Residents face demands from Anchor Trust for more money for the contingency fund. But perhaps they should be asking for some back instead
Godman’s Court, a retirement site run by Anchor Trust near Horsham in Sussex, is in a state of indignation over a demand for more money.
They have been presented with a demand for a 30 year projection of works, which means contributions to the contingency fund must increase.
Residents in 21 flats face a demand of £50 a month more, or a 25 per cent increase.
In addition, they have a long shopping list of projected works, which should be shared with the wider Campaign against retirement leasehold exploitation community for scrutiny and comment (below).
Anchor Trust’s shopping list at Godman’s Court
Contingency funds and Anchor Trust are not an entirely happy combination.
Anchor Trust is, of course, the housing association notorious for paying its former chief executive John Belcher a ludicrous salary of £391,000. By a long margin this was the highest salary in for a housing association chief and his successor comfortably tops the pay league.
To ease the burden of the Belcher payola, Anchor Trust helped itself to the proceeds of the interest on the £10 million reserve funds, which it held in trust for the residents.
It even spent £5,000 asking lawyers whether this was lawful.
Anchor Trust was told it wasn’t. In fact, it only tardily stopped helping itself to a one per cent admin fee on these funds, which was reported in the Mail on Sunday in February 2011.
The full Anchor Trust email trail on this, and the legal report by Anthony Collins Solicitors in Birmingham is made available here.
Rather than tapping residents for contingency fund contributions, it would appear that Anchor Trust should consider handing some back.
After all, one email from a (redacted) Anchor Trust executive of August 22 2007 reads:
“Residents enjoy an interest rate equivalent to 4.5% (base rate 5.5%) whereas some of Anchor’s investments enjoy a significantly higher sum.”
Anchorresidentthinkssheisbeingrippedoff
Legal report on the position of AG trust funds – back up
Anchor – Management of sinking funds
Related posts:
Fury at Anchor Trust allowing sub-letting as retirement leasehold market turns sour
Anchor Trust apology: ‘we do not seek to profit from contingency funds’
More sites rebel against Anchor Retirement allowing sub-letting … in defiance of leases that ban it
Surge in right to manage interest after trust in Peverel evaporates
Hi
The calculation looks extremely spurious to me …
Certainly the IBRD would not accept that format before committing funds.
Noted that they use INFLATION RELATED Costs – so meaning that the amount to pay NOW is hugely increased ….
Five years is a reasonable period forward … TEN years MAX
Happy Days
Well no, costing over the longer period is correct as otherwise you are not setting aside sums, nor warning owners of possible expenses which occur less frequently and outside a 10 year cycle.
The first question is of the lease covers all these items and if the reserves call for a provision. RTM might not change the fact that some provision has to be made, and they might better first spend money on professional advice on the need and amount of provision. The second then is this issue that I have raised of treasury management, skimming off interest on trust funds, which under the 61 Act they should not do. The secnd question is then if RTm is out of the questin to ask the FTT to determine a fair and reaonable sum using their own professional advice above. I’d throw in the issue of interest asa ruling on that would be useful for all.
Totally ignoring the costs that Anchor have come up with, AM is definitely correct.
Costing over longer periods is correct and necessary to maintain the building, and ensure the correct contribution from all residents, past, present and future.
I always say the first 20 years management of a new complex is easy. The skill is getting the earlier years income/budgets balanced to cover the second 20/30 year span. If you get it somewhere near right you should not have to ask residents to stump up lump sums of money every so often.
As a previous Stock Condition Surveyor for the Private Sector and Public Sector, this seems to be a bridge to far?
Whilst 5 years is a necessity for future planning and 10 years can be acceptable, depending on the age it is now?
The purpose built development was built in 1988 and it should of been built to a very high standard.
My concern would be the cost for the:-
Fire Alarm 10,117
Door Entry Service 11,858
Warden Call Service 16,708
Emergency Lighting 6,237
Fire Risk Assessment 19,237
These total over £64,000 in the first year, and to cost £19,237 for a Fire Risk Assessment is what can only be seen as a massive error or the wrong heading???
The works may need to be undertaken but are the works the minimum required or are they the top of the range, where possible commissions are available???
Has Peverel/Cirrus anything to do with Anchor Tust???
That’s why I said in my comment that I would NOT be taking costs quoted into account, but agree with AM “costing over the longer period is correct as otherwise you are not setting aside sums, nor warning owners of possible expenses which occur less frequently and outside a 10 year cycle”. Obviously costs need to be correct and the work actually requires doing – that is the skill of a good managing agent and totally satisfied customers (residents)