– House manager’s flat sold for £105,000, with £15,000 paid into reserve fund
– Unexplained ‘goodwill payments’ over management disputes
– Hanover addresses disastrous £500,000 loss in Smartsource Water
– Former executives say ‘it wasn’t our fault’
– Grumbling over exclusive Hurlingham Club beano for Hanover staff
Residents at Leonard Hackett Court in Bournemouth are fed up with “high-handed diktats” from Hanover housing association
Residents at Leonard Hackett Court, in Bournemouth, are questioning the right of the Hanover housing association to sell the house manager’s flat at the site.
The sale for £105,000 went through earlier this year after residents were balloted on whether they wanted to continue with an in-house manager in 2012.
They voted for a part-time role, but claim that they never agreed to the sale of the house manager’s flat, for the upkeep of which they contributed as stated in their leases.
Indeed, the residents feel that they may have as much right to some of the proceeds as Hanover, which claims to be full freeholder of the site.
Leonard Hackett Court was built in 1981 with £300,000 funding from the defunct Housing Corporation, the remainder was paid for in sales from Hanover
At the time, the site was a flagship “Leasehold Scheme for the Elderly”, where residents own 70 per cent of their properties.
Hanover claims ownership of the 30 per cent retained equity, and although the residents association has attempted to purchase this portion it cannot do so.
“This is to ensure that the same affordable options are available for further leaseholders in the future, as were available for the current residents,” says Hanover.
After the house manager’s flat sale, Hanover placed £15,000 into the Leonard Hackett Court reserve fund, which is £5,000 more than is habitually paid when similar flats have been sold at Peverel managed complexes where the Tchenguiz Family Trust is the freeholder.
“We do not think the house manager’s flat was Hanover’s to sell,” says Peter Penberthy, the residents’ association spokesman.
“Hanover dealt with this by diktat rather than discussion, and it decided to sell the flat. The decision was taken without our involvement to any degree.”
Hanover contradicts this version. It claims that “residents were advised the flat would be sold” at the time of the residents’ ballot in 2012.
“As the freeholder and landlord of the estate, there is no question but that the freehold [sic] of the flat is in Hanover’s ownership,” the housing association informed Campaign against retirement leasehold exploitation.
Campaign against retirement leasehold exploitation’s question to Hanover of when a lease was issued for the house manager’s flat was not addressed.
Legal opinion, provided to Campaign against retirement leasehold exploitation, disputes whether freeholders can dispose of these communal assets. The issue of sales of house managers’ flats in the sector is being considered by government authorities, including the police.
In the absence of a resident house manager, Leonard Hackett Court survived happily enough for 15 months with a live-out house manager employed by Hanover visiting for two hours a week.
It has then declared that six to eight hours a week were necessary, the residents claim, and Hanover has now decided to raise this again to 19.2 hours with a new person appointed.
“Our most recent meeting last week was not a pleasant experience,” says Mr Penberthy.
“None of us saw ANY evidence of an association interested in the elderly and vulnerable … It was more about how much money they could make out of us!”
Questions surrounding the house manager are the latest in a series of acrimonious disputes at Leonard Hackett Court, a site of – now – 36 flats.
Residents blame Hanover for failing to build up a reserve fund and the site now faces £150,000 of repairs over the next five years, the main items being refurbishing the lifts and roof.
As a “gesture of goodwill” Hanover paid another £15,000 into the fund to address this.
It has not explained why it felt compelled to do so.
In its statement to Campaign against retirement leasehold exploitation, Hanover housing association says:
“Leaseholders are responsible for the cost of repairs and maintenance on their estate, and there is clear documentation to show that successive housing managers have proposed increases to the reserve fund, which would allow any significant repairs, maintenance and improvement works to be done on a planned basis without the need for unexpected calls on residents’ ability to pay.”
“Hanover has made residents aware that the alternative would be that they would incur one-off invoices for works as and when they were needed.
“However, over the years residents have on occasion chosen this option instead, as a result of which the reserve fund reached low levels.”
Mr Penberthy, who has involved Conor Burns, Conservative MP for Bournemouth West in the disputes, dismisses this.
“Hanover has an army of managers but many are not efficient, and they waste money,” he says.
Originally, the works to the lift were estimated by Hanover to require c£110,000 (the residents claim £130,000 was demanded).
Inquiries initiated by the residents suggested that £40,000 would be sufficient, and this is now accepted by Hanover, although “this will only provide a solution over the next five years or so rather than the longer term”, it says.
A £1,440 survey of the lifts, commissioned by Hanover, has been reimbursed to the residents.
