And two-thirds of leaseholders don’t feel they get a good service from their managing agent
These are two of the results of the survey of leaseholders – and RMC directors –by the Leasehold Advisory Service.
According to the LEASE website, the leasehold survey “is a tool designed to support the sector and not a commercial or business development initiative”.
In total, 1,244 leaseholders took part, including 200 RMC directors.
LEASE says:
“The survey has made a number of alarming discoveries – the vast majority (68%) of leaseholders have little or no confidence in the ability of their managing agent to deal with a problem or dispute, with just 6% being ‘very confident’ their agents would act effectively and efficiently to resolve it.
“Poor communication between managing agents and leaseholders is a real threat to enjoyment of a leasehold property, according to the survey, a problem exacerbated when the lack of clarity and information creates mistrust.
“Furthermore, this is leading to leaseholders feeling they have very little opportunity to be involved in the management of the property, and that they want more democratic decision-making with a greater say on how their service charge is spent in particular.”
Of crucial importance were the views of RMC directors.
The LEASE chairman Roger Southam has stated that after manning the advice lines he was struck by the number of complaints from RMCs, RTMs and where the freehold was owned by the leaseholders.
He wrote in News on the Block in April:
“… from the phone sessions I discovered that a number of the callers were leaseholders who owned their freeholds. This was interesting because I had long thought that owning the freehold as a leaseholder was the panacea that would give the controls and access that is the holy grail.”
The Competition and Markets Authority has already established that RMC / RTM blocks are more harmonious than freeholder-imposed management.
The leasehold survey found:
“RMC directors are generally happier with their leasehold properties than ‘ordinary’ leaseholders due to a greater sense of control over the property’s management.”
The key findings of the leasehold survey were:
- Just 6% of leaseholders are very confident the managing agent could resolve issues.
- 68% of leaseholders have little or no confidence that their managing agent could resolve issues efficiently and effectively.
- 51% of leaseholders see a change in managing agent would improve matters and benefit the block.
- 1 in 5 leaseholders are unaware they could replace a poorly performing managing agent.
- 55% of leaseholders consider changing managing agents would be a difficult process.
- 48% of leaseholders believe a lack of knowledge is a real barrier to changing managing agents.
- 40% of leaseholders strongly disagree that service charge is value for money.
- 62% of leaseholders say the service hasn’t improved in the last two years.
- 55% of leaseholders know where to go for information, but 32% definitely do not.
- 52% of leaseholders are confident they know their rights and responsibilities.
The leasehold survey also identified that “one of the biggest challenges facing the sector is finding leaseholders willing to take-on the role of RMC director”. There is “a clear polarisation in viewpoints – split between those who find the role strongly rewarding versus those who find it challenging”.
LKP rather doubts whether any of the prime London sites with RMCs, with whom it has regular dealings, took part in the leasehold survey at all.
It was farmed out to Nottingham based Brady Solicitors, which specialises in pursuing debt and advising freeholders on maximising ground rent incomes. LKP advised RMC directors and leaseholders not to participate
Disputes in prime London can involve hundreds of thousands and even millions of pounds, and there is little incentive for directors, who are often professionally distinguished, to share their views in a leasehold survey such as this.
Anthony Essien, LEASE chief executive, said: “The findings will update the sector, including Government, on current sentiment around leasehold management, to continue to inform the debate around raising standards, and we will look to assist leaseholders and RMC Directors with the educational needs identified in the survey.”
Related posts:
The day the Leasehold Advisory Service was returned to leaseholders
Leasehold Advisory Service denies seeking ‘bungs’ to pass on leaseholders for professional services
Leasehold Advisory Service annual conference 2013 … where, this time, leaseholders are invited
Prisk to Bottomley: what’s the evidence that the Leasehold Advisory Service is not ‘balanced’? Well, how about this for starters …
Posted by ANGRY OWNER on 21 June 2016 on About Peverel
I am doing some research into the charges made by First Port for their management fees of retirement blocks and am asking for as many people as possible to confirm how much they have to pay in total per their accounts and the number of flats you have in your building. This number is to include VAT please. Thank you!
