Lee Middlebrugh explains his genius to uncritical magazine Flat Living (which shares directors with insurer Residents Line)
Peverel was given a clean bill of health by an “independent audit” and was boasting of its improved services to ARMA – the Association of Residential Managing Agents – just days after admitting a price-fixing scam to the OFT.
On January 4 2010, Peverel managing director Lee Middleburgh – who has since left the company – wrote in a “proactive step” an open letter to the chairman and members of ARMA.
He did so after Peverel had just been fined £2,500 in connection with complaints about its activities at Westside One, in Birmingham, and at Charter Quay, in Kingston, where a court had removed Peverel as manager.
In the letter to ARMA members, Middleburgh attributed the problems to Peverel’s taking over of Solitaire and County Estates Management, both of which were absorbed into the Tchenguiz empire earlier than Peverel.
“In the Autumn of this year, working with ARMA, we underwent an independent audit of our work to date,” wrote Middleburgh.
“The audit indicated that the steps being taken showed that our new systems and processes meet the demands of customers and the service charge management code fully. In no area were specific additional requirements highlighted.”
Getting tough, ARMA style: a report on page 3 of January 2010 newsletter
Peverel’s fine work in the “personal development, training and education” of employees had just won Peverel an Investors in People accreditation in November 2009 – just as the price-fixing scandal was hitting the pages of national newspapers.
Cirrus, the door entry and warden call service at the centre of the price-fixing scandal, won a National Business Award for “employer of the year” in November 2009 – the month before it admitted cheating pensioners to the OFT.
(Campaign against retirement leasehold exploitation has contacted the National Business Awards scheme to see whether being disgraced by an OFT investigation means Cirrus will have to return the award.)
Needless to say, ARMA eagerly swallowed Middleburgh’s explanations, announcing in a tiny aside in its newsletter of January 2010, that while County Estate Management had been “severely admonished and fined £2,500”:
“ARMA has taken this action in the light of historic problems inherited by the current owners and management team. ARMA is satisfied that real progress is being made by the new management team to address these historic problems.
“Members are referred to a recent open letter sent to them by Lee Middleburgh.”
At the same time Middleburgh shared his thoughts in an uncritical interview to readers of Flat Living magazine (which shares directors with Residents Line insurance).
“We don’t set out to be big. We set out to deliver good service, to forge relationships and seek to find common ground when dealing with disputes and difficult issues.”
A great shame he did not add:
“And we have just confessed to running a sham tendering process with Cirrus to the OFT which has cheated retired residents of tens of thousands of pounds.”
Lee Middleburgh’s letter to the ARMA membership of January 4 2010 can be read here:
Related posts:
Peverel cheated pensioners in £1.4 million tenders at 65 sites, says OFT
Pravda alive and well on the websites of LEASE, ARMA and Peverel … who ALL support the OFT inquiry into leasehold
Cirrus isn’t an ARMA member so we have nothing to say about the price-fixing scandal, says Michelle Banks
Cirrus tee-hee email: Cheating oldies is ‘not an official part of the process (tee hee)’
This comes from ARMA.
ARMA members are required to comply with ARMA’S Bye-Laws, The RICS service charge management code and the relevant law.
Our Bye-Laws include a requirement to avoid unscrupulous or dishonest behaviour which takes advantage of the customers.
It may be felt that Peverel’s admitted price fixing is contrary to all the guidelines set out by ARMA for membership. We await ARMA’S response in anticipation.
> avoid unscrupulous or dishonest behaviour which takes advantage of the customers.
Surely you are joking? This has been Peverel’s modus operandi all along.
Huge insurance commissions for doing nothing?
Refusing to make legitimate insurance claims in order to depress premiums?
Taking kickbacks on electricity?
Installing high energy light bulbs to run up the electricity bill?
Taking “contributions to overheads” (kickbacks) from suppliers?
Using connected companies wherever possible? (e.g., hire poor staff — fail to check references –, tolerate absenteeism, use a connected agency that charges inflated prices)
Charging management fees on total expenses (a violation of the RICS code and a conflict of interest)?
