Sajid Javid’s speech came with a lot of schmoozing but was a devastating critique of modern property management by someone who has at last understood these issues
You can respond to Mr Javid’s ‘Call for evidence’ of leasehold property management here:
Protecting consumers in the letting and managing agent market: call for evidence – GOV.UK
This call for evidence seeks views on the regulation of letting and managing agents and the approaches government could take to implement any such regulation.
By Sebastian O’Kelly
The speech by Sajid Javid, the Communities Secretary, this morning to the ARMA conference came prefaced with such a soothing dose of syrup that for a while I feared being revisited by my breakfast.
“I know you’re not the Rachman-esque ogres that some on the internet claim [Oh, dear. Is that us?]. I look around this room today and I see the good guys.”
It can be read in full here, although almost all is below.
ARMA members, the good guys? Well, there are indeed good guys in ARMA, and we are positive about the organisation.
But ALL good guys? Including, say, Y and Y Management, where every single retirement site it took over in the South West broke out into open rebellion and epic right to manage battles?
Or, indeed, our old friends Peverel / FirstPort? Are they unambiguously good guys, no longer owned by but still serving the Tchenguiz interests, ultimately based in the British Virgin islands? It is a company that systematically cheated pensioners in 65 retirement sites, according to a protracted, tokenistic, feeble Office of Fair Trading investigation where no one was punished but where there was a ruling – better repeat that, where there was a RULING – of collusive tendering to favour its subsidiary Cirrus.
Peverel cheated pensioners in £1.4 million tenders at 65 sites, says OFT – Better Retirement Housing
now ALL sites should exercise right to manage and be rid of them … ‘the system is rotten’ to have allowed Peverel / Cirrus to get off, says Bottomley UPDATE: Guardian reports OFT / Peverel / Cirrus scandal UPDATE: BBC reports Peverel / Cirrus price-fixing scandal The Peverel / Cirrus price-fixing scandal was finally confirmed by the Office of Fair Trading today, which found that retirement leaseholders had been cheated in tenders worth £1.4 million.
“You’re members of ARMA because you subscribe to their code of conduct,” said Mr Javid.
Er … actually, Minister, ARMA’s self-regulation is in disarray after former regulator and ex-Labour minister Sally Keeble resigned and announced that professional self-regulation had failed.
Along with a £160,000 hole in the accounts – a disgruntled member had up before the disciplinary process took legal action against the trade body: there was no court case but massive costs – has cured ARMA of any further enthusiasm for self-regulation.
The regulator role is terminated and complaints now head off to the anonymous, mimsy Property Ombudsman.
ARMA regulator Sally Keeble outlines five areas where statutory regulation is needed in leasehold
There are certainly “good guys” and honest professionals in ARMA – many also members of LKP, in fact. But the truth is that it is back to its core function as a trade body.
But after this wobbly beginning, Mr Javid slammed his foot on the accelerator and the speech surged forward.
“Sadly, though, you can’t have good guys without bad guys.
“And, there’s no avoiding the fact that too many people in your industry are simply not good enough …
“As we build the houses this country needs, we’re also seeing many new housing estates with shared public spaces that need taking care of.
“That has led to a growth in the demand for property management services.
“And as the sector has grown so has the file of horror stories.”
All too true, and mentioned in the Commons later by Lucy Allan, Conservative MP for Telford, who named the Lawley Village private estate for its egregious charges.
“Some rogue agents over-charge for their services, adding a huge personal take for themselves or passing contracts to friends and subsidiaries.
“I heard of one situation where an agent had charged a commission of more than 30% when arranging an insurance policy, 3 times the recommended limit.”
Actually, our old friend Vincent Tchenguiz worked on 43% and higher rake-offs are also routine.
“In another case, leaseholders were charged 10 times the market rate to have a new fire escape fitted – with the £30,000 contract being handed to the freeholder’s brother.
“One landlord was billed £500 by his agent for repairing a shower door.
“Others boost their income by cutting costs, charging for a 5-star service while providing a budget version.
“Repairs are skipped, jobs are botched, as little as possible is done …
“Then there are the agents who “can’t do enough” for their tenants.”
At this point, I feared we were back to the schmoozing, but … what’s this?
“In fact they deliberately do too much, over-managing the property in order to rack up as many charges as possible and take the largest possible commission.
“With up to a fifth of managing agents getting paid based on a fixed percentage of the fees they charge tenants, it’s not surprising that some choose this option.
“The impact on the public is enormous.
“Some industry experts claim that, every year, British households are overcharged by as much as £1.4 billion.
“That means that, since I started talking to you this morning, rogue agents have pocketed around £15,000 in unjustified service charges.
“By the time I leave the stage, that figure will have reached nearly £40,000.
“The figures are so large because property management is a massive industry.
“Around £3.5 billion of service charges are collected each year.
“Yet despite its size and importance, it is almost completely unregulated.
“Literally anyone can put on a suit, order some business cards, and call themselves a managing agent.”
Sir Peter Bottomley obliging named a trio of game-players later in the Commons.
“You don’t have to any qualifications or experience, or a criminal records check.
“You don’t even have to know what a managing agent does.
“That will come as a huge shock to many outside this room.

“People assume they’re paying their service charges to a skilled, experienced professional.
“In fact, they could be handing their hard-earned cash to the sort of self-regarding spiv who doesn’t even make it past the first challenge on The Apprentice.
“In a multi-billion pound industry that’s crucial to the safety and wellbeing of millions of people, that is simply not acceptable.
“Nor is it the only problem.
“If people decide they’re being over-charged or under-served, it can be almost impossible for them to do anything about it.
