The issue of the ownership of the house manager’s flat at Mere Court, Knutsford, has again been raised, this time with the Land Registry.
Alex Ellison, whose mother lives at the site, wrote explaining that all the leases at Mere Court (registered under the freehold title of CH261040) were created 20 years ago.
In all 39 leases there is a clause on page two:
“the lessor has previously granted leases or intends hereafter to grant leases of the flats in the building other than the premises hereby demised and other than the House Manager’s flat.”
Alex Ellison: wants to know why a lease was created on the house manager’s flat
And on pages 14 and 15 the responsibilities of the leaseholders towards the upkeep of the house manager’s flat are described.
In June 2013 the managing agent Peverel encouraged residents to give up their interest in the flat and move to a non-residential manager so that it could be sold off.
Peverel repeatedly said in writing that it had no interest in the matter and that it was liaising between the leaseholders and the Tchenguiz freehold-owning vehicle Proxima.
Alex Ellison was then appalled to discover from the Land Registry that the flat had been registered to Peverel itself on August 24 2009.
It is recorded under titles CH588914 and CH588931.
The residents’ confidence in Peverel’s proposed changes evaporated and they refused to opt for a live-out house manager.
Peverel and the Tchenguiz organisation habitually compensate residents with £10,000 into the contingency fund after selling a house manager’s flat.
It now emerges, thanks to the residents of Leonard Hackett Court in Bournemouth, that the Hanover housing association has been following the same practice, but pays in £15,000.
Mrs Ellison asked the Land Registry how it could register an alternative owner of this property when it states so clearly in the 39 other leases that the lessor would not grant a lease on the house manager’s flat.
Peter Whalley, a former regional manager who left Peverel’s employ last month, frankly admitted that Peverel’s decision to issue a lease to itself could be challenged. In a letter to a leaseholder at nearby Ash Court on October 31 2013, he wrote:
“Should the house manager’s apartment be sold, the general apartment leases will not be changed. The existing leases of the house manager’s apartment are surrendered, the finance security is released, and a new lease is granted out of the freehold title in a similar form to the general apartment leases.
“In doing this, both the landlord and Peverel accept that there is a commercial risk that doing this could be successfully challenged.
“To date, there had been no such challenge.
“If there was a successful challenge, Peverel or the landlord would have to purchase suitable accommodation and re-instate a resident house manager.”
Mrs Ellison complained about Peverel’s handling of the affair to the Association of Retirement Housing Managers, which is overwhelmingly funded by Peverel.
But the complaint was rejected.
It ruled that Peverel’s communications with the residents “could have been improved”.
“However, on balance, we do not find that there is overwhelming evidence to suggest that Peverel were driving the option of a non-residential position to any extent, or to prejudice residents during the consultation and ballot process.”
Meanwhile, the Land Registry said it could not give Mrs Ellison “advice of a legal nature” and said she should “seek professional advice”.
Related posts:
Mere Court residents should vote as they wish, but tell Peverel it cannot sell the house manager’s flat until its ownership is clear
ARHM rejects complaint that Peverel pushed Mere Court residents into agreeing house manager’s flat sale …
Hand over £100,000 Mere Court house manager’s flat and we will give you £10,000, say Peverel / Tchenguiz
Sacked Peverel house manager went on spending spree … on flowers
It would be very interesting to know how many other leases are like this where a House Manager’s flat has been sold off.
Concerning a dispute over a ground rent valuation that had been claimed to have been carried out but had not, E&M’s solicitor (JB Leitch) advised me that E&M had subsequently caried out the survey. That they had now complied with the lease meant that the past breach was no longer an issue, as it had been rectified. Legally i believe the advice given was correct.
If for supposition Peverel had created unlawful leaseholds and had borrowed against unlawful leaseholds or borrowed against the full value of a flat without declaring the flat was restricted for the use of a house manager, they would face severe legal consequences.
However, if they could persuade residents to remove a live in house manager and as a result create a new lease, than as advised by JB Leitch, they would have ceased the breach.
It is my view, that Peverel are not really bothered if a development has a house manager or not. It is a ruse to create a new legal lease.
Nobody should accept any statements about what E&M have or have not done, even statements from solicitors.
During speech in Paliament in Feb 2002, Barry Gardiner MP ( Bent North) identified E&M as a ground rent grazer , i.e forgetting to post the ground rent demands and subsequently claiming hefty recovery charges from leaseholders in ground rent arrears. E&M were in the business of claiming recovery charges .
During late 2004 and 2005, MPs ( including Barry Sheerman, MP for Huddersfield) drafted Early Day Motions against E&M to seek Housing Ministers Department investigation into the set up of Consensus Business Group, based in the British Virgin Islands.
Keith Hill then Housing Minister declined to investigate claiming the Housing Department had no resources for investigating companies, after separation ( from Dept of Trade and Industry – not sure the correct name) . This seemed to be the green light for Consensus Business Group to expand by subsequent takeover of Solitaire & Pemberton Group, and Peverel Group etc using huge loans arranged by ML and BOS and Kaupthing ( Iceland). Its very strange that none of these banks carried out due-diligence on E&M and CBG before making the huge loans.
