A private block of flats owned by Newcastle City Council is being denied the right to appoint its own management – even though buyers were assured they would have this right in the sales contract.
The pledge could not have been clearer when the 80 leasehold flats at The Cedars, in Riverside Dene, were sold five years ago for between £50,000 and £90,000.
The sales literature states:
“How long has the management of the company looking after the building been appointed for? Five years, after which the residents as a whole can either reappoint or find another management company.”
The building is managed by Mainstay and the residents want them out. But Newcastle City Council is ignoring the previous commitment to the residents saying “we are legally responsible for the procurement of the contract”.
It adds: “there is no right of nomination of alternative contractors under the statutory consultation process where the proposed agreement requires public advertisement within the EU.
“However the council can, and will, invite leaseholders and the RA to give names of any contractors that they would like to see bid for the contract.”
Furious local resident James Dobson said:
“The council have just stuck two fingers up to the local residents and have done all along. They have broken this promise over the management just as they did their pledge not to allow landlords to own the flats.
“The place is atrociously managed and we just want to get rid of the council. But they are fighting this viciously, as though it is personal.
“They treat us like council tenants rather than people who have bought their homes, and even mistakenly address us as tenants in correspondence. We just want them to go.”
A meeting is being held tomorrow evening to discuss the procurement arrangements for new management.
The site will not qualify for right to manage with a local authority landlord, but there may be mileage in asking for a court appointed managing agent under section 24 of the 1987 Act.
The full sales brochure for The Cedars is here
The full council letter is below
How does the contract even fall within the OJEU requirements its only 80 flats??? How much do Newcastle expect these people to be paying as a management fee??.
Has some bright spark in Newcastle decided its the whole service charge which has to be taken in to account or is this somehow how things work nowadays in the bonkers way we manage to interpret EU regulations.
OK, If it is EU law(as i believe it is for a local authority) to offer procurement contracts Europe -wide, perhaps Newcastle City Council will be able to demonstrate to leaseholders the process they used to appoint Mainstay?
Alternatively, what could be the objection to leaseholders advertising in the local paper for a new managing agent, whilst making it clear that it is open to any EU company to apply?
I was under the impression Mainstay had improved their service in recent years, particularly after Sue Petri left to join Peverel/Firstport!