The Campaign for the Abolition of Residential Leasehold (CARL) has sent an acerbic letter to the Office of Fair Trading in response to its inquiry into leasehold.
The letter comes from chairman Nigel Wilkins (left), who has headed CARL since 2003, as the OFT seeks to define the “scope” of its inquiry.
CARL has been the one consistent leasehold group to fight against the injustices of leasehold until the arrival of Campaign against retirement leasehold exploitation for retirement leasehold in 2009 and the Leasehold Knowledge Partnership in 2012. It argues – correctly – that leasehold as a form of property tenure should be abolished.
The campaign, which was founded in 1999, has pointed out moral flaws in the sector, such as the taxpayer-funded Leasehold Advisory Service informing freeholders how they can forfeit leases.
The OFT’s inquiry is the third since the investigation into retirement exit and subletting fees reported in July 2012 and Wilkins is understandably getting testy.
“I am interested that you have finally got round to conducting a market study into leasehold management,” begins Wilkins, who is a leaseholder in Kensington, in central London, and is standing as a local councillor.
“A competent regulator would have imposed severe penalties against landlords and managing agents many years ago – at the same time ordering substantial compensation payments to leaseholders.”
LKP / Campaign against retirement leasehold exploitation fully share Wilkins’ frustration, following the OFT’s feeble investigation into Peverel’s price-fixing scam of last December.
In the latter, the OFT complacently allowed Peverel leniency based on the fiction that it had somehow “turned itself in” – as opposed to having been rumbled.
In fact, pensioners had made multiple complaints to the authorities – including the police – in 2009, and the Cirrus scam had even been outlined in the Times on December 4th of that year.
Only afterwards did Peverel decide to come clean.
The OFT then proceeded as slowly as possible, beginning the inquiry in April 2011, and was all set to slip it out without much fanfare – it did not merit any – in the autumn of 2013.
At this point Campaign against retirement leasehold exploitation / LKP established direct contact with the prime minister and a meeting resulted with the chief executive of the OFT and Campaign against retirement leasehold exploitation, supported by the attendance of Sir Peter Bottomley and Ed Davey, the Energy Secretary.
The result was to delay the publication of the Cirrus report and – three days before this unimpressive piece of work appeared in December – the OFT announced a full inquiry into leasehold management.
Needless to say, the OFT will be subjected to the partial and self-interested lobbying barrage of ARMA, ARHM and RICS – all of whom are past masters at obfuscating issues in the sector (while hypocritically parroting the need for “transparency”).
In contrast to which, Nigel Wilkins’ letter is a breath of fresh air:
To the OFT, re leasehold market study
I am interested that you have finally got round to conducting a market study into leasehold management. A competent regulator would have imposed severe penalties against landlords and managing agents many years ago – at the same time ordering substantial compensation payments to leaseholders.
I enclose a file that contains all the newsletters that CARL has published over the past fifteen years. The abuses in the sector have got progressively worse over the years. We have set out clearly what needs to happen to clean up the abuses.
I am very surprised that you even need to ask the questions you have about the scope of your study. The answers to all of these questions have been entirely self-evident for many years, and the fact that you have asked them reflects how out of touch you are with the very serious abuse that leaseholders have had to face.
We have made every effort to make you aware of the issues for many years. I recall your 2009 study into Scottish factors, and encouraging you to look at the more serious problems in property management in the rest of Britain. I received a completely indifferent response.
I also remember visiting you with John Denham MP some five years ago. He was concerned not just about the abuse of leaseholders over repairs etc, but the fact that managing agents forced leaseholders who complained to use premium telephone lines. The more they abused the leaseholders, the more complaints they received, and therefore the more revenues they made. I have to say that the officials we met expressed nothing short of indifference.
You clearly need to extend the scope of your study in other respects. You need to include not just private sector leaseholders, but those who are the victims of so-called charities, as well as public sector local authorities and housing associations. No category of landlord should be excluded. You will also need to include the abuses perpetuated against leaseholders who live in houses, as well as those living in flats. You will also need to assess the benefits of not employing a managing agent – just how those owning freehold homes operate.