ANGRY OWNER this is the amount paid at ASHBROOK COURT 12051
When asking how much do we pay in total per the accounts it is important to realise that payment to Management Agents can be disguised in headings such as the following:-
We will pay these fees shown below to:
Peverel Retirement now Firstport Retirement.
1.Management Fees 11,089
2.Staff Employment 3754
3.Relief & Deputy 1000
4.Monitoring Service 1014
5.Insurance Commissions 350
6.Door and Emergency Service 637
7.VAT on Management Fees 2217
Angry the cost of Management Fees is £20,061 for 28 flats
NOTE
Not shown in Service Charge Budget, but shown in Trial Balance/Audit Trail, which they refuse to send as part of the Service Budget Charge, will only be seen if you REQUEST the Expenses File.
The Training of new Development Managers (DM) and the cost of Travel Expenses, according to their own literature, is covered in the Management Fees.At Ashbrook Court for:
* Relief & Deputy inclusive costs us £15.00 per hour.
• Cost for the Training Manager must be £18.00 an hour or more?
We have been charged for the Training of our last 7 DM, costing minimum of £700 each which is £4,900 since 2008 to date, even though the Blue Book and now the Yellow Book states that Training and Travel is included in the Management Fees.
I live in a McCarthy & Stone apartment block built in 2000 the Leaseholders are Fairhold Homes No4 with their allotted service managers then Peverel/FirstPort and we have constantly been complaining about increases in costs to service charges since we purchased in 2000 as you will have seen on Campaign against retirement leasehold exploitation archives & national media.
Just some of our Actual Amount 2014 paid for 2 bedroom apartment in Arkle Court 10780 having 56 apartments as requested
Management Fees for F/t house manager on 31 Hrs a week £12,891.52
Monitoring service. £ 6,486.00
Insurance. £ 7,508.00
General Maintenance. £ 10.954.
Grounds Maintenance. £ 3,492.62
VAT on management Fees £. 3,574.1
Service Charge Records since purchased in 2003 we then paid £74,264.47 increased yearly to £113,418.76 in 2014 and set for another major increase for 2016!
How can anyone warrant these annual increases ?
In his recent meeting the area manager informed residents our Contingency fund was low and admitted it has not been helped due to the continual and ever ongoing structural faults defects and problems with the roof that have had works and repairs every year since built only16 years ago !!!
Residents where also informed that the live in house manager is leaving in August 2016,she only works 31 hours in our building yet receives a 2 bedroom apartment and use of all services free so could anyone give advice if it would be feasible advisable and economical to apply for a male part/time manager as applicants appear to have interest in the accommodation not the job and what would and could happen to the Fairhold Homes owned apartment?and are we the homeowners allowed any out put or say on the outcome?
Our biggest complaint concern and anxiety is the continuing and ongoing roof problems and service charge increases and our anxieties being continually getting ignored and us the apartment owners being treated like tenants by these companies.
We supposedly purchased our apartment when advertised as maintenance free assisted living investment with future a complete fabrication and joke as yearly service charge increases have amounted to a second mortgage.
Ged & Sandra
Ged & Sandra,
You ask” How can anyone warrant these annual increases?”
During the recent select committee inquiry into the collapse of BHS it emerged that emergency funding was obtained at an astonishing interest rate of 13%.
To put that into context, some of Firstport’s loans are set at 15%!
So they need to make up the money somehow. and it is the innocent leaseholders that are the “Somehow”
You did not mention another serious issue that afflicts your development.
In 2005 an apartment was sold for 110k. It is now on the market for 79.5k. A financial catastrophe for the owner.
Michael
I am afraid the most serious issue is that well over a £100,000 alone has been spent on the roof which is only 16 years old and we still suffer concerns causing us anxiety about the still ongoing problems,also the wages cost of apartment rental and free service charges ,paid to a house manager that only works 31 hours a week for us residents at Arkle Court is we feel is extortionate!
As for sales of apartments your figures and facts are correct but we feel it is our duty to inform you and any other readers that recently one apartment was sold in the lower end of the 60.5k a catastrophe for our contingency fund savings.