Charging management fees on VAT “by accident”?
Helping oneself to reserve funds, not just for cashflow reasons but to make good debts of defaulting leaseholders (this is theft, plain and simple)?
There’s more. Lots more. Is there a more corrupt company in the country?
But it’s worse than all of this. There is, in addition, the understaffing of property managers. As result many mistakes were made that should have been avoided. Some with financial consequences, some with the potential to threaten life. There are more chickens to come home to roost.
ARMA cannot fail to have been aware of the difference in staffing, reputation and conduct.
But you have to realise a lot of that was done outside Peveral, just as done by Erinaceous and others, and is still done today. Many firms have a dedicated insurance company who pay commissions into the parent and therefore the agent technically receives no commission. The % issue is wrong – if the lease requires a % then they are stuck with that. The ACOP does not apply to professional fees eg technical services fees. Are they truly appalling, yes, but its not a simple as it seems.
Paul Joseph,
You ask “Is there a more corrupt company in the country?” As someone who has fought Peverel for so many years in my opinion the answer is YES.
I will not name them, suffice to say they used to own Peverel!
ARMA won’t have a lot to say except ” that was 4 years ago, the business was sold and is under new ownership. As long as they pass muster now, not a lot we can do “.
Both ARMA and ARHM will have to make a statement and take some disciplinary action.
The have rules and principles which their members have to adhere to. They are supposed to regulate.
If they completely ignore the situation then they will be a complete let down to the vulnerable residents who rely on them for a fair deal.
I don’t disagree, however they will argue that having cleaned house of ownership and the managing staff, what punishment should there be?
AM, Clearly Peverel can’t be punished. That does not mean they cannot be forced to repay what has been cheated from residents. The OFT statement made to me is explicit,in that they consider by issuing the infringement notice they have left the way open for residents to take action. The OFT fully expect this to happen. What that form of action will be is being discussed. There are many options available.
Imagine in a court, residents claim for repayments either based on the increased costs of the price fixing or on the fraudulent use of service charge trust accounts. That it happened has been proved and admitted to, so no defence for Peverel in that regard. Crucially, Miss Entwistle has put in writing she does not know the true cost of the price fixing. It would be rather awkward to suddenly come up with a figure in court.
I feel sure the Court will take notice of the fact that residents were willing to go to mediation and be bound by the decision, but the company that instigated the price fixing refused point blank.
Whilst I take the point about new management, Peverel undermine this position in that Andrew Davey is still a key member of Peverel management
Well if the challenges on service charges and a criminal investigation launched, then it is more likely that any liability that falls on Peveral will cripple them, and even where it falls on the landlord and or others, it will certainly affect their credibility, even if it is in the past. While those in the sector might take a view on that owners such as yourselves wont, which builders and landlords will pay attention to. I share your frustration at ARMA they were clearly too close to this organisation. That said much of the sector steers away from new new build as it is a “right pain” and focus on established buildings, leaving it to the likes of Peveral etc.
Is there anything in the ARMA code of conduct that mentions offering to pay funds into service charge accounts in exchange for residents agreeing to allow Peverel to sell House Managers flats?
Or for that matter, allow freeholds to be bought on the condition that a long lease is granted in respect of House Managers flats?
Whilst I understand a considerable sum has been identified by Peverel in realising assets from House Manager flat sales, I note since Campaign against retirement leasehold exploitation/LKP mentioned the possibility that these flats may not be Peverel’s to sell, Peverel have gone very quiet about such sales.
Michael/Sebastian/Susan/Martin/Mike/AM,
I have read our lease which is tripartite and I have read and re-read the lease. I have not seen anything that allows the Wardens Flat to be sold as it is part of the development.
Our Freehold has been sold to a Freehold Purchaser as we were unable to find 15 residents who cared enough who owned the development. This may seem harsh but only 8 residents showed any interest in the purchase even though we had the £34,000.00 to purchase.