Why are freeholders able to forfeit homes worth hundreds of thousands of pounds for amounts alleged to be owing of just a fraction of this? The misuse of threats of forfeiture makes it easier to exploit leaseholders, who find themselves bullied into paying service charge demands they know are fraudulent.
You will also need to review the question of tenure change. The deep conflicts of interest in the sector and the scope for abuse would be reduced by removing the landlord entirely from the scene. There is also the high cost of acquiring the freehold, and the need for a fair price to be set reflecting the relative contributions of the leaseholder and the freeholder, and not one based on the landlord’s monopoly position. The leaseholder pays for everything, while the freeholder not only pays for nothing, but also rakes in a vast profit throughout the entire life of the lease, and then takes everything at the end of the lease.
Hardly any other country in the world has leasehold (preferring much fairer cooperative, condominium, commonhold and strata-title systems). Perhaps you would include in your study an analysis of the way in which our immediate neighbours, Scotland and Ireland, are eradicating the remnants of their leasehold systems, and the fair and reasonable terms on which full ownership is being transferred to the leaseholders.
PS CARL is the only national, democratic organisation that represents the interests of leaseholders. We were established in 1999.
An excellent letter. Truly there are none so blind as those who will not see.
I have to wonder about the postscript however. It would be good if all concerned could join forces and avoid quibbles about legitimacy, priority etc.
Agreed Paul an excellent letter. As for the OFT (Hampshire) I tried to get answers, advice and some understanding from them. Got the idea that they were not prepared to kill the goose that laid golden eggs for some. Lease and ARMA ! ( the devil takes care of its own ) deliberate avoidance with truthful answers.
Well done Sir, we need more people like you and I will give any help I can, Sebastian has my details and you can ask for my email.
Whilst I find that the whole leasehold system out of date and the cause of such great hardship to residents?
I believe that the OFT in asking for the comments as you have said when there has been information in the media for many, many years?
The problem as I see it begins when a flat is to be sold, the owner of the flat will first contact an:-
1. Estate Agent
I purchased my flat in 2006 and was informed by the Estate Agent that The Development had a Managing Agent and we were to pay Service Charges.
My solicitor, gave me no information regarding the problems of leasehold?
Both these professional will not provide the basic information regarding leasehold, as they would not benefit from leaseholders knowing.
The vast majority of those that purchase a leasehold property have no idea of the implications that leasehold holds for the unsuspecting leaseholder.
Worse, Estate Agents/Developers/Solicitors tend to keep quiet about the pitfalls of leasehold.
Even to this day Mcarthy and Stone are running a series of TV adverts in which they state “You own your apartment” This is totally misleading. You merely own the leasehold, which as we now know is a very costly difference.
I have just complained to the advertising standards agency with regard to this advert and they are looking into it. I await further response!!
You show me your response and I will show you mine!
I feel it is wrong that if we sell our McCarthy and Stone apartment we have to pay 1% of the sale into the contingency fund Many have made a large loss on the sale of their apartment and it has taken as long as two years to sell Some residence have had to go into a home or have died but the service charge which include’s a payment to the contingency fund still has to be paid even when they have received no service It is wrong to fleece elderly people and although many people would like to leave they cannot afford to We signed a lease which says parking for residence only but they do nothing to stop other people parking which makes life very difficult and not what we expected
From Simin Eftekhari:
Thank you for this, I am surprised with all the facts on the table, but the abuse of the leaseholders is still happening in our neighbourhood.
“The more they abused the leaseholders, the more complaints they received and therefore the more revenues they made. I have to say that the officials we met expressed nothing short of indifference.” From the article
This is not only about premium telephone lines, is about so-called different agencies which they get drawn , involved and abuse the leaseholders more deep when any complain arises. Our management offers loans, remortgage, legal advice, and even introduce leaseholders to their sell department, etc.
In one example our landlord’s solicitor wrote to me; the longer your complain procedure takes it will be more expensive for you , and interest will be added to the amount owed.
They purposely architect all plans for leaseholders in order to manipulate and abuse them. They try to be upfront of any decision for grabbing their money or their property.