The roof will also require £20,000 to be spent on it in the next four years, and £16,000 fire safety works may also be necessary, the residents say.
A suggestion that Hanover reduce its management fee of just under £15,000 a year by £5,000 was not accepted.
This proposal from the residents was prompted by the new chief executive Dame Clare Tickell declaring earlier this year that “we cannot solve all the problems, but we can share the pain”.
The residents do not report much sharing in this regard, and are scathing about the spending priorities of Hanover, which boasts of “excellent customer service” and that “over 93% of our residents say they’re happy with the properties and services we provide”.
Last autumn, Hanover, which manages 19,000 properties at 600 locations, held a party for 650 staff at the exclusive Hurlingham Club, in south west London, to celebrate its 50th anniversary.
Leonard Hackett Court residents question whether they contributed financially, and are censorious about the lavish festivities.
More important for Mr Penberthy was Hanover’s disastrous £500,000 loss after signing up with Smartsource Water, a Reading-based utility agent that promised annual savings of 8.3 per cent on water bills.
It went bust last September, leaving customers owing millions to water providers.
Former Hanover CEO Bruce Moore
Leeds-based Hanover resident Dave Hutchinson raised the issue on MoneySavingExpert.com in June naming former Hanover chief executive Bruce Moore and former Hanover retirement managing director Tony Tench.
Both executives, who are now employed by Housing and Care 21 housing association, subsequently replied to Mr Hutchinson.
Mr Moore said on July 12:
“Although I was still CE at the time and hence accept ultimate responsibility for a poor decision, I was not made aware of the intention to sign up to this contract.
“When I discovered the nature of the contract the difficulties were already evident and shortly afterwards the company went bust.”
Mr Tench also felt “compelled to respond” on July 15:
“I was not directly involved in the procurement of the contract with smartsource whilst at Hanover. I was, however, responsible for recommending to get out of the contract once it came to my attention.
“By that time I was leaving Hanover to pursue an opportunity with Housing and Care 21 and was not party to how Hanover have since handled the situation.
I’d expect that Hanover carried out a thorough investigation and alerted the regulator (HCA: Homes and Communities Agency).
“I’d not expect any resident to suffer any financial loss from the contract.”
The subject of Hanover’s £500,000 disaster featured in the Hanover’s Residents’ Council meeting in March.
New chief executive Dame Clare Tickell addressed the issue, according to the minutes.
“Hanover has lost £½ m as an unsecured creditor of Smartsource who have gone bankrupt. Smartsource is a broker that claimed it could cut the cost of water …
“Hanover has learned lessons and Clare reassured Council that it will have no direct impact on residents as the loss will be covered from reserves, but there may be press interest … “
Leonard Hackett Court does not have much in terms of reserves of its own.
“We certainly cannot afford to bail out Hanover for its utter stupidity,” says Mr Penberthy.
Campaign against retirement leasehold exploitation has also been sent a statement from Dame Clare that is to be sent to Hanover residents addressing the issue, although dated July. (Below)
Hanover says: “We believe this to have been a one-off incident which is not liable to any repetition. There have been a number of staff changes since this unfortunate event.”
Hanover’s full statement to Campaign against retirement leasehold exploitation can be read here:
Dame Clare Tickell’s statement to residents regarding the £500,000 lost with Smartsource Water is below. It emerges that other housing associations also signed up for the scheme:
DameClareTickellSmartsourceWater
All those who have comments for the Competition and Markets Authority inquiry into leasehold management should send them in by September 19 2014 to:
Residential Property Management Services Study Competition and Markets Authority
Victoria House
37 Southampton Row
London,
WC1B 4ADpropertymanagers.study@cma.gsi.gov.uk
The CMA will publish its full report by the end of 2014.
Campaign against retirement leasehold exploitation Admin,
Does this company have any relationship with Peverel Retirement as the chaos caused is very Peverel Retirement like???
Campaign against retirement leasehold exploitation Admin,
Does this company have any relationship with Peverel Retirement as the chaos is very Peverel Like?
As a properly ratified Residents’ Association (which took Hanover 4 months to confirm) we are very grateful to Campaign against retirement leasehold exploitation for highlighting our difficulties.
In response to Charles Willis, Hanover are a separate ‘business’ to Peverel’s but it should be noted that Peverel’s and Hanover are the leading members of the ARHM (Association of Retirement Housing Managers) which purports to be ‘Raising standards in retirement housing’ yet the ARHM has a rather sad membership of less than 35 Housing Association members, with Peverel’s and Hanover appearing to run this ‘trade body’ with a tired, out-of-date, website!