“And that’s because the system is stacked against them and in favour of rogue agents.”
Mr Javid then turned to right to manage.
“Right to Manage is a great idea.
“It can and does work well.
“But the process behind it is far too complicated and too easy for unscrupulous landlords to abuse.
“In one recent case, claiming their right to manage took a group of pensioners 3 attempts, 6 years, and a trip to the Court of Appeal.”
This is a reference to the retirement site Elim Court, where the manager was Y and Y Management, run by Joseph Gurvits for his business partner Israel Moskovitz. Both have been named in the Commons.
Elim Court: If you want right to manage, this is how NOT to go about it – Better Retirement Housing
Please follow and like us:Elim Court in Plymouth has escaped from its right to manage debacle by the skin of its teeth, having been led to near ruin by right to manage facilitators. After having had its right to manage application turned down in the lower tribunal (freeholder’s costs: £10,000) and then thrown out by …
“Leaseholders risk losing their homes if they fall behind on paying even a tiny amount of service charges.
“Freeholders on new-build estates increasingly have to pay service charges for the upkeep of common areas.
“But they have absolutely no say over who provides services and at what cost, and no way of taking over management themselves.
“This is supposed to be the age of the empowered consumer, of unprecedented choice.
“If you don’t like your gas supplier, your phone company, your bank, then you can quickly and easily switch to another provider.
“Parents have a say in where their children go to school, patients have a choice about which hospital they get treated at.
“But in the world of property management, we’re still living in the past.
“In an age when ordinary working people are expected to put up and shut up.
“The result is a market in which the people who pay for and receive services have absolutely no say over who provides them.
“A market that simply does not work for the people it is supposed to serve.
“That can’t be allowed to continue.
“And I won’t allow it to continue.”
At this point, this speech was getting very good indeed. It augers well for Mr Javid’s review of the leasehold houses and onerous ground rent scandals which has left 100,000 with unsellable homes.
“When our housing white paper was published, most of the attention and the headlines covered the vital task of building more homes.
“But it also talked about the need for urgent action to help people already on the property ladder or living in rented accommodation.
“I’ve already announced plans to regulate letting agents, including banning fees for tenants.
“I’ve also made clear that I want to see an end to unjustified use of leasehold in new-build houses.
“And today, I’m setting out plans for fixing the problems in property management.
“I’m publishing a call for evidence, a document that talks about the challenges facing the sector, suggests some possible solutions, and asks for the views of the people who know the market best, whether that’s people who work in it or the people who pay the service charges.
“Should leasehold tenants have a greater say over appointment of managing agents?”
Yes, of course they should. Hopefully this is simply a rhetorical question.
“How can we increase transparency in the system and give the people who pay service charges more access to accounts and decisions?
“What’s the best way to ensure fairness and openness around relations between freeholders and agents, and between agents and their subcontractors?
“How can we make it easier to challenge services charges or to change managing agent?
“And what about the current model of voluntary self-regulation?
“ARMA-Q has done a lot to raise standards, but has the system had its day?”
Er … ARMA-Q is a bit of a dead duck, after the regulator walked off in a huff – an issue ARMA tried to disguise as though the conference were some sort of Politburo congress from Soviet times.
“Many say we need an entirely independent regulator to oversee property management – is that the best way forward?
“This paper, which you’ll be able to read and respond to on our website, is the first step in creating a property management system that works for everybody.
“And that includes the property managers themselves.
“I say that because I’m a businessman at heart.
“I don’t like unnecessary red tape.
“I hate to see good companies and forward-thinking entrepreneurs struggling under the weight of burdensome regulation.
“I’m proud to be part of a government that has removed and continues to remove all manner of pointless, petty restrictions.
“But I also know that, sometimes, a completely unregulated market can turn into a kind of free-for-all wild west.
“And, as everyone knows, one thing the wild west doesn’t lack is cowboys.
Ministers to outlaw rogue freeholders
Millions of people who own leasehold property are to be protected against high service charges in a crackdown on the £3.5 billion management industry. Under proposals to be published today, property managers could be regulated and the owners of freeholds would lose the right to unilaterally appoint companies to manage properties, mostly blocks of flats, on their behalf.
“I’ve already talked about cowboy property managers are bad news for consumers.
“But, as ARMA has long recognised, they’re also bad news for hardworking, honest members of the profession like you.
“That’s because the current system effectively penalises the good guys.
“The ARMA members.
“The agents who sign up to standards, invest in their staff and provide the quality service that people deserve.
“You’re the responsible ones, but you’re not competing on a level playing field.
“You invest in training, the cowboys make it up as they go along.
“You put time and money into maintaining standards, some of your competitors cut corners in order to line their pockets.
“Your priority is delivering a quality service, theirs is making a quick buck.
“You can’t blame amateur or accidental landlords for picking the cheapest option when appointing an agent.
“Many don’t know any better.
“But a race to the bottom will always be won by agents who don’t care about standards and safety.
“That’s not fair on the people paying for services, and it’s not fair on you.
“It can also do untold damage to the sector’s reputation, making it easier for populist politicians to tar you all with the same brush.
“Appropriate regulation, properly designed, will force rogue agents to either raise their game or quit the business.”
Good.
“That’s good news for tenants and it’s good news for responsible, professional agents like yourselves.
“It’s popular, in some corners of politics, to point the finger at everyone involved in the housing market.
“To say that you’re all just in it for yourselves, “Sheriff Fatman” capitalists taking advantage of desperate people and so on.
“I don’t believe that for a minute.
