By Dan Healey, director of the Woodlands Court RTM, addressed the All Party Parliamentary Group on leasehold and commonhold reform on 27 March 2023. He made a passionate plea for retirement sites to opt for right to manage and so employ managing agents accountable to the leaseholders who do the paying

Right to Manage – The Road to Independence

My name is Dan Healy. I am a Director of the Woodlands Court, Alderley Edge RTM Company. I retired as a Chartered Civil Engineer and a Chartered Member of the Institution of Environmental Management in Engineering Consultancy in 2015. I have had 40 years’ experience with major engineering companies, both overseas and in the UK, covering the planning, design, procurement, financial control, construction and commissioning of both minor and major infrastructure projects.

• Had I not had a commercial background and an interest in the way the development was being managed (as well as assistance from a fellow resident with an accounting background) the outcome to this story may have been very different. 

• Had I known prior to purchase, what I know now about Leasehold Retirement Developments and Management Agencies like Peveril [renamed FirstPort after the Cirrus scandal], I would not consider buying a leasehold retirement property and I wouldn’t be sitting here today. 

This begs the question; what happens to those Retirement Schemes that are not so fortunate? How many elderly and vulnerable leaseholders are still being financially disadvantaged, ignored and lied to by unscrupulous MA’s?

I have been invited to speak about Right to Manage and why the residents of Woodlands Court started on this journey back in 2018. As you know, the Right To Manage (“RTM) was introduced to give leaseholders the ability to take over the landlord’s management functions in respect of their building, without having to buy the freehold. It is a “no-fault” right, which leaseholders can exercise without the need to prove a complaint against their landlord or managing agent.

You will hear about our experience of being managed by Firstport Retirement (FP) and our findings from just 20 months of investigations into their management style including their contractors AHR Building Surveyors, Aston Environmental Services and Firstport Surveying Services. Just as importantly, you will hear about the lack of support from organisations which are there to uphold standards like the Royal Institution of Chartered Surveyors (RICS) and The Property Ombudsman.

It was some 3 years after I retired, in April 2018, when I realised that something was seriously amiss with some of the charges applied to Woodlands’ Contingency Fund. After reading the Section 20 Estimates for Fire Detection Works, I knew straight away we were being charged for items that were not required but were implied as statutory requirements by FP. I was appalled at this attempt to deliberately charge us for unnecessary works; from this point I took it as my mission to challenge FP on recently completely works and on virtually every aspect of their management service until we achieved RTM in June 2019.

Fortunately, my ‘fellow Leaseholder in crime’ was able to obtain copies of bank statements and together we were able to identify areas where we may have been overcharged for services. We used a two-pronged approach; I scrutinised every item of work proposed by FP and their Contractors based on need and cost, and my leasehold partner scrutinised the accounts.

Our first mission was to stop the proposed Fire Detection works which to our mind was approached in a duplicitous manner, and secondly to educate ourselves on Leasehold regulations.

We used the Leasehold Advisory Service, LKP site, activist web sites and the Association of Retirement Housing Management (ARHM) Code of Practise to help us determine principles of good management, correct procedures and behaviours, and how to rid ourselves of FP.

Hearing of similar stories up and down the country; we soon realised RTM was our only option. The consequences of not moving to RTM were stark – FP could completely deplete our Contingency Fund and we would then have to deal with substantially increased service charges.

In other words, we could be subject to nothing short of ‘Legalised Mugging’!

Effectively a lack of regulation allows unscrupulous MAs to use the system to overcharge leaseholders for services and works, in particular elderly and vulnerable leaseholders and in doing so, line their own pockets.

It also meant we did not have powers to take them to a criminal court. I and many others in the same situation, were convinced that some of FP’s actions against us could be described as fraud.

Myself, and my fellow leaseholders often dreaded the next opportunity for FP to raid our Contingency Fund, charging for work where no ‘Need’ had been established and or the proposed works by their Contractors would not be ‘fit for purpose or defective’. I must admit that at times, we felt helpless, like lambs to the slaughter.

By gathering robust information highlighting the discrepancies in procurement and charging practises we were quickly able to gain the trust of virtually every leaseholder at Woodlands Court, we were able to lead a rebellion against FP and to start promoting the potential benefits of RTM. (For a list of selected failures of FP and their contractors , see Appendix 1).
As well as specifically promoting RTM, I made sure that all Woodlands’ leaseholders were made aware of FP’s shortcomings in legal, technical and financial services. I did this by making sure that:

• I copied in Leaseholders to emails challenging FP’s on everything from their lack of communication, failure to comply with regulations and their tendering procedure – residents soon picked up that FP were not responding to me and ignoring us. 