In Oct 2008, Kaupthing Bank collapsed and was found to have over lent to Tchenguiz Bros and the UK Government had to pay out £3 Bil compensation to UK depositors covered by the Depositors Guarantee. Now Iceland Government have refused to repay the compensation money. to UK Govt. .
ML ( USA Bank) was insolvent in Oct 2008 and had to be rescued by B of Am, BOS & Halifax were insolvent in Oct 2008 and rescued by Lloyds Bank which later had to be propped up by UK Government loans (money raised from taxpayers ).
Ollie,
Don’t forget Early Day Motion 342, in which the practice of not cashing cheques received in order to generate late payment fees.
ME,
Yes , thanks for reminding me that not “cashing the ground rent cheque” was also a regular problem in the past when in those days ” ground rent payment was due whether demanded or NOT”.
The Commonhold & Leasehold Reform Act 2002 introduced the requirement to invoice the annual ground rent demand and ended the abuses on “ground rent grazing” activity around 2004. But E&M moved onto the rising BTL rental market and began demanding excessive fees for granting freeholder consent to sublet and many such cases ( charging 400 + pds for global consent to sublet) were raised before the LVT.
We need to tell the whole story on leasehold abuse and keep repeating for the benefit of new leaseholders and to gain their support. .
For a small fee anyone can access the list of properties mortgaged by Peverel HMP Ltd (presumably HMF stands for House Manager Flats) from Companies House. Details as follows:
Website: Companies House
Company Number: 06776392
Company Name: Peverel HMF Ltd
Product: Particulars of a Mortgage or Charge. Information is on Charge No. 4 and Charge No. 5, details of each require a card payment of £1.
These documents list hundreds of flats as being mortgaged by Peverel HMF to the Royal Bank of Scotland. Although the documents do not give the amount of the mortgage, it is believed to be £25million. If Peverel did not disclose to the Bank that some were House Manager flats and therefore subject to the rights of the leaseholders then the collateral value it offered is hugely reduced because these flats cannot be sold to realise their value unless the leaseholders give up their right to a residential manager. One of the important points of this list is how many of these are flats with a residential manager where Peverel is ‘encouraging’ the leaseholders to change to a visiting manager.
At Mere Court, there were many residents who would have preferred a non-residential manager but who voted to retain a residential one to frustrate Peverel’s duplicitous attempts to sell the flat. Developments that do wish to go down the non-residential route should be sure that they are aware of their rights and should negotiate a fair price for their compliance with the change. They should certainly not accept the derisory £10,000 contingency fund payment that appears to be the ‘norm’, although I have heard that in some cases the residents received nothing at all.
Hi Biggles,
Ours for a start!! at JCH in Canterbury, Kent. In 2007 after residents voted for part time warden we were advised that residents would receive some of the proceeds from the sale of the wardens flat. The flat was sold and Hyde Housing advised us that we would NOT be receiving any benefit from this sale. At that time Campaign against retirement leasehold exploitation was not known, so we felt we did not have anywhere to take our grievence that we thought would listen.
Just hope someone is listening now.
Ann Carte
Carte,
Yes someone is most certainly listening(especially at Peverel) Whatever has gone on with house managers flats is a matter of legal record. Thanks to the inspired work of Alex Ellison and the determination of Campaign against retirement leasehold exploitation/LKP to see justice served, no effort will be spared to expose the truth.
This situation has the potential to be much more serious for Peverel than the collusive tendering scandal. I understand senior management have been engaged in meetings as to how to respond to the latest threat to their business.
I strongly recommend that everyone where their House Manager’s flat has been sold off should check their lease and see exactly what it says. For example my lease clearly states if there is a fire then the Freeholder will have to re-instate the House Manager’s flat. This may come as a surprise to the Freeholder.
Found some complaints against JB Leitch Solicitors posted on another forum :
http://forums.moneysavingexpert.com/showthread.php?t=4882274
The wording does not exactly preclude granting a lease on it. Unless there is more to the clause then it is really a matter of the freeholder being bound, if they are, to providing a resident service, to make an a argument for retention.
The response that Peveral would have to buy suitable acomadation is quite amusing. All the flat owners should refuse to sell forcing them to pay an extortionate sum to buy one flat, and thereby be the case model for the term hostage to fortune 😀
As Alex Ellison has posted on 17th Aug 2014, all retirement blocks with HM Flat and no HM living on site should check if the ownership of the HM flat is registered under Peverel HMF Ltd and if the rent and council tax for that flat is still paid from your service charge account ?.
You can check when a lease was granted on the HM flat by purchase of the leasehold title from Land Registry Online ( costs about 4 pds by credit card. )
Peverel Group was previously acquired by Consensus Business Group ( led by Vincent Tchenguiz ) in 2007 and under CBG control until placed into Administration in Feb 2011 under Zolfo Cooper. ( It may be a case of internal asset stripping after takeover of a freehold portfolio company ) . So you need to establish the exact starting date of the lease for HM Flat to identify if occurred whilst under CBG or under Zolfo Cooper or under JE ‘s watch.
