September 17, 2021

Competition and Markets Authority issues update on leasehold study

… But it wants further feedback, so let them have it!

… Oh, and you are all happier than those in non-retirement flats!

CMAupdate1The Competition and Markets Authority (CMA) has today issued an update on its market study (see below) into the provision of residential property management services in England and Wales.

LKP / Campaign against retirement leasehold exploitation applauds this study and the work of those behind it. The CMA has understood many of the issues and does not seem to have been hoodwinked by the sector, its assorted trade bodies, hastily issued codes of practice, customer charters, PR blow-hards and similar.

It was very welcome that the CMA dismissed a favoured nonsense of the sector, including ARMA and the bilius Jeff Platt of the Institute of Residential Property Managers:

“… we found limited and mainly anecdotal evidence to support the allegation that non-trade-association property managers are responsible for the majority of problems that occur in the RPMS market.”

Platt, an apologist of the status quo, also promised to supply evidence to the CMA of bullying by right to manage activists in retirement developments.

That point does not seem to have seen light of day in the CMA report.

We will study this in depth, but there is an alarming reference for Campaign against retirement leasehold exploitation readers: those in retirement flats are more content with their lot than those in non-retirement sites, according to a poll the CMA ran.

In what will bring tears of joy to retirement housing managers and those philanthropists who have bought up retirement freeholds at auctions, the CMA reports:

“We noted that some concerns expressed at the outset of the study have not been supported by the evidence we have collected:

● We have considered whether residents of leasehold retirement properties may be particularly vulnerable to adverse outcomes, and whether the provision of specialist services could raise the potential for additional harmful practices (such as aspects of charging in relation to alarm and security systems or the provision of accommodation for on-site managers).

However, we received few complaints specific to retirement property issues, and according to our leaseholder survey, leaseholders in retirement properties had higher levels of satisfaction than other leaseholders with property management services.”

Campaign against retirement leasehold exploitation was a bit surprised when forewarned of this, but not unduly.

Only a minority in retirement housing have the will and capacity to understand the leasehold game – often played here by sophisticated corporate interests – and even fewer are in a position to do anything about it.

This means that when a retirement site opts for right to manage, something has usually gone spectacularly wrong.

There is plenty of evidence about retirement leasehold in the court records, the two OFT reports and Campaign against retirement leasehold exploitation itself, for the CMA to be going on with.

But you must ensure that your concerns are heard, so please do write to the CMA here:

propertymanagers.study@cma.gsi.gov.uk

The CMA study, which was launched in March 2014 by the CMA’s predecessor the Office of Fair Trading (OFT), is looking at whether the market is working well for leaseholders and whether there is effective competition in the sector.

Broadly, The CMA has identified a number of causes for concern about how the market works. Some leaseholders appear to suffer from a lack of control over aspects of property management, and may experience excessive or unnecessary charging for services arranged by property managers, poor service quality, insufficient transparency, poor communication and ineffective redress.

At the same time, other leaseholders are satisfied with their property management services and the CMA has found evidence to suggest that the existing checks and balances in the market can work well.

In light of this, the CMA has set out some views on possible remedial action to improve the performance of the market and secure better outcomes for leaseholders, on which it is seeking views.

Rachel Merelie, Senior Director of Delivery, said:

‘Whilst the market works well for some leaseholders, our emerging findings suggest that improvements may be needed in a number of areas. Given the broad range of issues we are
considering, we have decided to seek views at this stage on a range of possible remedies to the problems we have identified. This will help us to develop recommendations that are both effective and proportionate.’

All comments should be sent by September 19 2014 to:

Residential Property Management Services Study Competition and Markets Authority
Victoria House
37 Southampton Row
London,
WC1B 4AD

Email: propertymanagers.study@cma.gsi.gov.uk

The CMA will publish its full report by the end of 2014.

The update paper can be read in full here:

Update Paper August 2014

Comments

  1. Competition and Markets Authority for the Residential Property Market Sector.

    “… we found limited and mainly anecdotal evidence to support the allegation that non-trade-association property managers are responsible for the majority of problems that occur in the RPMS market.”

    This comment is not unusual, as most of what will be said, will depend on many factors:-
    A.
    1. age of the resident concerned and the capacity to understand what is going on

    2. age of development

    3. cooperate interests of main players freeholders/managing agents

    4. interest shown by the resident

    5. position of resident to do anything when problems occur

    6. are the residents even aware a problem has occurred

    7. care shown by Managing Agents staff

    8. type of work undertaken

    9. is there a residents association

    10. has there been any bullying by staff or residents

    I find this statement below difficult to take serious as how can this be judged taking into account the above questions that would also be relevant to any survey.