“The private rented sector and justified use of leasehold deliver millions of homes for millions of hardworking people.
“And the people in this room today do a vital job of servicing and maintaining those homes and protecting the people who live in them.
“Thank you for that.
“As we build more homes we’re going to need more people like you to help take care of them.
“That’s why it has never been more important for all of us – government and industry – to work together to celebrate what works in your sector and to fix what doesn’t.
“I want you to join me as this government cleans up the property management industry, evicts the cowboys who harm consumers and give you a bad name, and delivers better value and better services for tenants, for leaseholders and for hardworking people right across the country.”
Well, it was a good speech and many congratulations to Mr Javid.
He showed awareness of the issues in the leasehold sector – stuff the likes of ARMA have been quiet about for years – he was ringing out the right noises.
Dealing with the property managers, and making right to manage easier and more effective are the easier bits of leasehold.
We will see soon what Sajid Javid intends to do about the leasehold houses and onerous ground rents scandal.
In that field, the smooth lobbying from the housebuilders and ground rent investors will be on a different level to anything encountered in the modestly remunerated profession of property management.
The clichés de jour coming from the housebuilders and investors is: beware “unintended consequences”.
Touch leasehold and you will cramp housebuilding and unbox a host of intractable legal problems.
Let’s hope Sajid Javid’s business sense lets him spot a self-interested play when he sees it. But the play will have been good.
It’s all about the bottom line. Let’s see what Javid comes up with. A promise is a comfort to a fool folks. I can/ will provide to the DCLG with clear evidence of shocking wrong doing by a paticular Managing Agent Co which shou,d in fact be being investigated by the Police for fraud -(evidence provided m’lud)
Sajid Javid is living in LA.LA Land if he truly believes tnese SHYSTERS are in the minority.WAKE UP YOU FOOL!
Precisely, it is all about the bottom line. Kim, was your acrophobic story a reference to my pointing out to Katie her error with “untangeable”?
Yeah it was David.Slap,on back of knees from Kim..Hmmmmmm..
Fair, and suitable, comment. I deserve to be chastised.
Very gracious. Thank you!
I have grave misgivings.
Yes, it easy to be cynical and pessimistic, I know, but it is also hard to be realistic when you want to hope for change.
You just have to read all the law reports since the 1960s, the draft legislation put forward and ignored, the breathy statements of intent by previous governments recorded in Hansard about bad managing agents, blah blah, right up to the recent housing bill, and yet still we are where we are.
Even if Sajid Javid means to act, there is no guarantee he will carry Parliament in both places, and history suggests he will not. (Tonight the government slung off en masse to avoid a non binding vote -what a bunch of ‘democrats’ our politicians are, eh?)
Those against any reform will not shout their self interest or reveal their bias, they will simply and quietly push through their wrecking clauses.
I saw a tweet today that most managing agents were against improving access to leaseholders to dispute their service charges?
There’s the mountain. No surprise.
Said it before and will again: I have lived under six managing agents, none of them on face value backstreet cowboys and all, as far as I could see, ARMA members, and some even RICs members. Not one of them was what I would call reputable, let alone competent. You can read daily of many others on forums.
These managing agents really are dire at management, ARMA or not. There is even one agent accredited here that we had to part company with as an RTM company. I won’t name them as what is the point. At least they are no longer our problem. I merely make the point nowhere (in leasehold management) is guaranteed.
A new independent regulator holds out no promises given the performance of most industry regulators.
Besides, unless I have missed something, it is freeholders who appoint these agents and instruct them. Unless their instruction is illegal, the agent must comply with the wishes of the principal party to the contract.
What is the government’s plans to regulate individual or investment freeholders? Which schemes must they join? Which training must they pass?
It is all nonsensical taken in the round, no? Anything that stops short of putting leaseholders in full control is doomed to be mere window dressing.
Even getting control is no safeguard at present. The only clients that agents habitually ignore are leaseholder-run companies, which they seem to treat as pretend companies? Perhaps not unreasonably given the dire standard of management within many RMCs and RTMCs.
RMCs and RTMCs can have has much hassle as estates without any control. In six years our RTM has yet to receive accurate accounts and it has the benefit of me, someone who could do the blessed accounts for free, but of course is not permitted. I can merely complain each year that the figures do not reflect the cashbook records. And the carry forward adjustments have not been brought forward accuarately, etc. At least I can see the cashbook records. We had to sack a RICS/ARMA agent get this basic right.
No regulator could cope with the endemic cynicism managing agents show to leaseholder run companies while claiming to be their ‘friend’. And many leaseholders have no chance of self-management.
Some reforms would be simple enough…
Why not have Statutory Tenants Associations unlike the farcical “Recognised” variety? (We got one of those and it was a waste of time).
The STA would not need to go to court for a right (always with the court applications!). The STA would have the legal right to control the trust bank account.
Leaseholders would automatically be entitled to form an STA irrespective of whether they they could exercise RTM or buy their freehold.
Even if they had to have a external landlord, their STA could have control over the trust bank account. Simply then a matter of bank mandates for any agent.
A model constitution would be a simple thing.
The STA’s elected officers would appoint and mandate an agent to access the trust funds under strict leaseholder control, but the bank account would remain in the estate’s name and under STA control (remember that the 2002 Act had a clause requiring individual bank accounts but in 2010 the new government dumped these clauses).
Mr Joiner et al would have no cause for concern, as they would have no legal control over the trust account, merely mandated access to use it until or if sacked.
Even RTMCs and RMCs cannot at present maintain their own bank account if they use one of these ‘professional’ agents. Beggers understanding? It is not a probelm with the banks. All the bank wants is evidence of a lawful entity, elcted officers and signature mandates etc.