We would also appreciate advice from anyone on the implications of a non residential house manager what would happen to the flat? And any other welcome advice relating to this change in live in or out full time or part time and any advantages or disadvantages to the residents?
Ged and Sandra,
I believe that you bought a flat under leasehold title and therefore you are the leaseholders. Fairhold Homes No.4 is the freeholder and owner of your block of flats.
I recommend that you buy a copy of the RICS Residential Management Code from RICS Bookshop Online and costing about 25 pounds. This book sets the standard of acceptable service charge management . Do you get a copy of the audited service charge accounts for each year ?
Was the roof covered by a 10 year NHBC guarantee which means any serious fault from poor workmanship should be sorted out by MacCarthy &Stone during years 0-10 ?.
Was the spending of £ 100K on roof repairs during years 10-16 ?
Ollie
We purchased our property in 2003 which was built by M&S in 2000 in good faith & trust like hundreds of other purchasers over the years and stupidly in our case without any homework or investigations about freehold the terms and knowledge about certain freeholders builders or the proffered service managers set up and put in charge at that time.
You obviously appear to know your facts but on purchase I had been diagnosed with a disability and had been approached with-what we believed to be a good a good offer outlook & investment for our retirement together that’s was our biggest mistake of this nightmare.
You advise me to purchase and read a book and enquire if we get copies of audited accounts each year I am a retired pensioner with a mobility disability who needed help and assistance and most of all trust and sincerity that’s why We purchased a supposedly maintenance free property.
We have and are in the process of compiling spread sheets of payments of accounts since purchased in 2003 and all the percentage increases
Roofing problems there costs and charges are present and been ongoing since opening and yes the NHBC its 10 year policy and guarantee was meaningless and worthless to our problems I once again repeat that most purchasers will at one point find these things out as spending on our roof has been constant between 2000-2016 and still ongoing!
The residents had to employ an independent surveyor equipment and report in 2004 out of their own pockets to prove the still ongoing faults ,and have also been advised and had to spend money from our contingency fund for work and repairs to the roof only 16 years of age,leaving this contingency fund low for future building improvements as stated by the FirstPort area manager at a recent meeting.
Service Managers seem to think the contingency fund is theirs not Freeholders or Residents!
Unbelievably M&S over 13 years of my writing challenging objecting and complaining to several and many directors offered what they call offers of Good Will as the roof is no longer their official responsibility yet “admitted fault to structure by workmanship and design.”!!!!
Do not mention RTM LVT or Courts because in a building of 56 apartments of elderly residents it is near impossible to get backing and to follow the rules regulations agreements and work necessary to beat or even contest against FairHold Homes No4 McCarthy & Stone or Peverel/FirstPort so we alone will continue with our campaign against these companies with bad publicity they fully deserve while we wait for all those companies I mentioned to offer a full investigation or enquiry my wife and I deserve after all the anxiety and stress caused to us by constantly writing about our problems and concerns over 13 years since purchase.
Ged and Sandra,
Although you may have mobility problems, you still have good thinking and writing ability. You should still seek assistance from your local MP to help make your complaints. You should look for support from other leaseholders in your block when making a complaint .
You asked about having a non-resident house manager and what happens to the HM flat?
In some other sites , the leaseholders were persuaded to vote for giving up the resident HM and given very little compensation after the freeholder sold off the flat.
In my opinion, If the house manager and associated HM flat was offered for the duration of the lease of 99 or 125 years, it is really communal property held for the benefit of the leaseholders and if sold, the entire proceeds should be passed into the service charge reserve fund for the benefit of the leaseholders. You should put this point to your local MP.
Ollie
Sorry to repeat myself but we have been down all avenues including as we have said in past articles contacting MPs local council,councillors, and other leaseholders over 13years but it appears to both of us that these companies have a hold or some sort of fear factor over government,councils and the media but we are young enough and brave enough to carry on with our campaign for a much needed enquiry through media publicity about ongoing and historic issues problems and concerns
Thanks for you information opinions and help concerning the HM flat it is of great help but why was a flat ever needed at our complex for a house manager when they are only employed for us 31hours a week.