“I am very surprised that you even need to ask the questions you have about the scope of your study. The answers to all of these questions have been entirely self-evident for many years, and the fact that you have asked them reflects how out of touch you are with the very serious abuse that leaseholders have had to face.” From article.
I agree, for last 15 years I have sent my documents to ARMA, RICS, County Court, and LVT. With no positive result. They knew our building is deteriorating and leaseholders are suffering, but nothing was done for us. Our Freeholder did not want to do any work for the building with a reasonable cost. They did not want to be accountable and honest. They were envy of us, and our building enjoying some profit and comfort. Our freeholders and management agencies are the most fraudulent, with zero moral and humane qualities.
In fact they are professional crooks who are involved in an uneven battle with vulnerable leaseholders and the law and politicians are watching their tears and even the blood and doing nothing…..
I think the OFT and all the other ‘self regulating bodies’ all know that we are not going to stand for the corruption and deceit any longer.
There will be change in the leasehold tenure and out the criminal landlords and managing agents one by one…..there will soon be nowhere to hide……..
We should have a ratings page on managing agents and landlords across England so all can see how good bad or indifferent they are at a glance.
Thank you Karen.
This is partly your hard working result ; mostly for our block.
I love your comment. I am looking forward to a justice.
I have been on OFT Website today to get an address to write to concerning the study they are doing on retirement/ leasehold properties It states on their website OFT CLOSES 31/3/14 and its work & responsibilites pass to a number of different bodies Is this how they get away with never sorting anything out
You are right. There will be a change in leasehold tenure in the future. when I don’t know, but it will come. What that will mean for freeholders that have secured loans against future income over 150 years is any bodies guess. I believe the All Agents website does give rankings of managing agents/freeholders.. Can you guess in which position Peverel are in?
Award yourself 10 points if you said LAST!
What about loans on a leasehold flat, and the expense of transferring it to say commonhld, for the flat owner.
Why should that matter at all? .. a debt is a debt…. It has to be repaid whether it is feehold/leasehold or commom hold.
I do not get what it is you are trying to say… please explain in more details so we can have a proper discussion about..
I totally agree with ME and Karen’s comments.
As regarding loans etc, that is a separate issue. Can we please keep this thread “on track” for what it is about and not “nit picking” comments being added in so we go off track.
Trevor Bradley, director of a management company that cares about the people it works for.
Forcing the conversion from leashold to commonhold is, as posted, a burden on a flat owners who not only have to incur costs, but some considerable effort where they have a secured loan mortgage or charge on their flat.. Thats one reason why the current law requires 100% participation to convert.
Where loans exist on premises, the law is never going to be changed to allow the underlying security to vanish and undermine these loans, contrived though they are.
AM, we know it will NOT be easy to implement major changes thar are required to leasehold but the point you raise is “miniscule” compared to why changes need to be made. There are lots of points that will need to be overcome, and lots of sacrifices made to reach the right end result
Yet again the site refuses to accept a post…..
But … it has accepted your post, or at least this one.
Because it will randomly decide to accept a reply, but not a post, or as it did yesterday 3 times, declining a “duplicate post” without posting either originals.
An excellent response from Nigel Wilkins to the OFT. Why on earth do the OFT need to do an investigation of leasehold? Are they the only people who do not know “what is going on”? A total waste of taxpayers’ money and more importantly TIME. Time that for many is running out Mr OFT.
We all know what is wrong, it just needs people such as Sebastian O’Kelly, Martin Boyd, Nigel Wilkins Ed Davey, Sir Peter Bottomley (sorry I know I have missed many off), with their wealth of experience, and examples of so many “scams”, to be allowed to advise what changes need to be done and bring them in to place urgently. There is NO need for an investigation.
Trevor well said,
My neighbour who is the executor for her mother has been sent a bill for The Peverel Purchasers Pack which she has been asked to pay just as the flat has been sold STC.
Why would a seller have to pay £302.00 for a Peverel Purchasers Pack as well as 1% Exit Fees and 1% for The Contingency Fund.