No need for tribunals or judges or having to open a new trust account each time an agent is sacked. That is a joke.
Insist ALL registered agents use an online transparent accounting system with password access to leaseholders. Full control by officers of the STA etc. We are in the digital age. Even the government uses online inforamtion systems.
This is just two of numerous practical reforms that do not need endless consultations.
The real problem is the mindset of English landlord and tenant law. ‘Tenants’ are children who cannot be trusted even if they are the only ones paying all the bills.
And of course the multi-billion industry must and will be defended to the death.
I think it pays to remain deeply suspicious. Not pessimistic, realistic?
I remain optimistic.
It’s what gets me through this dark tunnel.
I always have been a glass half full kind of girl
“What is the government’s plans to regulate individual or investment freeholders? Which schemes must they join? Which training must they pass?
It is all nonsensical taken in the round, no? Anything that stops short of putting leaseholders in full control is doomed to be mere window dressing.”
I am afraid that I have agree with you. As someone who has seen some of the worst abuses in the system, I find the speech as mere attempt to appease. The freeholder appoints the agent – the policy that follows is dictated by the freeholder and is always about “monetising” your home. There is no incentive for freeholders or agents to run the building well and no meaningful penalties if they don’t. Very simple and I am sure everyone who wants to understands that.
Fleecehold reform I see your point however, it is Imperative that Agents are Strictly Regulated so that even if the Spiv Freeholder requests Its puppet agent to commit fraud etc there will be serious penalties for the Agent.
As I have already stated at length in a previous post. I have shared Freehold – Naive Directors and a very questionable Managing Agent who I hope will be paraded as an example of how NOT to manage.
Commonhold is not a cure all if the Agents are unregulated and folks running the commonhold company are eeejits!
I think we should all complete the consultation posted by Paddy re ‘ Managing Agent Regulation’
…and I also agree on the RTA. Recognised Tenants Association ! I put a lot of effort and time to organise but the agents carried on ignoring our meagre ‘rights’. The judge at the Tribuna just joined the agent in ignoring the ‘tenant’ owner occupier. What a farce!
We need meaningful penalties and enforcement not grand speeches.
Mr Sajid Javid please do not mislead the people any longer. It is criminal to allow this.
A very good Idea, Paddy And of course an independent bank account would guard against larger firms pooling service charge payments and allocating them to specific development accounts such as happens with Firstport. With so many developments that have the name “Pegasus” in their title, mistakes are all too easy to make..
Yeah honey me too, but alas am also old enough to be ‘ Realistic”. We are however going in the right direction and victory will be ours! We must believe in our cause and ourselves to achieve our goal.
YES WE CAN.
I fully understand the opening fawning remarks made by Sajid Javid. What else could he say at the ARMA conference before laying into all the failings of the property management sector in a most comprehensive and very welcome way?
That said, whilst I believe Mr Javid is very sincere in this matter, I doubt his political masters will allow him to make the progress we all desire. It would come as no surprise if Mr Javid was moved from his department. Westminster gossip linking his closeness to David Cameron and George Osbourne when they were seeking to put pressure on Transport For London over a licensing issue suggests his days may be numbered. Whilst I make no accusation against Mr Javid, it may provide the political elite with the excuse they need to move him out of his department, and thus further frustrate any change.
Well according to the ARMA website the Conference does not start for another 12 hours, so I wonder which Conference Sajid attended.
He obviously thought it was the ARMA one as he was full of praise for all their members.
Those of us with up to 7 years experience of leasehold know very well that this is not always the case and I think ARMA have known that too, but not admitted it.
We had high hopes for ARMA Q but it proved a big disappointment.
How much better it would have been had Sally Keeble’s advice been taken and she had remained there. It would have been a big step forward.
Having said all that, today a Housing Minister has given us more hope than all the previous ones put together.
So we must congratulate ARMA for arranging this conference, no doubt as usual they and their members will be congratulating themselves from the rooftops.
When will it all end?
Mr Javid was ARMA s guest in this swankish hotel; It would have been inappropriate to upset his hosts. But there are serious issues within property management, and perhaps he should have declined the invitation. An empty minister s chair speaks louder than words.
But we would have figured out by now that we have a weak government, a weak parliament, weak regulators /watchdogs. weak against lobbies and money interests.
No Mr Javid, “right to manage” is nothing to be cheerful about. It is a cynical as having a regulation for applying fo the “right to breathe”. Right to manage should not be fought for if it is a right. Commonhold= common sense
Rather than meet in swankish hotels. Mr Javid should spend a couple of nights in the average London, HMO to get a taste of where we are… something managed by the ‘good guys’ . Are you up for it Mr Javid? And perhaps you could live in my old flat to see how it feels to have cockroaches managing your house and making insane decisions such as installing video entry system, (on a contract of course!) when nothing is done when the roof leaks like a power shower…..
Please -do get in touch I have information that could surprise even the most cynical among you.
Dear ARMA,,
If by some chance I have a complaint over electricity charges levied by one of your members that cannot be resolved and I make a formal complaint to ARMA, how could my complaint be independently investigated, if the member has used ARMA Energy and Full Power Utilities?
Dear ARMA,
I hope the conference went well.
