At the Campaign against retirement leasehold exploitation / LKP roundtable at Westminster yesterday there were a couple of interesting questions from attendees.
One gentleman asked: “I own a portfolio of [50] retirement properties. Most are in sites that were built by McCarthy and Stone and are managed by FirstPort formerly Peverel formerly etc …
“In almost all these cases Peverel and FirstPort have managed these operations since they were built. That is something like 30 years.
“I challenge anyone to think of any other business relationship that has gone on for 30 years and has never been subject to price competition and never been put out to tender, and which just goes on its merry way.
“In the very few examples where we have successfully got rid of Peverel / FirstPort there’s being a saving of about 10 per cent in the service charge every year. [Others report 20 per cent]
“This service charges go up and up, but Peverel / FirstPort is very rarely challenged. Why? Because the residents in these properties just want a quiet life and do not want to have residents’ associations involved in challenging costs.
“If I said to you that in the 30 or so developments where I have flats, one or is it two have actually got a residents’ association. It is something like that.
“Peverel / FirstPort continue to charge ridiculous service charges. Surely, the solution here that has been adopted elsewhere in other areas is to pass legislation for compulsory tenders of the management of retirement sites, say, every five years.
“I’m looking at MPs and members of the House of Lords here. Come on guys, can we have some legislation to achieve that please? It would help create competition and reduced costs.
The chairman of the roundtable, Martin Boyd, a trustee of LKP / Campaign against retirement leasehold exploitation, replied that it was one of the provisional proposals of the Competition and Markets Authority report into leaseold.
“But my understanding is that it was felt that more investigation was needed in that matter before it should come forward as legislation.”
The questioner asked: “So, they were got at by Peverel, were they?”
[Laughter.]Another question which got a very short reply was perhaps related to the articles on LKP:
“Could I ask what the situation is with regard to the chairman of LEASE?”
“No,” replied Sir Peter Bottomley.
Different figures are banded about concerning the savings that can be made after dismissing Peverel/Firstport. Some say 10%,some say 20% and others claim 30%.
In truth it depends on the circumstances of the development.
For example some developments have fallen into decay due to lack of maintenance and this situation has to be rectified by an incoming managing agent.
Some developments have their service charge trusts in deficit as many residents refused to pay due to lack of service or accountability.
Other developments may simply have had money wrongly taken from them. On handover many developments have identified a shortfall in the accounts which has been put down to an administrative error.
Once a RTM has taken place, the scope for savings is great. No need for 40% insurance commissions. No need for unnecessary replacement works. No need to pay such high prices for utilities so that Peverel/Firstport can hang on to an enhanced rebate. No need to finance Peverel/Firstport debts. No need for unsightly advertising boards for Retirement Homesearch despoiling your building .
Considerable savings then would be made by a RTM. Additionally, it should be noted that property values are greater in non Peverel/Firstport managed developments.
We got rid of Peverel at my development. Service charges had to go up 20% and have stayed up ever since. We are still working our way through a catalogue of things we need to do to address years of gross neglect of the infrastructure of our development to restore it to the condition it should be in. We will be able to reduce service charges eventually, below what we paid back in the days of Peverel and its endless conflicts of interest.
There is only one word to describe Peverel/Firstport and, indeed, the whole business of leasehold with its endless opportunities for conflict of interest: Evil.
Knowing what I know now I would never under any circumstances buy a property managed by these people. They are predators preying on the vulnerable, the ignorant and the disadvantaged. Seeing off these wolves has been worthwhile but it has come at a cost we should not have had to pay, above all in terms of our time and energy.
Some day this torture will end. It is grotesque that this evil cannot be ended quickly, but when it finally happens we will surely see people coming out of the woodwork looking to associate themselves with LKP and claiming to have supported leasehold reform all along.
And Campaign against retirement leasehold exploitation, of course!
And About Peverel, of course!
It is not just companies such as Peverel/Firstport that is evil, far worse in my opinion are the trade self regularity bodies such as ARMA,and ARHM, who readily give a veneer of respectability to these companies that greatly assist them to carry on fleecing vulnerable people.
If I am going to be fleeced, then I prefer it to be by an ARMA or ARHM approved company.
At least I would know that the fleecing is being carried out in accordance with their regulations.