This could be over £2,000.00 to sell a flat (as executor) not including solicitors fees or estate agent fees which could be a further £1,500.00??
Hi folks my friend has been informed that people not over 55 are not allowed to stay as a partner/friend in a retirement flat that has Peverel Retirement as Managing Agents and was an Ex McCarthy & Stone Development?
They are allowed to stay for a short period only and are required to notify the House Manager that they are staying over night as it is a requirement for Fire Regulations.
These regulations do not apply to the House Manager who lives on the development and can be any age and have young children?
Any comments my friends
I would read the lease and see what it says but I think that maybe that rule is there to stop ‘youngsters’ being a nuisance or noisy to the elderly residents.
I would hope that common sense would prevail if anyone wanted an under 55 to stay at their home….. it is their home for goodness sake and they should be allowed to have relatives to stay without having to ask for permission.
If it was anyone that was causing an annoyance to the residents THEN the warden would be able to throw the book at them but not before (my view)..
I see another issue arising from your post concerning your House Manager’s apartment.
Peverel presumably carry out a CRB check before employing a House Manager. This is vitally important as they are in a position of trust living among vulnerable residents.
Are any checks made on those living with a House Manager?
Do Peverel have any safeguards in place to prevent a violent criminal partner of a House Manager moving in?
We had an experience when our House Manager was sacked for gross misconduct. The husband had started to help some of the residents who felt sorry for him as he did not have any cigarette money?
I think you can see were this is going! as he did not work for Peverel Retirement Division no CRB check was required. I later found out that we paid for two CRB checks although our Area manager denied that we had paid £62.00 which would have covered 2 checks as I believe they cost £31.00 each?
The partner ended up threatening residents and was placed on an Police Order and by then the House Manager had been sacked and also placed on a Police Order, but allowed to stay and intimidate the residents from early August.2012 until late October 2012
I asked why they were allowed to stay in a Wardens Flat and why we had to pay their phone calls etc. our Area Manager stated that all information regarding the two people was covered by the Contract of Employment?
We were informed that they had Human Rights on their side and we had no say in the matter as they had a contract of employment and the flat was part of the contract.
We had to put up with the pair for 10 weeks from when the House manager was first suspended and allowed to remain in the Wardens Flat?
The telephone calls made over the period that the couple worked for Peverel Retirement Division was for over £1,400.00 but we only received 90% of the phone bills that we had paid. Our Regional Manager Peter Whalley decided unilaterally that Peverel Retirement Division would not pay any more, as he decided that we had been refunded £1,260.00, and he was not prepared to pay any more?
I believe that Peverel undertook a second CRB check once they had seen the partner on the site and Carol Crowe had sent out a questionnaire which would have been the reason why they were suspended and then sacked.
Peverel Retirement Division have refused to give any information to us regarding the period of the contract that the pair had from 29/11/10 to the 24/10/12 and why they were sacked, we were informed that they were entitled to confidentiality as they have Human Rights???
Issues that I would like to see come out of the OFT investiogation include
-forfeiture no longer available for money claims GR SC etc, but retained for other breaches.
-section 22 rights to inspect invoices extended to include underlying contracts agreement etc
-55% of owners threshold for rights such as a residents assocation but also to invoke mediation on issues, and extend rights to appoint a surveyor or have a management audit if 55% ask
-owners right to ask FTT to determine an alleged breach
-managing agents contracts to become “qualifying works” if more than £100 for any 1 flat
-55% of residents may require landlord to consult on and re tender agents contracts
I think all most of us would like to see as expressed by Nigel Wilkins is the abolition of leasehold!
As a long suffering ripped off Leaseholder for 30years (non retirement property Peverel Group/ OM Property “management”) THE ONLY SOLUTION IS TO ABOLISH THE LEASEHOLD COMPLETELY!
I support Nigel Wilkins 100%.
I was going to write to OFT about their study on retirement leasehold property but it states on their website OFT closes 31 march 2014 and its work and responsibilities pass to a number of different bodies What good is this to leaseholders when we do not know who will take on board our problems