    ● We have considered whether residents of leasehold retirement properties may be particularly vulnerable to adverse outcomes, and whether the provision of specialist services could raise the potential for additional harmful practices (such as aspects of charging in relation to alarm and security systems or the provision of accommodation for on-site managers).
    However, we received few complaints specific to retirement property issues, and according to our leaseholder survey, leaseholders in retirement properties had higher levels of satisfaction than other leaseholders with property management services.”

    The items below are some of the headings of causes and concerns shown at Ashbrook Court SY6 6EW over the past 6 years.
    B.

    1 .specialist services requirements
    2. harmful practices that cost serious money
    3. property management complaints
    4. lack of control by leaseholders
    5. poor quality service
    6. poor and insufficient transparency
    7. unnecessary costs and charges
    8. accommodation house manager flat
    9. payments for council tax when empty
    10 .control over house managers spending
    11. insufficient openness and transparency
    12. use of none local contractors for contracts
    13. price fixing cartels
    14. insurance scams
    15. insurance commissions
    16 .mischarging invoices
    17. spending contingency money without consultation
    18. failure to control staff, carrying out audits and trial balances
    19. failure to provide full and factual information
    20. failure to check invoice files for accuracy
    21. lengthy and none effective complaints procedure
    22. none effective redress for complaints
    23. setting up residents associations
    24. right to manage procedures

    Ineffective Competitive Market not working well for Leaseholders

    The facts are there is an unfair ineffective competitive market. It can be seen by the many cases taken to LVT and now the FTT along with more and more going to the Small Claims Court.

    The fact that politicians are finally realising that the Retirement Industry has been high jacked by big business.

    The fact that the LVT, FTT have become the use only of the powerful landlords and large Managing Agents, where the tribunals were set up for the leaseholder to attain justice which has now changed..

    Very large Managing Agents/Freeholders are able to exploit the millions of residents as the economics of scale are used by these companies to work against us.

    The use of companies in the same group (subsidiaries – sister companies) to undertake contracts, whilst not been open and transparent making them uncompetitive.

    The use now of using external contractors for overseeing contracts where they were once carried out by the Area Managers or in house, (this after making all technical staff redundant) yet charging a full 10% plus VAT over the contract price for consultants.

    Managing Agents pushing elderly residents into paying by Credit if they want to pay by Direct Debit.

    Managing Agents failing to attend developments as per contract.

    It has been said that some leaseholders are satisfied with their Managing Agents and the service they provide is good. Statistics can be extrapolated to answers question, showing some Managing Agents, are of good quality and existing checks and balances can work well.

    Comments Please

    Posted by charles willis on 04 August 2014

    I think the statement from CMA that they found limited and mainly anecdotal evidence to support the allegation that non-trade-association property managers are rrsponsible for the majority of problems that occur in the RPMS sector may have been taken the wrong way.
    What i believe is meant by the CMA is that the trade bodies such as ARHM and ARMA have claimed that the majority of problems come from firms that are not members of ARHM or ARMA. It is this allegation (made by ARHM and ARMA) that has been found not to have any substance to it. ie the majority of problems do come from members of ARHM and ARMA.

    Posted by michael epstein on 05 August 2014

    reply

    YPO/Queries

    I have posted queries in the appropriate box on YPO, as previously.
    Receipt acknowledged by RGEA.
    Several weeks later, I still do not have ANY reply.
    Is this disregard new, or am alone in this?

    Posted by Peter Thomas on 04 August 2014

    reply

    Comment by Alex Ellison

    Alex Ellison says

    July 27, 2014 at 7:55 pm

    I would like to thank Campaign against retirement leasehold exploitation and LKP for reporting the issue of House Manager flats.

    Just over twelve months ago I, like many others, had been hoping that Peverel had put its past behaviour behind. Janet Entwistle proclaimed things were going to change and the ‘Questions for Janet’ website was set up. However, shortly afterwards Mere Court was encouraged to move to a visiting manager, and the rest of this sorry saga is summarised in the report above.

    It could be that the leases that have been created on the house managers’ flats at Mere Court and Ash Court in Knutsford are legal, but as the matter has never been tested and Peverel’s view remains that “the leases might be open to challenge, but no-one has done so yet” (Peter Whalley’s letter of 31.10.13 in the article), where does that leave the leaseholders?

    They have leases which stipulate their responsibilities for the HM flat. Peverel says the leases would not need to be changed, but why did it not inform the leaseholders of the changes that it had effected.

    Also, what happens if Peverel is no longer the managing agent but still holds the lease on the house manager’s flat and office? Mere Court is one of the original McCarthy and Stone retirement developments where no rent is payable for the HM flat. Would Peverel make the flat available to a resident manager who was from another company and still make it rent-free?

