Just over a week after being contacted by LKP, Peverel / FirstPort has had to pay back £39,377 to Hillside Court, in Ormskirk.
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.
Now hang on a minute!
Whatever my well known views on Peverel/FirstPort are, I have always acknowledged that they have assembled a formidable legal team, including Claire Banwell-Spencer who is regarded highly enough to have a senior role within ARMA. And they are blaming a “complex lease”for the “errors” at Hillside Court? Come off it Peverel!
If Peverel has assembled a formidable legal team is this to see them through the ARMA-Q or to reduce the forthcoming payments that will be heading the Residents way when the Leaseholders start creating Resident Associations to remedy the total failings for Peverel as was. Repaying all the monies cheated in one way or another and this being the Latest Scam to possibly 1500 Developments that are overseen by 50 Area Managers and 5, yes only 5 Regional Managers.
I note that the reply was from our new Regional Manager, Samantha Gibson who refuses to reply to my emails.
The comments below are possible a fair précis of the facts:-
UPDATE March 12 2015: The residents estimate that the underpayment still outstanding now amount to £4,148, not £3,498. The amendment concerns a flat sold in August 2001. LKP strongly advises the residents not to accept that this matter is concluded until all the data is thoroughly examined, ideally by a third party. This money is not a settlement and Peverel has acknowledged that it was wrongly taken from the residents.
Chas says: is this not another offer of a “Good Will Payment”?
It is an example of Peverel suffering because the complex and sneaky revenue generating clauses in the leases of retirement flats has backfired – for once, on them.
Peverel were trained to cheat and use the Lease as it suited them?
Andrew @ Stringer Mallard
The devil is always in the detail. Complex leases are here to stay or so it seems.