June 15, 2024

McCarthy and Stone makes ‘goodwill’ payment of £40,000 to Oak Court, but leaseholder drops article for LKP after phone call from the company’s lawyer

McCarthy and Stone has made a “goodwill” payment of £40,000 to Oak Court in Manchester which lacked fire compartmentation in the roof.

But a leaseholder at the site, which featured in BBC TV’s Rip-Off Britain last year, withdrew a submitted article to LKP addressing the issue after receiving a phone call from the company’s senior legal counsel. This call was made within hours of LKP contacting McCarthy and Stone to obtain an explanatory statement for the article.

The company denies that it urged the leaseholder to retract the article.

These matters have been raised in correspondence by LKP and copied to Sir Peter Bottomley and Justin Madders, the MP co-chairs of the All-Party Parliamentary Group on leasehold reform, and Paul Denton, the CEO of Homes England, as well as John Tonkiss, the CEO of McCarthy and Stone.

Oak Court, in Withington, Manchester, was built in 1994 and the freehold belongs to Vincent Tchenguiz’s Fairhold investment vehicle, which in turn appoints FirstPort to manage the site – as is widespread in older McCarthy and Stone sites.

The residents themselves became concerned about fire safety at the site, and a report was commissioned in May 2021 which described the risks as “tolerable”.

McCarthy and Stone in November 2022 informed LKP: “For background, and to understand the risk, FirstPort’s FRA [Fire Risk Assessment] for Oak Court in 2021 found the development and the loft areas to be ‘tolerable’, which is the second lowest of the nine fire risk ratings in the FRA. I believe you have the document, and the definition of tolerable in their FRA is: Tolerable (2) Given time, it is extremely unlikely that people could be seriously injured, although minor injury is a possibility.”

A subsequent inspection of the roof found “inadequate standards of compartmentation in the loft space”, which would require considerable expenditure to put right.

The issue appears to be similar to that at Cestrian Court in Chester-le-Street, Co Durham.

In September 2011 a fire at Gibson Court, in Hinchley Wood in Surrey, also built by McCarthy and Stone, burned down and resulted in the death of Irene Cockerton, 87, in September 2011. However, FirstPort pleaded guilty to failures concerning fire policies, procedures and training, and was fined £360,000 in April 2017.

With the leaseholders at Oak Court facing the prospect of an £80,000 bill, they contacted BBC TV’s Rip-Off Britain consumer programme in March 2022, which also included an interview with LKP chair Martin Boyd, who advised raising the issue with McCarthy and Stone’s CEO.

Oak Court also decided to go Right To Manage, employing Pauline Jones, of Jones Associates in Macclesfield, an LKP accredited managing agent who has turned Cheshire into the centre of retirement leasehold self-governance. RTM began in January of this year.

Initially, McCarthy and Stone offered to pay one third of the £80,000, suggesting that the other two thirds might be paid by the Tchenguiz-owned freeholder Fairhold and the long-term manager FirstPort.

This proposal did not meet with success.

On 28 March 2023 McCarthy and Stone increased its offer to £40,000, to be paid on completion of the fire stopping work.

McCarthy and Stone has informed LKP:

“[Oak Court] opened in 1994 with building regulation approval and since that date has been managed by FirstPort. FirstPort contacted McCarthy Stone in 2022 (whilst McCarthy Stone and the wider housebuilding industry were negotiating the developer remediation contract with the Department of Levelling Up Housing and Communities) noting that it had found an issue with fire stopping in the loft, which it rated as ‘tolerable’, the second lowest of nine ratings, and therefore presenting no immediate risk.

“We remain unsure why FirstPort did not identify this issue in the 28 years prior to 2022 and while the development was under its 10-year warranty. Given the time that has passed, we also remain unclear whether the issue in the roof space was a result of the original construction, wear and tear or a lack of maintenance. Our surveyor attended the development and was able to identify that fire stopping materials had been used in the original construction.

“Despite the development not qualifying for remediation under the Developer Remediation Contract (which was still under negotiation at the time) out of goodwill to the homeowners, and not because of any liability, McCarthy Stone decided to contribute £40,000 to cover half of the costs to remediate any issues with compartmentalisation in the roof space, and it was our request that the remainder be funded by FirstPort or the freeholder, rather than residents, given the lack of clarity around the maintenance of the scheme.

“We believe this was a fair offer to help the residents.”

LKP also asked “McCarthy Stone”, as it now prefers to term itself, to clarify to what degree it is distinct from the old McCarthy and Stone that built the bulk of the retirement sites before 2008.

The company spokesman explained:

“McCarthy Stone was established as a new business in 2009 following the global economic recession in 2008, which saw the old business of McCarthy & Stone enter administration. The new business has since opened 530 retirement communities across the UK and we remain as the landlord and managing agent for all of these schemes. This means we hold full operational accountability for these developments, and today we support more than 23,500 people mostly aged in their 80s. This includes 122 housing with care schemes where we deliver a range of care, support and property lifestyle services, including providing nearly 1 million meals a year and 500,000 hours of care and support a year.”