Sorry we were unable to attend, and thank you for all the money you paid in compensation to us after our” issues” Shame we can’t say exactly how much you paid us (not entirely your fault as we agreed to keep the amount secret as part of the settlement)
Kindest Regards,from all of us at Countrywide.(who used to be one of your largest members and biggest paymasters before leaving ARMA)
“The private rented sector and justified use of leasehold deliver millions of homes for millions of hardworking people.” – The good news is, Sajid Javid intends to put an end to the sale of houses on a leasehold basis, accept in the few situations where it is unavoidable. When exactly is leasehold justified, as opposed to unavoidable? Apartment blocks, converted houses? Leasehold might be unavoidable in a few situations, it is never, ever, justified when commonhold exists.
“Let’s hope Sajid Javid’s business sense lets him spot a self-interested play when he sees it” – Leasehold’s continuing existence has been due to the inaction of governments, and the enabling by governments over the years. It is not a lack of business sense, nor awareness, that has allowed things to get where we are now, successive governments have been complicit in the great crimes attached to leasehold. Sebastian is being far too generous in suggesting if right actions do not follow, then it will be down to Sajid Javid being hoodwinked.
I love this word “entrepreneur” by the way. I first became attached to it when President G W Bush, engaged in troubles with the French government, said “The problem with the French is they have no word for entrepreneur”. Then over time I realised that the word had escaped its original meaning – one with enterprise and energy who sets up a business – and had become a useful word to use (avoiding legal offence) to describe individuals whose activities were more deserving of the pejorative. Entrepreneurs we all know and love – Philip Green, Mike Ashley, Jeff Bezos, the late Steve Job, and of course dear Roger Southam.
Words are damn tricky creatures, you think you know them, then you don’t. “Principles (and ethics and integrity)?, I got principles, if you don’t like them, I can change them.” (Groucho Marx).
I believe Groucho said “… if you don’t like them I have others.”
I am not deceived by Mr Javid. It was a speech for public consumption. At this point I begin to consider Peter Bottomley to be effectively a useful idiot, which is not to doubt his integrity or sincerity in any way. But his naming names of cowboys and crooks, deserved as it may be, feeds the few bad eggs narrative which, given the scale of problem, is a distraction from the underlying rottenness of leasehold and the property management business generally.
Paul, as Kim said “It is about the bottom line”. Fine speeches and robust rhetoric change nothing, the bottom line is legislation, and the extent of the legislation.. Peter Bottomley? I will give him the benefit of the doubt, very probably sincere but ……
At the tail end of my working life vogue words came into being from remote management specialists who specialised in motivation, one of these words was “empowerment” – empower your workforce (oops colleagues) to get the best out of them. Swore I would never, ever, use the word, it – and other management speak words – so offended me. But I can find no more suitable word now with regards to leasehold, government needs to legislate to empower home owners(?), and that means abolition of leasehold with retrospective element. nothing else would be satisfactory.. ,
Totally agree! Legislation not just regulation and meaningless ‘rights’ . I have no experience with ARMA agents, but since being a member it’s optional – it’s entirely meaningless. It’s like as if you can practice law, or medicine, but being lawyer or a doctor is ‘optional’ – recommended but…
Our agents were never ARMA, in fact they were barely literate, just appointed by solicitors so there was no accountability.
Leaseholders have been duped for far too long… and tribunals have been collaborators in this fiasco. Of turning leaseholders into lambs for the slaughter.
I am all for regulating managing agents, published audited accounts should be non negotiable. Leasehold, fleecehold or commonhold buildings need competent management.
I see the LKP article makes mention of Peverel/Firstport.
Is this the Peverel/Firstport who have increased the total amount of funds held in development service charge trust reserve funds despite having fewer developments under their management?
Is this the Peverel/Firstport who the last time development service charge reserve funds rose by this amount was the precursor to the price fixing fraud?
Is this the Peverel/Firstport whose parent company (Knight Square) has a negative value of £-35,000,000?
Fleecehold Reform: I missed your comment elsewhere on LKP asking were “informal” lease extensions criminal.
Each individual leaseholder is entitled to a 90 year statutory extension with ground rent reducing to zero.. When a freeholder aggressively pushes an “informal” extension offer linking a proposed new ground rent (up from peppercorn to hundreds per annum) and linked to RPI and then falsely asserts to the property tribunal that the tenant requested the new terms (which seems to make the scam legal) , I will leave it to others to explain what is or is not criminal in this instance.
When the premises were purchased in the first place in criminal breach of RFR, then I regard any arrangement other than forced resale on like terms to the original disposal as provided by part 1 of the LTA 1987 (as amended by Housing Act 1996) as criminal.
I am encouraged by the present Housing Minister and believe that, albeit in the background, the influence of Gavin Barwell continues. Paul is being less than kind to Sir Peter Bottomley, who along with Jim Fitzpatrick and Justin Madders (and the new found clout of the 1`17 strong APPG) has done Trojan work on behalf of Sebastian and Martin and all at LKP The sheer time and effort spent by all so engaged can never be underestimated.
Reform is long overdue, and must include reform of EXISTING legislation. Stronger measures and penalties are required for the appropriate sections of the LTA 1987 (as amended by the Housing Act 1996), the Leasehold Reform Act 1993, and the Commonhold & Leasehold Reform Act 2002 to deter the continuing criminal element that has so successfully made inroads into this unregulated industry
When Ground Rent was only ever intended as and set at a peppercorn, thereby enabling flats owners to enjoy the same financial security as freehold house owners, flat owners were assured by their leases and protected by legislation that they were acquiring a valuable asset with their hard earned income
Instead, in a stampede reminiscent of a bygone era, Carpetbaggers and Vagabonds abound. The astonishing ease with which an unscrupulous band of thieves, aided by equally unscrupulous Shyster lawyers, has set about trying to re-invent Ground Rent as a “modern” asset earning vehicle and, falsely, asserting it a part of the Free Market. defies credulity and demands that new laws with clout are enacted forthwith, and existing laws enhanced, to bring this muddy, murky, and money grubbing business back under the safe umbrella of English law and regulation.