Peverel/FirstPort have constantly stated in correspondence to us “We are not a care home”! we thank the Lord they are not.
Did you see the BBC evening news on Monday Jul11 and first speech by Theresa May after being confirmed future PM ?
She said ” We shall give people more control over their lives and that’s how we shall build a better Britain”..
Does this mean leaseholders can take control of their service charges ?
Ollie
We did catch the programme and watched and listened to our new PM Theresa May with interest.
But when she said “We shall give people more control over their lives and that’s how we shall build a better Britain” she never once mentioned the retirement resident freeholder stuck in his ever decreasing priced property, built by poor builders owned by oversea investors and managed by inherited proffered service managers chosen by poor builders Such as McCarthy & Stone and and all with unapproachable owners or representatives with these companies who forever break promises and statements or just refuse or ignore to answer your requests and questions to freeholders or residents.
All these retirement companies previously mentioned and most elected members of parliament don’t know or have any idea of what happens in one of these properties but luckily I have kept copies of all emails sent and received from past and present senior managers of these companies if and when any enquiry at our retirement complex is every announced.
We have had enough problems issues broken promise and statements mismanagement decisions made from directors regional managers and representatives from these companies over the last 12 months alone to write a book, never mind could we be allowed or to take control of our service charges, anyone could do a better and more professional job as service managers than Arkle Court Management Team who have represented and still are representing FirstPort/Peverel since built in only 2000.
Representatives wrote to Fairhold Homes and FirstPort on behalf of all leaseholders with a clear majority of over 75 % of residents thinking that a non residential house manager would be better for our complex.They also wrote “People have many reasons for this so we would invite you to come to Arkle Court and meet with us to discuss any implications good or bad that these arrangements could or would entail”Also due to past experiences many people have expressed a preference for a male house manager.This was sent to Louise Smith Property Management and Samantha Gibson regional manager FirstPort.
Reply from Louise Smith cut slightly short which reads
I have summarised the results below
56 Flats at Arkle Court
3.6% – 2 Leaseholders want to remain as a Residential Development Manager
75% – 42 Leaseholders want change to Non-Residental Development Manager
21.4% – 12 Leaseholder did not vote
I ommitted flat 1-53 as names do not correspond with the leaseholders information?
The next stage is for the Landlord to establish support for a change and will write shortly to all leaseholders enclosing a ballot form.If you have any questions please do not hesitate to contact me Louise Smith.
We the leaseholders have given a 75% return of names and signatures including No1 & No53 the 21.4% who did not vote are empty away or unavailable all we asked Louise Smith and Samantha Gibson was to represent owners and service managers to meet with the 78% available to discuss and debate advantages and disadvantages of a Residential or Non-Residential Manager as short and simple as that!
Samantha Gibson informs leaseholders she will wait for results and further information from the owners
So why extend waiting time by arrangeing another Ballot with the leaseholders when a simple meeting with these leaseholders and Ms Smith & Ms Gibson would suffice just to explain the Pros & Cons which might even save any Ballot or further correspondence or action needed.???
The 56 leasehold flats in your retirement block were sold with provision of resident house manager/ warden and the premium charged for lease by M&S included a flat for live in house manager. The buyers bought the flat with house manager/warden package under a 99 years or 125 years.lease and pay for the upkeep through the service charge account..The commitment to provide resident manager/warden is written into every lease. The lease terms is a legal contract and it cannot be changed by a ballot. or show of hands.
Now some of your leaseholders being still in good health want to change to daytime house manager only and have asked to change. But the lease contract commits the freeholder, Fairhold Homes No. 4 to provide this facility to every one of the 56 leaseholders and cannot change unless every one of the 56 agrees .
If there is a change to non-resident warden/house manager , the HM flat is communal property for unexpired term of 99 years or 125 years lease , and if flat is sold , the proceeds should go into the service charge account and not to the bank account of Fairhold Homes No.4 . Your representatives should fully understand this point..