What this means is that while McCarthy Stone benefits from association with an established trade name, it may argue that it has no liability for sites built by its previous owners.

LKP comment

It is regrettable that a leaseholder at Oak Court had provided an article for publication with LKP – essentially a diary – subsequently to withdraw it following a telephone call from McCarthy Stone’s lawyer. This call was made within hours of LKP raising the issue with the company in order to provide a statement.

This statement was necessary as McCarthy Stone, as it now terms itself, needed to point out that it was “unclear whether the issue in the roof space was a result of the original construction, wear and tear or a lack of maintenance” and that its surveyor “was able to identify that fire stopping materials had been used in the original construction”.

No explanation has been offered why the lawyer decided to contact the leaseholder within hours of LKP raising the issue.

The episode was particularly regrettable because McCarthy Stone is the only entity involved in Oak Court that felt any sense of responsibility for the fire safety failings, and did pay out £40,000. The leaseholders say neither FirstPort nor Fairhold have paid anything at all, even though they have been responsible for this site for years.

So a rather positive narrative for McCarthy Stone became a tainted one, quite unnecessarily.

Below are the resale values on the Land Registry for Oak Court:

Flat 1, Oak Court, 1 Mauldeth Road, Manchester, M20 4NE

Transaction history

A 2016-12-02 £45,000

A 2002-03-14 £49,000

A 1996-01-26 £53,500

Flat 10, Oak Court

A 2013-11-08 £60,000

Flat 11, Oak Court

A 2018-09-21 £60,000

A 2017-05-26 £57,500

A 2012-06-01 £54,000

Flat 12, Oak Court

A 1997-02-28 £61,500

Flat 14, Oak Court

A 2019-07-11 £63,950

Flat 15, Oak Court

A 2016-05-31 £58,500

A 1995-01-30 £49,000

Flat 16, Oak Court

A 2018-03-02 £75,000

A 2004-06-21 £92,500

Flat 17, Oak Court

A 2018-08-20 £47,000

A 1995-05-26 £49,500

Flat 18, Oak Court

A 2015-08-13 £50,000

A 2010-06-28 £77,950

A 1999-10-22 £45,000

Flat 19, Oak Court

A 2020-11-03 £58,000

A 1997-01-24 £49,950

Flat 2, Oak Court

A 2016-11-07 £59,000

Flat 20, Oak Court

A 2014-03-28 £48,000

A 2007-03-16 £87,000

Flat 21, Oak Court

A 1997-02-21 £57,950

Flat 22, Oak Court

A 2016-10-07 £72,000

A 2010-03-30 £99,950

A 2000-04-12 £60,000

Flat 23, Oak Court

A 2001-05-09 £45,000

Flat 24, Oak Court

A 1998-04-24 £59,000

Flat 25, Oak Court

A 2017-09-08 £65,000

A 2014-04-25 £65,000

Flat 26, Oak Court

A 2003-07-29 £68,000

Flat 27, Oak Court

A 2010-10-29 £70,000

Flat 28, Oak Court

A 2018-05-30 £58,950

A 2003-08-06 £68,000

A 2002-04-11 £43,500

Flat 29, Oak Court

A 2009-06-15 £88,000

A 1995-01-16 £57,500

Flat 3, Oak Court

A 2022-11-28 £60,000

A 2018-07-12 £68,000

A 1996-11-15 £42,000

Flat 30, Oak Court

A 2004-05-05 £92,500

A 1995-04-28 £49,500

Flat 31, Oak Court

A 2023-08-01 £58,000

A 2017-04-18 £53,000

A 1995-02-24 £56,500

Flat 33, Oak Court

B 2016-03-15 £38,000

B 2015-11-30 £23,500

A 2006-02-24 £83,000

Flat 34, Oak Court

A 2019-12-20 £78,500

A 2017-09-22 £69,950

A 1996-12-20 £50,950

Flat 35, Oak Court

A 2016-12-07 £63,000

A 2004-09-01 £110,000

A 1998-03-24 £52,700

Flat 36, Oak Court

A 2019-09-16 £54,500

A 1999-03-05 £40,000

Flat 37, Oak Court

A 2017-03-27 £75,000

A 2011-12-02 £80,000

Flat 38, Oak Court

A 2018-09-21 £67,500

A 2002-04-19 £73,000

A 2000-12-13 £71,000

Flat 39, Oak Court

A 2021-09-01 £51,000

A 2004-04-22 £89,950

Flat 4, Oak Court

A 2016-04-22 £56,000

A 2010-03-26 £45,000

Flat 5, Oak Court

A 2012-08-03 £59,950

Flat 6, Oak Court

A 2012-07-02 £66,000

A 2004-05-21 £120,000

Flat 7, Oak Court

A 2001-09-28 £41,000

Flat 8, Oak Court

A 2001-03-29 £60,000

A 1995-03-24 £69,000

Flat 9, Oak Court

A 2020-02-17 £69,000

A 2014-12-17 £55,000

A 2000-06-23 £41,000

11, Oak Court

A 1999-11-05 £45,000