Following our Formal Complaint to Hanover, a 17-page response virtually absolved them of any wrong-doing. We are fortunate to have the very patient support of our local MP, Conor Burns, and his senior-caseworker, Jeanne, who have both done much to help us. By highlighting our frustrations we hope that Campaign against retirement leasehold exploitation will encourage others to seek more sympathetic treatment from their managing agents.
LHC Residents’ Association, Bournemouth
Whether they have a right to sell a communal asset depends on if it IS a communal asset. In these cases where staff provision can be varied under a lease by ballot, it is rare to find that the leases require that the flat remain in place come what may, and only in very specifi circumstances under the control or ownership of residents.
In many cases ther sale of these units and reduction in service may appear attractive financially( though SC can often go up) it is often short sighted as the nature of residents requirements do change as does their level of dependancy. Sell offs can make buildings, over the long term, less” elderly friendly”
AM …
Many thanks for your observation. What we cannot understand is that when LHC was built in 1981, the 35 leaseholders purchase fees and the Housing Corporation grant of £300K met the TOTAL cost of all 36 flats. The original warden service, for which the wardens’s flat and salary necessitated an EM flat and, over the years all leaseholders met such costs of salary and upkeep of the flat. In later years Hanover actually decided that EM’s should pay rent on their flats, but their salaries were increased accordingly. It was the leaseholders who met the EM’s salary, plus increase, but the rent ‘disappeared’ in Hanover’s accounts!
So, when it was decided we no longer needed a warden service, surely the EM’s flat should revert to the residents?
LHC Residents’ Association
I understand your reasoning however your leases would have to document that, by ensuring that accommodation, or for that matter the type of staff provision, is binding i.e. the flat must be provided and can only be used for site staff. Each owner then has a contract which requires the freeholder to provide such accommodation ( a point that the commonhold lemmings 🙂 overlook- they don’t have binding contract) or critically to pay rent( otherwise the FTT might make them give it back) although these premises often have ballot opt outs.
Where it is not the case, then even though the development is fully partly funded by social funding, the landlord does get double bubble. It may seem wrong, however, as you only bought the flat anything else have to be documented, no matter what you think is fair or right-sorry.
That said on the rent point above unless the lease allows for rent or if the rent set is “too high” bearing in mind you pay for the upkeep, even if some of that is paid through salary increases, it might not be recoverable under the service charge. As it is under a lease there is good chance of 12 years, not 6 years, worth of rebate that the FTT might grant, if the lease is on your side.
Peter, is EM Estate Manager?
The lease should determine the original Warden Service?
The original Planning Permission would have been allowed, with the density of flats, and if it was Warden Controlled.
Check with the Planning Department if the development now constitutes a Change of Use?
If it does then Planning Permission was required prior to the sale?
That is a good point but unless it is critical to consent for these to be built as homes for seasoned citizens, it is likely that a local authority will grant permission.
AM,
I believe Planning Authority’s, would not have given Planning Permission for a Development of the density i.e. here at Ashbrook Court there is 29 flats, no communal areas except the House Managers Flat. The provision of Warden Control was essential for the Planning Permission?
We were not informed that it was classed as communal by our Area/Regional Manager who we believe they would receive up to 10% commission when sold?
Charles,
Yes, EM denotes Estate Manager.
Over the years the original ‘Warden Service’ was replaced with an Estate Manager.
We have requested from Hanover sight of the original agreement between the Housing Corporation and Hanover when the original Leasehold Scheme for the Elderly at LHC was created and the grant of £300,000 was made. On 3 occasions, Hanover asked us why we needed to see this document before advising us that ‘it had been mislaid’!
We very much appreciate your advice, Charles, and will investigate this further … many thanks.
Peter,
I will help when I can.
Has every one gone on holiday?
Sebastian,
Comments have been removed from many of the headings at least three form Peter Whalley, and others, any reason why.
We have been informed that our good House Manager has resigned after less than 8 months, a month after Peter Whalley resigned.
.
We were just finding out how good she was.
I wish her good luck in her new venture.
We had a company called Lucion Environmental, turn up today unannounced and carry out a Management Asbestos Survey for the Freeholders Mercian Properties.
They have a pending sale to Long Harbour?
Peverel Retirement had not indicated anything, not even that the company was to call on a Saturday when no House Manager was on site.
The residents were very unhappy and threatened to call the police. The company surveyors left and then returned stating they had been informed they were to undertake the Management Asbestos Survey but were not to inform the residents what they were really doing so as not to worry them.
The two surveyors were very polite and responsive, they put me through to one of the Directors who confirmed what was been undertaken.
This is typical of Peverel Retirement and our Area Manager, who we pay over a £1,000 a month to ignore us?