCarthy and Stone to obtain an explanatory statement for the article.
The company denies that it urged the leaseholder to retract the article.
These matters had been raised in correspondence by LKP and copied to Sir Peter Bottomley and Justin Madders, the MP co-chairs of the All-Party Parliamentary Group on leasehold reform, and Paul Denton, the CEO of Homes England, as well as John Tonkiss, the CEO of McCarthy and Stone.
Oak Court, in Withington, Manchester, was built in 1994 and the freehold belongs to Fairhold Homes, which in turn appoints FirstPort to manage the site – as is widespread in older McCarthy and Stone sites.
The residents themselves became concerned about fire safety at the site, and a report was commissioned in May 2021 which described the risks as “tolerable”.
McCarthy and Stone in November 2022 informed LKP: “For background, and to understand the risk, FirstPort’s FRA [Fire Risk Assessment] for Oak Court in 2021 found the development and the loft areas to be ‘tolerable’, which is the second lowest of the nine fire risk ratings in the FRA. I believe you have the document, and the definition of tolerable in their FRA is: Tolerable (2) Given time, it is extremely unlikely that people could be seriously injured, although minor injury is a possibility.”
A subsequent inspection of the roof found “inadequate standards of compartmentation in the loft space”, which would require considerable expenditure to put right.
The issue appears to be similar to that at Cestrian Court in Chester-le-Street, Co Durham.
In September 2011 a fire at Gibson Court, in Hinchley Wood in Surrey, also built by McCarthy and Stone, burned down and resulted in the death of Irene Cockerton, 87, in September 2011. However, FirstPort pleaded guilty to failures concerning fire policies, procedures and training, and was fined £360,000 in April 2017.
With the leaseholders at Oak Court facing the prospect of an £80,000 bill, they contacted BBC TV’s Rip-Off Britain consumer programme in March 2022, which also included an interview with LKP chair Martin Boyd, who advised raising the issue with McCarthy and Stone’s CEO.
Oak Court also decided to go Right To Manage, employing Pauline Jones, of Jones Associates in Macclesfield, an LKP accredited managing agent who has turned Cheshire into the centre of retirement leasehold self-governance. RTM began in August of this year.
Initially, McCarthy and Stone offered to pay one third of the £80,000, suggesting that the other two thirds might be paid by the freeholder Fairhold and the long-term manager FirstPort.
This proposal did not meet with success.
On 28 March 2023 McCarthy and Stone increased its offer to £40,000, to be paid on completion of the fire stopping work.
McCarthy and Stone has informed LKP:
“[Oak Court] opened in 1994 with building regulation approval and since that date has been managed by FirstPort. FirstPort contacted McCarthy Stone in 2022 (whilst McCarthy Stone and the wider housebuilding industry were negotiating the developer remediation contract with the Department of Levelling Up Housing and Communities) noting that it had found an issue with fire stopping in the loft, which it rated as ‘tolerable’, the second lowest of nine ratings, and therefore presenting no immediate risk.
“We remain unsure why FirstPort did not identify this issue in the 28 years prior to 2022 and while the development was under its 10-year warranty. Given the time that has passed, we also remain unclear whether the issue in the roof space was a result of the original construction, wear and tear or a lack of maintenance. Our surveyor attended the development and was able to identify that fire stopping materials had been used in the original construction.
“Despite the development not qualifying for remediation under the Developer Remediation Contract (which was still under negotiation at the time) out of goodwill to the homeowners, and not because of any liability, McCarthy Stone decided to contribute £40,000 to cover half of the costs to remediate any issues with compartmentalisation in the roof space, and it was our request that the remainder be funded by FirstPort or the freeholder, rather than residents, given the lack of clarity around the maintenance of the scheme.
“We believe this was a fair offer to help the residents.”
LKP also asked “McCarthy Stone”, as it now prefers to term itself, to clarify to what degree it is distinct from the old McCarthy and Stone that built the bulk of the retirement sites before 2008, including Oak Court.
The company spokesman explained:
“McCarthy Stone was established as a new business in 2009 following the global economic recession in 2008, which saw the old business of McCarthy & Stone enter administration. The new business has since opened 530 retirement communities across the UK and we remain as the landlord and managing agent for all of these schemes. This means we hold full operational accountability for these developments, and today we support more than 23,500 people mostly aged in their 80s. This includes 122 housing with care schemes where we deliver a range of care, support and property lifestyle services, including providing nearly 1 million meals a year and 500,000 hours of care and support a year.”