To be clear: I meant no unkindness to Peter Bottomley personally and I am happy to acknowledge his commendable efforts. My point was that I have zero trust in the Conservative Party which I regard as bought and paid for by, among others, large freeholders, and that he is providing window dressing cover to a party that puts the interests of its benefactors ahead of the public interest.
I suggest, this is why Sajid Javid is interested in regulating property managers instead of getting rid of leasehold altogether. It will allow the more circumspect freehold monetisers to continue with their benefactions.
If I may paraphrase Colbert on the art of taxation:
Lately there has been quite a bit of hissing and the Conservatives will regard all this as a possible threat to what has been a nice little earner of some backhanded feathers.
I do not think I am being overly skeptical, nor will “Look, Peter Bottomley!” persuade me that the aspiration of a country that works for everyone, not the selected few is anything but the most shameless, cynical deception.
“Instead of getting rid of leasehold altogether”. Over the years there have been countless consultations on leasehold, followed by reforms. There will be further consultations, followed by further reforms, as and when abuses reach (yet again) unmanageable proportions. Government crisis manages leasehold to save leasehold at all cost. Is the Pope a catholic? Is government an honest broker?
The only solution to leasehold is abolition, it will happen but only after government has exhausted all attempts to save leasehold.
I think a non-Conservative govt may do the needful and go a lot further to fix the burning injustices that plague the UK property market. There is enough dirt out from under the carpet now. And there’s more to come on the tax avoidance front.
“And there’s more to come on the tax avoidance front.” Tax avoidance is endemic in property – apparently something like 40% of landlords “forget” to declare and it only started becoming apparent when councils starting licensing HMOs . This is relatively small fry compared to the scale of money laundering going on on London property transactions/ change of title. In our case, the freeholders solicitors, who managed the house and never presented acoounts, was also conveyancing for a cash ‘buyer’ whose source of funding was “parents savings”. Who checks these things because to me it looked like our service charge money was being used to buy us out…
There is no where to report this scam and nobody wants to investigate it, everyone just shrugs their shoulders.
Oops, of course the Pope is a Catholic, perhaps, thereafter, it should have read, “Is government corrupt and full of chancers and agents of vested interests of every kind”.
Alec: This is the crux of the problem with regulation. I reported the frauds in my case, progressively upwards, ending up with the Police and the CPS. Every so-called authority just bats you away. They say it’s a ‘civil matter’, or make absurd excuses. I have considered a private prosecution or contempt of court proceedings, but there are greater worries in life to deal with (as the perpetrators well know!)
That’s why I urge that when legislation creates a statutory criminal offence, it should at the same time provide full CIVIL remedies that are easy to access.
Non-consensual sales (e.g. not having 66% or more owners on board) of housing blocks or estates must be VOID AT LAW, automatically, or at least voidable by a Court. That is the underlying position in the Law of Contract. It was wrecked by the Grantees of Reversions Act 1705, still functioning as s.142 of the LPA 1925.
The other problem is, as you point out, lack of enforcement of the Fraud Act 2006, or of the Consumer Regulations 2008. When I researched a few years back (and paid for advice), a retired prosecutor advised that the UK version of EU consumer law was badly drafted and unworkable, so that the Fraud Act was the only effective option for Trading Standards prosecutors. With the huge number of complaints that Police and Trading Standards have to deal with, property issues get shuffled around and dropped, partly due to complexity, and partly due to the criminal-law burden of proof (‘beyond reasonable doubt’).
The whole of Trading Standards law has come to be mainly about fair competition between bigger suppliers, rather than effective consumer protection. We need fixed straightforward civil-law remedies to match the regulations somehow, on the lesser civil-law burden of proof.
E.g. if there’s a £5,000 penalty for lack of a Section 5 notice, make an automatic £5,000 payable to each and every dwelling. And if they want to argue it in court falsely, put them on risk of a fivefold penalty per dwelling. Just suggestions off the top of my head, but from my research I know that lawyers and prosecutors themselves write about the lack of comparable civil law rights when parliament keeps making these regulations.
Alec, Even worse than a freeholder”aggressively” pushing an “informal” lease extension offer is the freeholder that is so nice and pleasant and is on the side of the leaseholder and wants to be as helpful as possible? They are the “smiling crocodile” They are the ones setting the trap. They only show their real aggression if a leaseholder avoids the trap.
Indeed Master Epstein
The ” Iron fist In the velvet glove”. …. I honestly believe that those days will soon be over.
I once had a Managing Agent from the ” Peveral., County Estate Management ” “!Solitaire” ” stonedale , Freshwater. Stable tell me that she only .bears her teeth if absolutely necessary. Well, I am about to knock them into the back of her head. Watch out mama!!!!
I still have that Agent! boy will she be sorry….
Figuritively speaking of course…….
Sussex you make excellent points and I hope you will Include them in your reply to the consultation ‘ 6 week review’.
It does seem rather a nonsense calling this 2nd review however I believe it was done so due to the demand by leaseholders who completed the previous 8 wk consultation ( which was primarily regarding ‘Leasehold houses’ / onerous ground rents) for regulation of Managing agents..
It is our chance to put forward our views of how Managing Agents must face serious financial / custodial penalties for perpetrating acts of fraud – theft – intimidaton which is commonplace amongst Residential property operators.
