The money was wrongly paid to the freeholder over the past 15 years after flats were sold, rather than transferred to the retirement site’s contingency fund.
Residents spotted the extraordinary error in June last year and contacted Peverel, but it was only NINE months later when LKP took the issue up that the money was repaid.
LKP wrote to Peverel / FirstPort on February 26 – copied into local Labour MP Rosie Cooper, and MP patrons of LKP Jim Fitzpatrick and Sir Peter Bottomley.
On March 6, £39,377 was transferred to the Hillside Court contingency fund.
But the residents claim a further £3,498 is also owed.
Another four property sales in 2002 are missing from the Peverel / FirstPort’s supplied list of property transactions, and two have been incorrectly calculated.
Peverel simply treated the payments as a “transfer fee”, or exit fee, to the freeholder.
These exit fees, for which no service whatsoever is provided, were the subject of an investigation by the Office of Fair Trading in September 2012, which concluded that they were “likely” to be an unfair contract term. They are now under examination by the Law Commission.
Quite why they require yet further legal examination, rather than simply ended, is unclear. The retirement house builders have stopped including transfer fees in about 2009.
LKP’s views them as a blatant example of the worst exploitative practices which have given retirement housing the abysmal reputation it has today.
Although Peverel / FirstPort has paid over the £39,377 last week, it was aware that money was owed months ago.
The accounts for Hillside Court for September last year show an additional payment of £3,880 was paid into the contingency fund in respect of three property sales.
It is unexplained why Peverel / FirstPort did not repay this money when it knew last year that an error had been made, and why it was only paid when LKP took up the issue and involved three MPs.
Last Friday, Peverel / FirstPort wrote to all the residents offering to “unreservedly apologise” – while giving every impression that it had somehow spotted the error and investigated it, rather than having been rumbled by the residents.
Of the £39,377, an amount of £7,520.21 is paid in lost interest that would have been accumulated on the fund.
Peverel / FirstPort blames the “complex” lease at Hillside Court for the error, although the elderly residents seem to have understood it well enough.
“To explain further, the leases at Hillside Court provide for a transfer fee to be paid to the landlord by each flat owner upon sale or letting.
“The lease separately requires the landlord to pay that money into the development’s reserve fund.
“It is this second requirement that is unusual to see within a lease and which was missed 15 years ago …
“Unfortunately, once the error was made, it continued, and only came to light in 2014 … ”
We have asked Peverel / FirstPort to respond publicly to the residents’ inquiries about the money that is still missing.