    And most importantly, we now know that Mere Court and Ash Court are not the only developments where this has happened. Janet Entwistle wrote to George Osborne – although never to the leaseholders at Mere Court who had sent a joint petition to her asking for urgent clarification as to who owned the flat , saying, “ In your most recent email to us, you asked about the £10,000 payment………. Such a payment is in line with how we approached this issue on similar occasions at our other developments”.

    I would like to thank Sebastian, Campaign against retirement leasehold exploitation and LKP.

    In times of self-doubt, of which there were many in the last year, not least because of the anxiety caused to my eighty-five year old mother, they gave me the courage to stand up and be counted. It would be helpful now, and in everyone’s interest, if Campaign against retirement leasehold exploitation and LKP could hear from the other developments that were invited to release their rights to the house manager’s flat.

    Alex Ellison

    charles willis says

    August 3, 2014 at 3:54 pm

    Well done Alex,
    Is the freeholder Proxima GR Properties Ltd? who were in the past a Peverel Company.

    From Duedil a Web Site which gives information about companies in Great Britain.

    Registered Names

    From Until Previous Name

    23/03/11 to Present
    Proxima GR Properties Ltd

    15/03/11 to 24/03/11
    Aztec GR Properties Ltd

    12/10/99 to 1503/11
    Peverel Properties Ltd

    2308/99 to 12/10/99
    Shelfco (No 1727) Ltd

    If you check the Invoice from Peverel Retirement for the Ground Rent paid twice a year, it is in very small print, does it say:

    Service/Management Fees are collected by Peverel Management Services Ltd on behalf of (who ever is owner/freeholder)

    Note on 14/03/2011 four companies known as the Peverel Group were placed into Administration?

    Posted by charles willis on 03 August 2014

    Sorry Alex,

    Should have checked closer, the correct date for Proxima, should have been:-

    24/03/11 to present not 23/03/11

    And Peverel Properties Ltd should have been:-

    12/10/99 to 15/03/11.

    I have checked further:-
    Aztec GR Properties Ltd and
    Peverel Properties Ltd were not part of the Consensus Business Group that was placed into Administration on 14/03/2011?

    What is strange is why did this company change name 9 days after changing from Peverel Properties Ltd?

    Then change again from Aztec GR properties, to Proxima GR Properties??

    on the day after the 4 Peverel Companies were placed in Administration?

    Posted by charles willis on 04 August 2014

    reply

    From LKP
    Posted on 02 August 2014

    Feedback
    Posted on 02 August 2014

    Update on property management sevi
    Posted on 01 August 2014

    Peverel Price Fixing and ARHM
    Posted on 01 August 2014

    Peverel Price Fixing and ARHM
    Posted on 01 August 2014

    Peveerel Price Fixing & ARHM
    Posted on 01 August 2014

    Annual Accounts
    Posted on 31 July 2014

    Annual accounts
    Posted on 31 July 2014

    House Managers Biohazard Protection
    Posted on 30 July 2014

    A ‘solitaire’ trip down memory lane
    Posted on 27 July 2014

    Scams
    Posted on 25 July 2014

    another scam?
    Posted on 23 July 2014

    Information Packs
    Posted on 22 July 2014

    Janet Entwistle Where is She
    Posted on 19 July 2014

    Campaign against retirement leasehold exploitation Meet MCCatrthy and Stone
    Posted on 18 July 2014

    Premium Credit & Fleeced
    Posted on 17 July 2014

    A New Director For OM
    Posted on 17 July 2014

    McCarthy & Stone Developments
    Posted on 16 July 2014

    Mistakes by Peverel
    Posted on 15 July 2014

    Relief For Peverel Residents In North London
    Posted on 12 July 2014

    Price Fixing Cont
    Posted on 10 July 2014

    About Peverel
    Posted on 09 July 2014

    Regional Manager
    Posted on 07 July 2014

    Lease Extensions ???
    Posted on 05 July 2014

    ARHM Breaks its SIlence regarding CirrusPeverel Price Fixing
    Posted on 04 July 2014

    View All Posts, Ever! (Could be a long page)

  2. Leasehold property are not in the interest of the people and it is time that the government stopped this practice in England & Wales Most properties in the UK have increased in value but the leasehold properties has plummeted Many residents are losing between 30 to 50 thousand on new leasehold properties If residents need to go into a nursing home the government will be expected to pickup the bill when such losses are made If these people had stayed in their own homes they would be in a much better position to fund their old age

  3. G Farley

    Not all Leasehold developments are plummeting, it is mostly ex McCarthy & Stone built since 2005/06 as they were 40% over priced?

    These developments were sold on to Fairhold Homes with a number i.e. (No 7) or (No 9) after being built and they used to use Peverel Retirement Ltd/Division as the Managing Agents?

    Peverel Retirement no longer have the contract as Managing Agents when the contracts came up for renewal?

    What a combination McCarthy & Stone and Peverel Retirement !