I have completed the consultation but will be writing seperately to the DCLG with examples of The ‘DIRTY TRICKS’ of managing agents and providing evidence.
I looked the other day, but could not find that consultation Kim (?)
Not sure if it applies to us, as we are local authority managed.
(Our good socialist council was trying to escape the responsibility and cost).
I would add that the frauds in my case were (the first in longer words):
“You have no contract with us, because you were not the original lessee” and
“The Council’s obligations ceased when it sold the land” !!!!!!!
Found this one:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/653170/Property_agents_call_for_evidence.pdf
Thanks for the suggestion
Sussex, yup that’s the one.
Questions are unbelievably turgid but persevere!!
I have just watched Savid Javid give a 15 minute interview on the Andrew Marr programme.
Whilst he seems enthusiastic about solving the housing crisis and reforming the whole housing issue there was no mention at all of Leasehold or Ground Rents.
It was all about more homes including ‘help to buy’, controlling Estate Agents and banning Gazumpimg.
Although Leasehold Reform is on his agenda it does appear to be taking a back seat.
He even regards ‘help to buy’ as being Social Housing something I am sure will not please those stuck in them, with escalating ground rents rendering them unsellable. More like Unsocial Housing.
He does seem a breath of fresh air after some of the past Ministers we have had dealing with housing, I hope he is not removed in a reshuffle
I was hoping to see some good news on the ARMA website following what appeared to be a fairly successful and constructive Conference last Wednesday.
But alas there is nothing, only a news article still encouraging people to attend the Conference which was held 4 days ago.
I note that Savid Javid believes the housing problems can be solved with more borrowing
he reason house prices are so high relative to earnings is because of lack underwriting in the past. To correct prices there needs to a significant tightening on lending and make borrowers explain in their own words (not tick boxes on a form) how they would cope if interest rates went to 7% to 10%
“We believe that Leasehold House should continue to be sold. In a free market economy, a vendor should have flexibility on the terms they wish to impose on the disposal of their property. In line with the principals of the free market there must be checks and balances to ensure there is no abuse” – opening paragraph in your response to Sajid Javid’s consultation.
Sebastian asked “Who is this “we”? Stephen dear, have you responded to Sebastian’s question?
Stephen”
ain’t responded to Sebastians enquiry
. WHY NOT? C’mon Steve, respond, we are awaiting with bated breath……Who are” we” ????? C’mon fella put your card on le table.darling.
I responded directly to Mr S Kelly
A while back I said I would not engage with you further – and have not done so until now, I said this for two reasons, 1/ When you are not dealing with almost arcane and abstruse aspects of the issue at hand, your arguments are sixth from debating society level, immature – it often appeared you were being contrarian simply for the sake of being so. 2/ The content of your posts were so heavily slanted it was apparent to me you had a dog in the fight. I asked directly if you had a vested interest, you responded by giving your background but did not answer the question. Now it is apparent you have something to hide, I am considering engaging with you again and will do so to rubbish your ridiculous postings.
There are two particular varieties of individuals I despise in this world, the first being the powerful exploiters, the second, the lackeys of the powerful exploiters. I suspect you are a lackey.
Sebastian, are we not entitled to know the profile of this poster?
Stephen, Might be more productive if you responded to MR S. O’Kelly
Stephen old boy, you might (and only might) have some knowledge and understanding of things financial and technical, but. two things are apparent from your posts – you lack keyboard skills, and if English is your first language, I wouldn’t even think of studying another until you have mastered your native tongue. You are an appalling communicator.
Do you still think more quarantine easing would help matters?
I find your comments quite frankly rude
I reply on a smart phone and when you tap away the background is white and the text is light grey and this leads to spelling mistakes compounded by predictive texting
The company I work for buys ground rents , regulated tenancies Remainder mans interests in trusts and other contingent interests and buys debentures royalties and mortgages
It requires a professional background to understand and.value them and negotiate their acquisition. A mind set which thinks about problem solving rather than name calling
Stephen
For what it’s worth, I do not believe that Davids comments are rude in the slightest. That is what he thinks of you. I recall that you made some rather ‘ salty’ comments about me in previous posts- hey , who cares? I’m a grown up and didn’t start whining about ” rudeness”.
I think that your problem ( if I may call it that) Is that you came across as an imposter and that you didn’t really know what you were talking about EG – you were just writing what you were told to write without truly understanding what is was you were saying.
It was so apparent that it was painful at times.
Anyway, don’t be such a sensitive boy and stop whining, David was not being rude it’s just how you perceive it.
One things certain. To say that Stephen supports leasehold and ground rents is a massive understatment
Stephen, you say “regulated tenancies Remainder mans interests in trusts and other contingent interests”
Sorry, it just does not make sense. Again sorry, but most content of your posts do not make sense.
Turn your predictive text off and proof read your posts. If you have not got time to do that please don’t bother to post, thank you
I was asked what line of work I do.
I explained the nature of the investments I have been involved with. If a remainder mans interest or a contingent interest is not familiar to you. That does not make my post senseless
I don’t understand string theory, but if i read an article on it I am sure I would find it beyond my abilities to understand but I would not critise the author of the article
Stephen, you say “If a remainder mans interest or a contingent interest is not familiar to you”
OK, fine I do not know what an earth you are on about. Can you please explain what you mean, thank you.
To all other posters on the site – can anybody else post up and say that they understand what Stephen is saying/meaning, thank you.
Stephen, why should you and your company benefit from ground rents? Why not the people who bought, maintain and live in the property?
