November 11, 2019

Campaign against retirement leasehold exploitation: What we want

 

Campaign against retirement leasehold exploitationsign-upCharityCommissionpicThe Campaign Against Retirement Leasehold Exploitation (Campaign against retirement leasehold exploitation) exists to protect the elderly in leasehold flats and to help create a fair and healthy retirement housing market.

It is part of the wider Leasehold Knowledge Partnership, which is a registered charity (registration above).

Retirement leasehold is a sector with a poor reputation that has been the subject of critical tribunal rulings, two investigations by the Office of Fair Trading and debated in Parliament.

That there is a problem is not disputed by impartial observers, although retirement housebuilders’ do their best to minimise the issues. Their lobbying reaches deep into government and the opposition, and they fund dubious think tank “research”.

Put simply, it is scandalous that the most vulnerable in our society have been beset by sneaky and dishonest fees widespread in leasehold, or systematically cheated, as the OFT established in the Peverel / Cirrus collusive tendering scandal.

It must be concerning that retirement leasehold flats can be the single worst residential property investment one can make in the UK. Prices plummet to a degree that is not matched by the local housing market.

Understandably, trust in the sector is eroded.

This is an entirely self-inflicted wound by the retirement housebuilders and the management companies that they employ.

Developers have introduced sneaky revenue-earning clauses in the leases, such as the exit fees and high, multiplying ground rents; and later flogged the freeholds off to monetising opportunists.

Then there are the questionable and unlawful revenues: the opaque management charges; the repeated employment of affiliated service companies; and, perhaps most serious of all, the alienating of communal assets such as the house managers’ flats.

These are either sold off, or given ludicrous valuations and borrowed against, generating millions through “financial engineering”.

Do we really want the freeholds of our housing for the elderly to be assets bartered and exchanged by corporate figures determined to monetise them?

Campaign against retirement leasehold exploitation’s views on this sector and those of AgeUK are virtually identical.

But the picture in retirement housing is not all bad. The sector is varied, and there are some excellent operators.

Campaign against retirement leasehold exploitation is delighted that new overseas companies are moving into the market, and that care providers are producing housing solutions. This has introduced new blood and a welcome change of culture compared with the British retirement housebuilders toshing out what they term “granny flats”.

The new trade body ARCO (Association of Retirement Care Operators) seems very promising.

Campaign against retirement leasehold exploitation is greatly impressed with Retirement Security Limited, founded by Bob Bessell, the former head of Warwickshire social services, who actually lives in a flat on one of his sites.

All his 3,500 flats have a residents’ management company stated in the lease. So if the residents want to change the management that they employ, they can do so whenever they choose.

This is a fundamentally different approach to the mass retirement house builders, who will not concede the power that they have over their residents.

Or consider the case of Elim Court, in Plymouth, whose right to manage application is heading for the Court of Appeal.

The freeholder will not give up the management of this site.

It would be very welcome if operators in the sector spoke out about these issues, rather than agreeing with Campaign against retirement leasehold exploitation in private.

The only organisation that publicly shares our views is AgeUK. We welcome such an important ally, but could do with others.

Campaign against retirement leasehold exploitation aims to improve this sector and, with our umbrella organisation the Leasehold Knowledge Partnership, seeks to make reforms to residential leasehold law.

We assist with individual problems and provide an editorial service of the sector, which aims to be accurate and fair.

Donations to Campaign against retirement leasehold exploitation are welcome, and should be made out to ‘Leasehold Knowledge Partnership’:

Santander,
PO Box 383,
21 Prescott Street,
London E1 8RP.

Campaign against retirement leasehold exploitation can be contacted at:
sok@leaseholdknowledge.com
Or:
07808 328 230
Sebastian O’Kelly

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