What this means is that while McCarthy Stone benefits from association with an established trade name, it may argue that it has no liability for sites built by its previous owners.
LKP comment
It is regrettable that a leaseholder at Oak Court had provided an article for publication with LKP – essentially a diary – subsequently to withdraw it following a telephone call from McCarthy Stone’s lawyer. This call was made within hours of LKP raising the issue with the company in order to provide a statement.
This statement was necessary as McCarthy Stone, as it now terms itself, needed to point out that it was “unclear whether the issue in the roof space was a result of the original construction, wear and tear or a lack of maintenance” and that its surveyor “was able to identify that fire stopping materials had been used in the original construction”.
No explanation has been offered why the lawyer decided to contact the leaseholder within hours of LKP raising the issue.
The episode was particularly regrettable because McCarthy Stone is the only entity involved in Oak Court that felt any sense of responsibility for the fire safety failings, and did pay out £40,000. The leaseholders say neither FirstPort nor Fairhold have paid anything at all, even though they have been responsible for this site for years.
So a rather positive narrative for McCarthy Stone became a tainted one, quite unnecessarily.
Below are the resale values on the Land Registry for Oak Court:
Flat 1, Oak Court, 1 Mauldeth Road, Manchester, M20 4NE
Transaction history
A 2016-12-02 £45,000
A 2002-03-14 £49,000
A 1996-01-26 £53,500
Flat 10, Oak Court
A 2013-11-08 £60,000
Flat 11, Oak Court
A 2018-09-21 £60,000
A 2017-05-26 £57,500
A 2012-06-01 £54,000
Flat 12, Oak Court
A 1997-02-28 £61,500
Flat 14, Oak Court
A 2019-07-11 £63,950
Flat 15, Oak Court
A 2016-05-31 £58,500
A 1995-01-30 £49,000
Flat 16, Oak Court
A 2018-03-02 £75,000
A 2004-06-21 £92,500
Flat 17, Oak Court
A 2018-08-20 £47,000
A 1995-05-26 £49,500
Flat 18, Oak Court
A 2015-08-13 £50,000
A 2010-06-28 £77,950
A 1999-10-22 £45,000
Flat 19, Oak Court
A 2020-11-03 £58,000
A 1997-01-24 £49,950
Flat 2, Oak Court
A 2016-11-07 £59,000
Flat 20, Oak Court
A 2014-03-28 £48,000
A 2007-03-16 £87,000
Flat 21, Oak Court
A 1997-02-21 £57,950
Flat 22, Oak Court
A 2016-10-07 £72,000
A 2010-03-30 £99,950
A 2000-04-12 £60,000
Flat 23, Oak Court
A 2001-05-09 £45,000
Flat 24, Oak Court
A 1998-04-24 £59,000
Flat 25, Oak Court
A 2017-09-08 £65,000
A 2014-04-25 £65,000
Flat 26, Oak Court
A 2003-07-29 £68,000
Flat 27, Oak Court
A 2010-10-29 £70,000
Flat 28, Oak Court
A 2018-05-30 £58,950
A 2003-08-06 £68,000
A 2002-04-11 £43,500
Flat 29, Oak Court
A 2009-06-15 £88,000
A 1995-01-16 £57,500
Flat 3, Oak Court
A 2022-11-28 £60,000
A 2018-07-12 £68,000
A 1996-11-15 £42,000
Flat 30, Oak Court
A 2004-05-05 £92,500
A 1995-04-28 £49,500
Flat 31, Oak Court
A 2023-08-01 £58,000
A 2017-04-18 £53,000
A 1995-02-24 £56,500
Flat 33, Oak Court
B 2016-03-15 £38,000
B 2015-11-30 £23,500
A 2006-02-24 £83,000
Flat 34, Oak Court
A 2019-12-20 £78,500
A 2017-09-22 £69,950
A 1996-12-20 £50,950
Flat 35, Oak Court
A 2016-12-07 £63,000
A 2004-09-01 £110,000
A 1998-03-24 £52,700
Flat 36, Oak Court
A 2019-09-16 £54,500
A 1999-03-05 £40,000
Flat 37, Oak Court
A 2017-03-27 £75,000
A 2011-12-02 £80,000
Flat 38, Oak Court
A 2018-09-21 £67,500
A 2002-04-19 £73,000
A 2000-12-13 £71,000
Flat 39, Oak Court
A 2021-09-01 £51,000
A 2004-04-22 £89,950
Flat 4, Oak Court
A 2016-04-22 £56,000
A 2010-03-26 £45,000
Flat 5, Oak Court
A 2012-08-03 £59,950
Flat 6, Oak Court
A 2012-07-02 £66,000
A 2004-05-21 £120,000
Flat 7, Oak Court
A 2001-09-28 £41,000
Flat 8, Oak Court
A 2001-03-29 £60,000
A 1995-03-24 £69,000
Flat 9, Oak Court
A 2020-02-17 £69,000
A 2014-12-17 £55,000
A 2000-06-23 £41,000
11, Oak Court
A 1999-11-05 £45,000
Related posts:
Pensioners in retirement housing face £150,000 fire safety bill, but McCarthy and Stone isn’t reponsible (nor is FirstPort, and NHBC hasn’t responded)