From Companies House filed records , Peverel HMF Ltd was incorporated on 18 Dec 2008 , starting with directors including Wiiliam Proctor , Michael Gaston, Nigel Bannister and David Edwards. The CH records show that William Proctor and Michael Gaston resigned on 14 June 2010.
If you have studied the directors movements in Consensus Business Group subsidiaries, you will have observed a regular rotation of directors except for William Proctor who appears to be the permanent director in all the freehold owning companies controlled by Tchenguiz Family Trust based in the British Virgin Islands.
So it would be nice to identify all those HM flats which were issued new leases from Dec 2008 to Jun 2010 and were all the existing leases amended to agree to the waiving of the HM Flats upkeep from the service charge account ?
Were the leaseholders consulted before the HM flats were given leasehold title and transferred under Peverel HMF Ltd name ?. What was the transfer premium for each flat and was this money given back to the leaseholders or entirely spirited away before the Peverel Group companies were put into Admnistration in Feb 2011 ?
I hope Sir Peter can get SFO or FCA to investigate if any offence has been committed under the Fraud Act 2006.
Ollie,
Can you distinguish between the wholly owned Peverel development where there are only two companies involved?
We at Ashbrook Court are in a Tripartite Lease where we have a Head Lessor and a Lessor and then us Leaseholders?
Chas,
I am not a qualified solicitor or legal assistant but I understand the situation as follows :
1. The basic lease is between lessor (legal owner of the building land) and the lessee ( buyer of the land use ) . Leases over 21 years term are covered by various Landlord & Tenant Acts ( 1985 , 1987, 19993 )etc ) and the recent Commonhold & Leasehold Reform Act but most leases sold by builders start over 99 years or 125 years to enable the buyer obtain a mortgage. The leases are legal contracts and usually require the lessee to pay annual ground rent and building maintenance service charges to the lessor.
2. Tripartitie leases usually have a Lessor ( freeholder or Head Lessor ) , Management Company and Lessee ( buyer of the lease ). Some national builders would allow the leaseholders to take control of the management company ( and their service charge spending ).
3. If your block has a tripatite lease , there should be separate lease between the freeholder and lessee and latter beomes the head lessor in the second lease.
4. If the Management Company ( for service charge account ) is named in the lease and happens to be under control of the freeholder, then leaseholders must set up a right to manage company ( RTM) to replace the Management Company.
Hope this helps you .
I have just noticed that Peverel HMF is an Estate Agency and that HMF may be House Managers Flats?
Any one out there can help?
About 3 – 4 years ago, the Solicitors and Estate agents became regulated under the Money Laundering Act . You can sometimes see reference to this Act in many adverts placed by estate agents.
So you and other blocks can ask the Financial Conduct Authority to investigate (1) the legallity of the sale of HM Flats in retirement blocks.(2) If P – HMF is registered with FCA..
One issue that is being overlooked is the level of service provision. It is not simply a matter of a requirement for a resident warden or HM but if, for example, they work core hours and provide emergency support or presence at other times, then the service charge costs has to be reasonable when meeting that obligation. If the only way to achieve that is via two members of staff or 24/7 staff, taking that cost versus the cost of staff plus accommodation, as set out in the lease, it may well be unreasonable. Similarly, substituting a call centre or mobile floating support ( HM/warden in a van, yes, seriously) may also be unreasonable or a breach of contract as to service level.
We have been told that if we seek RTM we will be charged rent on the HM flat. Although our lease is difficult to comprehend we can see no reference to rent being payable. HM flat is described in common parts as is laundry and lounge etc. Enquiries to Land Registry show that this flat has had a lease granted during the tenure of the current freeholder but has reverted back to the freehold in recent years. Precise details have been requested from LR but is there a possibility of wrong doing here?
Assuming this is a Tchenguiz/ Peverel site, the new lease probably dates from 2009, which is when the addiction of assigning these communal parts to the freeholder took hold.
House manager flats are assets being mined out of leasehold retirement sites. A senior Peverel executive is on record stating that these assignments of ownership could be challenged. Similarly, dreamed-up notional rents of the house managers’ flats can be challenged. Search Oakland Court, where residents won back £67,500.
Executives for Tchenguiz Family Trust airily dispenses discounts on the notional rent of house managers’ flats at meetings with residents. Unless it is in the lease, there is no grounds to pay it. It is a try-on.
Many thanks for your information. Its not a Peverel site but has a very close relationship between freeholder and managing agent which works against the interests of those who pay the bills. The current freeholder paid a tiny amount of money for the freehold. Their seeming ability to claim”ownership” of assets far in excess of the few thousand they actually paid and then attempt to charge rents on those assets is hard to believe.
Freeholders have powers way in excess of their investment in a block of flats – and very few indeed are buying freeholds just for the ground rents (which with lease reversions are the only supposed revenues).
Always ALWAYS ALWAYS buy the freehold, if only to stop someone else buying it.
Low interest loans can pay for this, and then the nonsense of selling house managers’ flats or charging notional rents that are not in the lease can be stopped.