• I demonstrated that FP were not treating us with respect, honesty, or with integrity.  

• They were failing to comply with legal requirements and did not act with transparency.  

• They were taking financial advantage of vulnerable and elderly Leaseholders.

• Regular meetings were held with our Leaseholders and Family members.

Our managing Agent was clearly a risk to our health, wellbeing and pockets.
Having gained the trust of Leaseholders and my newly acquired knowledge of Leasehold, I arranged for a Leasehold Advisory Service expert to give us a talk on our options. It was clear that RTM was the only way to go. I reviewed prospective local/ regional MAs to take us though the RTM process, we then selected two MAs to make presentations, submit their written replies to a series of questions we had issued and to respond to Leaseholder queries during their presentations.

The locally based Jones Associates (JA) were then selected by the Leaseholders to take us through the RTM process and then continue as our MA. Leaseholders agreed a fee of £5.5k to fund JA to undertake the process, not an inconsiderable sum for a small development but it was the best £5k we have ever spent. The RTM process supported by JA went smoothly, it certainly helped having 95% of Leaseholders in support. How long did it take – well 9 months from start to finish for a straight forward process. We did not have any of the usual delaying tactics from FP, I think they realised that they were history.

We did encounter one stumbling block, as we were about to formally commence the RTM procedure, at the request of JA, the Leaseholders collectively approached our Landlord/Freeholder to formally dismiss FP as our MA. They refused and I am sure the likes of McCarthy & Stone would react the same way. We were advised by the Landlord that FP would now act in a proper manner or words to that effect. It only took 2 weeks for them to revert to type and by this time we were already well on the way to becoming a RTM company.

As Leaseholders, we felt thwarted at every turn; in particular we were badly let down by RICS and The Property Ombudsman and this is probably the case for many other leasehold developments who have gone down the same route or are battling for justice against unscrupulous MA’s. It seems to me and from the experience at Woodlands; RTM is the only option open to Leaseholders to ensure a more carefree and healthy retirement.

The benefits of RTM were immense. We had a MA who cared about our well-being, treated us with honesty and respect, listened to what we had to say. At a basic level we were happy, we could look forward to retirement without the spectre of our savings being severely depleted.

Jones Associates were comfortable in regularly addressing the Leaseholders collectively, both informally and formally. They dealt promptly with any emergencies at the development, we felt secure, and really nothing was too much trouble for them to handle.

Jones Associates provided positive tangible human and social interactions for us. They also managed the procurement of practical improvements to the Development to safeguard H&S matters and building improvements. Soon after they took over Covid hit, but that was managed effectively with the health of Leaseholders being at the forefront of their actions.

It is nearly three years since they took over and we have had; new warden call system with a linked smoke detection system in our homes, new Fire Panel, new Lift control panel and electrics, resolved the issue for replacement of our double-glazed windows, undertook external decoration to the Conservatory and Entrance Lobby, provided a more cost effective Laundry system, improved the emergency lighting, managed a programme of tree surgery that was desperately required, replaced defective roof guttering, and are now planning for the Residents Lounge redecoration.

We have had all these improvements, yet we still have a healthy balance in our Contingency Fund.

Of course, we do have differences of opinion, but they are resolved in an amiable manner and always in accordance with the Lease.

Having achieved RTM, my reflections turned to the complete lack of support we received from RICS and The Property Ombudsman. We had exhausted the FP Complaints procedures. We thought it was a farce, a whitewash, but we had such a wealth of evidence against FP, we expected RICS and the Property Ombudsman to see that they were not achieving even minimum standards in terms of best practice. We were bitterly disappointed with both bodies on the outcomes of our formal complaints to them. Perhaps we should ask – why did they appear reluctant to take action against FP and AHR? Was it a case of self-interest? Clearly professional bodies receive fees from companies like FP.

It is extremely tough for Leaseholders in Retirement Developments to go RTM when they do not have colleagues with the knowledge, skill, determination, tenacity and good health to face up to the likes of FP and their Contractors.

How can Government help Retirement Developments? I agree with the findings of the Law Commission (2020) in particular the recommendations to:

• Introduce reform and legislation to make the RTM process simpler and expand the scope of Leasehold properties, particularly for Retirement Developments, for RTM eligibility.   

• reduce the costs of making an RTM claim, and give leaseholders more control over those costs

• make the process of claiming the RTM less complicated and less likely to be frustrated because of small procedural errors.

It might be controversial but I also think that legislation should be introduced such that that the excesses of Directors / Senior Managers of MAs and Contractors can as individuals face criminal charges, be prosecuted and receive custodial sentences.

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