McCarthy and Stone: Ground rents are not the future of retirement housing
Our ground rents are fair, says McCarthy and Stone (even though they go up to £600 and are for no service whatsoever)
LKP saves family £25,000 over shared equity McCarthy and Stone lease
McCarthy and Stone says ground rents essential, but why sell freeholds to murky Adriatic Land?
Freeholders face £27.3bn fall in asset values if ground rents reduced to peppercorn, says government
I would be interested to read any analysis of ground rent and service charge costs, versus a property’s actual sales value? I suspect that the higher the ground rent and service charge costs will result in a lower property value. I believe that the present “racket” has achieved property’s coming onto the market with either no value or only a small fraction of the original purchase price.
None of the above will affect the builder, freeholder or managing agent. They will still maintain their income streams.
Correct Stephen.
Similar happened at Laurel Court, Folkestone. Same story and economics involved.
Whole block has lost something like £1.8mn on resale value. One flat, bought for £161,5000 sold for £30,000 100 years later. FH rinsing the block on onerous scams for light bulbs and fire alarms etc etc.
As article explains, many other sites have suffered the same fate. A scandal.
Vinny
I agree a complete and utter scandal. I recall over the Years that quite a few Leaseholders had to sell their Leasehold homes because they could not afford the service charge and ground rent, this all occurred before we went RTM.
Those former Leaseholders experienced what I call “Service Charge Poverty” Caused by Year after Year of service charge increases that out stripped any measure of inflation. In many ways those punitive increases actually drove many Residents towards forming a RTM. Following the completion of RTM around a quarter of the Leaseholders told me had we not gone RTM they would of had to sell up because they were experiencing financial difficulty.
I remember when a Neighbour sadly passed away but gave instruction in their will that the property had to be sold and the proceeds passed to the deceased children. Unfortunately, the property did not sell for several Years in all likely hood because of the service charge and ground rent costs. The beneficiary’s made the difficult decision to let out the property and that is the case at the time of writing. The service charge and ground rent costs incurred by the beneficiary’s almost caused one of them to become insolvent.
Sadly, I believe that this is widespread throughout the Leasehold sector but is not widely reported due the sensitivity of the subject. Even in Death the beneficiary’s of a Leasehold property are haunted by the spectre of service charge and ground payments for what may feel like an eternity.
The above response by “McCarthy & Stone” appears to me to be a damage limitation exercise. They have generously agreed to cough up £ 40,000 as a “goodwill ” payment whilst simultaneously wondering why their “specially selected” property managing agent did not identify and report this issue to them, during the 28 Years of their property management responsibility for Oak Court prior to 2022?
I am not surprised in the least that the it was the Residents of Oak Court that raised their concerns about the safety of their home.
What was the explanation given by the Freeholder or managing agent for not contributing a penny towards the remediation cost of Oak Court? I would be fascinated to read their offering.
Have the LKP any idea why the Resident of Oak Court decided to with draw their consent for publication of their diary contents on LKP ? Is it at all possible that a £40,000 goodwill gesture may have had some thing to do with it or is that just wild speculation on my part?
I can only comment that Irene Cockerton who dies in a fore without adequate fire division in the roof.
http://www.spanglefish.com/aboutpeverel/index.asp