We have a freeholder/head lessor a landlord/lessor and us the lease holders. The company that had purchased the freehold has to give the lessor Peverel a 250 year lease as part of the deal. Peverel already have a head lease for 125 years, but now requires 250 years extension, “so as to have the scope” Freeholders Words.
The lease does say that the Wardens Flat is part of the development, so can it be sold independently as we now have a part time Warden House Manager? The existing freeholder Mercian Developments Ltd had agreed to build an office within the development so the Wardens Flat can be sold. Are they allowed to do this???
“I had placed notices on our Notice Board which have now being removed, we are trying to find out who removed them” Our Area Manager informed us that even though we purchased the Notice Boards we were not allowed to place notices within as they are only for Peverel Retirement, Peverel Management Services Ltd and Peverel Services to use????
Why would a lessor, Peverel, require a freeholder to give them an extended lease when they already have a 26 year longer lease than we have?
It all depends on the title. Peveral may be acting as agent and not the vendor.
We have had 2 winters with a dangerously leaking roof in a property managed by Peverel’s OM Property Management in Bracknell, Berkshire and all the fences down but unfortunately this evil Ombudsman is clearing them, giving them a thumb up to rip off the hardworking public. This is the height of corruption in the UK, is there nothing anyone can do to rescue us here? I need help, please save us from another impending APOLLO in our property. HELP SOMEBODY OUT THERE!!!
Ade,
I am very surprised that Peverel are involved in another problem with a roof, particularly in Bracknell.
If you see the article on Campaign against retirement leasehold exploitation regarding Crowthorne Lodge , Bracknell (June 14th) you will see you are far from alone in having problems.
Ade,
If you have the support of other leaseholders , you can form a RTM company to replace your existing management by another which accepts instruction from the RTM on how the estate service charge is administrated. Alternatively get the leaseholders to collectively buy the freehold. ( enfranchisement ).
You can download the free guide on RTM and freehold enfranchisement from http://www.lease-advice.org
There are number of options through joint action with neighbours however if the roof is leaking, contact your local council environmental health department ( who may waffle about only dealing with rented property but thats to avoid costs so persist, they are wrong as the 2004 Housing Act applies to ALL property) or use the disrepir protocol.http://www.justice.gov.uk/courts/procedure-rules/civil/protocol/prot_hou
If safe to do so and you are all able to do so, why not organise residents and a bag of nails and hammers and put the fences back up yourselves? For the time and effort and £10 of fixings thats a lot less than you will be charged per flat!
Chas, even if it is sold you can still enfranchise with the requisite majority nominating a smaller number, you said 8, as the nominee purchaser, in this case, by the 8 forming an RTE company. LEASE has a guide on the process. Once you complete others may well buy in.
On the development warden flat issue, its hard to say without seeing the lease, but you are on the right track to see if the flat is part of the development as the leases sets out, whether than definition can be varied or presecribed, whether the level of service can be maintained with non residential service, whether that variation is permitted under the lease, whether the impact on costs of say 24/7 staff is recoverable, fair or reasonable, and so on.There may be rights granted or obtained to use the areas which will be curtailed or lost by the construction of the new accommodation.
If you are serious then my advice would be to take the lease and seek counsel’s advice direct for opinion before acting. http://www.barcouncil.org.uk/instructing-a-barrister/public-access/
AM
Thank you for the information, the date of the purchase of the freehold has passed and the Freeholder has commenced the Freehold Sale. I have spoken to the freeholder who is very helpful and allows me to contact him as and when I need to.
We were informed in April last year that the Wardens Flat will be sold after the new office has been built. We checked last week with the Planning Office, they informed us that no application had been received even though we had been informed in April last year that the process had been commenced.
We were informed recently by Peter Whalley Regional Manager that every thing was in hand, another fictional statement, from Peverel Retirement (Peverel Managing Services Ltd).
Perhaps it is recognition of past failings, ARMA decided to appoint Sue Petri, Head of Business Development, Peverel Group, to the ARMA Governance Board?