I think we should all listen and learn from Stephen. Speaking for myself I am interested in what he has to say. Furthermore let’s not blame Stephen and debentures for the situation we are in. ( i.e. Escalating Ground rents, housing shortage, poor housing, tax scams, inability to challenge service charges, anyone and his dod being able to set up a management company, conflict of interest, blind & deaf tribunals, wealth concentration in the hands of the few…) The law makers need to tackle equality and we need to make them accountable.
Why is the government borrowing to build more poor housing why not simply tackle tax scams and fleece the fleece holders. Prime London has virtually NO starter flats left. They are being bought up by mysterious cash buyer with their ‘savings’.
Freeholder are great investments, you can buy them get a regular income from the tenants, short term, and long term run them down and redevelop them. Building companies paradise.
Stephen,
In my view the housing market went pear shaped when out of sheer greed lending institutions changed the criteria for granting mortgages. Twas always the case too much money chasing too few supply leads to increased prices.
Instead of treating a home as a place to live in, it is now seen as a prime investment and that is the root of the problem. If a home were treated as any other commodity rather than as an opportunity to make money either from the home owner or the off shore vultures that capitalise freehold values, we would not be in the mess we now find ourselves in. Like every other artificially created scheme in history it is about to go BANG!
I think leasehold will be abolished. Fear not.
It’s just that it is a minor part of the overall problem of prices and availability.
On that, surely it is high time that foreign investors were barred?
Seems to me they distort our market enormously.
I notice there is a new organisation formed for Freeholders called TAF
The Association of Freeholders.
Formed to protect Freeholders and the General Public.
J B Leitch is one of the first to sign up.
Shome mishtake shurley Ed………
ME, Trump says that’s “Fake News”
Have a look at their website
The Association of Freeholders
I have!!! I think it’s manufactured by Stephen, lol
I note that a key objective of The Association Of Freeholders is to promote Self Regulation as an alternative to Government Regulation. why would they want to do that one wonders?
How is that going to work? What sort of regulations are they going self impose?
Bradley
A remainderman— if a trust is set up such that the capital in the trust passes to the beneficiary on the death on another. That beneficiary is called the remainderman . He has certainty that he will receive the capital and this interest can be bought and sold
The person who gets the income from the trust is called he life tenant and that interest can also be bought and sold
The capital in the trust has to be carefully controlled so that the life tenant can only receive the income and not any capital . The remainder man will want to know that the capital is protected and will look to the trustees to protect his interest
Stephen dear, I was a shipping clerk for the best part of my working life, lots of jargon involved in the industry and related documentation. Nothing that couldn’t be understood by the uninitiated, once they were initiated – not at all like quantum physics (and string theory) which is a speciality beyond the understanding of most people even after attempts at understanding. If I were to talk to a layman of my old job in shipping I wouldn’t dream of using the jargon of insiders. I would adjust my language and terms used to accommodate the individual I was in conversation with. Communication is about being understood, obscure words and jargon are a barrier to being understood.
The only people who use jargon are those who are trying to impress, or keep a body of knowledge for a select few – the use of Latin was once the language of choice of the elite and educated, it was so to keep knowledge from,, and bamboozle, the masses. You do not impress me at all, there is nothing in your line of work which is clever and beyond understanding in the sense that quantum physics is clever and beyond understanding.
Back to the subject at hand, the sale of houses and flats on a leasehold basis is an inexcusable practise, it will end one day. When it does, you and your kind will have to find other means of earning a living. I do not worry for your gainful future, there are plenty of scams alive and well, and others will emerge over time. I do worry however for your moral well being (I am that kind of guy), repent now I say and join the crusade against the iniquitous practise of leasehold – A sinner saved is worth more than ninety nine righteous men who have no need to repent. Hallelujah!
Michael: The Association of Freeholders state:
“our members abide by a strict code of conduct…..TAF play no role in the setting of rents, reviews, or service charges.” and JB Leitch described “…as its first founding associate member”. Says it all actually.
No address provided and the 0203 number plainly intended to suggest it is located in London. The 1st conference in Sept was at breakfast time (08:00 – 10:00) -presumably in a London hotel – any minutes?
Feeeholders never have address… they are not of this world , plus they worry that their peasants, ( sorry I meant tenants) may rise….
Yes there is very little on the TAF website, or their Facebook and Twitter sites.
The appear to have arisen at the RESI Conference, Celtic Manor in September.
But be aware, there are some powerful and influencial forces amongst their members, many of whom have won awards ( however spurious) for being at the top of their profession.
They are definitely not on our side.
I have read posts about ‘ J B Leech . TAF is most fortunate to have such a bastion of rectitude as “It’s first founding associate member”. ( Snigger Snigger)
Presumably this TAF is designed to help freeholders work through anticipated abolition.
Compensation will payable if we follow the Scottish example, e.g. at
http://www.gov.scot/Topics/Justice/law/17975/LongLeases?_ga=2.223923800.2123869811.1508578584-479328004.1508317047
it says:
‘Under the 2012 Act, compensatory payments for a former landlord are based on the annual rent payable under the ultra-long lease in question. In some circumstances, additional payments may be payable by tenants to landlords.’
Bound to be some argy-bargy setting values?
The Scottish valuation is aimlessly at very small rents on terms in excess of 100 years
The 1993 Act valuation used at present addresses the valuation of the reversion and takes into account all future rises in ground rent.
There has been talk of prescribing discount rates for income and the reversion to make the enfranchisement/lease extension process easier..
However abolishing the formula used in the last 25 years for a simple multiple of the rent and the ignoring of the reversion would seem highly unlikely
The lease extension process is already easy – it is a statutory 90 yr extension with ground rent reducing to zero.