December 8, 2022

No more retirements flats until leasehold rip-offs are ended

Norman Greed

Norman Greed, a veteran of a right to manage dispute and winning back unfair service charges, says no more retirement flats should be built under the rip-off leasehold system

Once again the leaseholders of England and Wales have been let down by the legal system.

In this article I will cover three items I wish to highlight.

The most recent one in the Telegraph referred to building £1 billion worth of retirement homes to be built by McCarthy and Stone, which seemed to have the blessing of the government. Not one penny should be spent or one brick laid until the Leasehold and Common hold Reform Act 2002 is enforced, and Leasehold abolished.

The leasehold laws as they stand are a legal means for landlords, investment companies and management companies to extract money in the form of ground rents and service charges from the elderly.

I refer to the law as legal, because at two Leasehold Valuation Tribunals cases I have filed I had costs warded against use. The first one, CHI/OOHC/LSC/2007/0108I won a large refund on the house managers flat, but we had to pay £3,000 of the defendant’s barrister’s costs. The residents felt that they should not have to pay costs; in fact one resident thought I should personally pay it out of my own pocket. I spent many hours talking to and writing letters to different government departments to reclaim the costs without success, We finally took the LVT chairman’s advise the (chairman who had awarded the costs against use in the first place) to file a new case, CHI/OHC/LIS/2009/0030. To my surprise we were allocated the same chairman.

At the pre–hearing the chairman stated that both parties must exchange statements, the Respondent within 28 days (25th June 2009) and the Applicant by the 16th July 2009, we sent ours long before 16th July, the Respondent withheld theirs until the day of the hearing, when asked by the chairman why he filed late the barrister replied that he had been on holiday, this excuse was accepted by the chairman, after an old boys telling off. We have found out from other hearing that this particular barrister filed late as part of their defence.

The chairman then allowed the barrister to open the hearing by rambling on with his Latin legal terminology for two hours trying to convince the chairman that the case should be struck out, as he had already made his decision at the first hearing.

The chairman in his summing up stated (In the light of the Tribunal’s findings the Tribunal decided that it would be just and equitable for the Respondent to be able to recoup their costs, which had been quoted as amounting to £9,000. This made the total amount of legal costs charged against the Applicant of £12,000 to get a reduction in the House Managers flat rent reduced from £20,000 to £10,000, which was, and still is twice what it should be for this area.

After this second LVT it proved to the residents that we should apply for the Right to Manage (RTM). On the 2nd January 2010 we were successful in obtaining RTM and we have been very successfully managed since.

On obtaining RTM it became quit obvious that we had been over charged by the Management Company/Landlord to the extent of £10,000 on excess Insurance Commission. We decided that after the results we received at the LVT, we had lost all confidence in getting a fair hearing, so we proceeded to take the, Landlord/Management Company/Insurance Broker to the Small claims using MCOL (Money Claim on Line) after an hour of mediation, we settled out of court for £5000.

In 2014 our Management Company contracted a qualified Electrical Company to inspect the development to fulfil their responsibilities for our health safety and obtain a Compliance Certificate. To obtain this certificate over £800 of work, for major faults had to be completed before they would issue a certificate. These major faults should have been done before 2009 and before the Certificate of Compliance was issued. When the solicitor for the Management was approached, he said that we did not have a case as the (RTM) was not in existence in 2009.

We tried over a number of weeks to reason with the Management Company without success, so we filed a Small Claims, using

(MCOL) Money Claim on Line, expecting it to take same course as my previous Small Claim, But NO! After first agreeing to Mediation they withdrew and wrote saying, not only were they withdrawing from Mediations, but had applied for the case to be Struck out and if they were successful expect us to pay over £900 of their costs.

At the Small Claims hearing, the judge went to lengths to explain that we could not claim as a (RTM), but that each individual flat owner should employ a solicitor and file separately (79 flats).

In the judges summing up she advised us not to take the claim further, and that she would NOT award cost to the Claimant as she felt that the claim was not vexatious.

I have tried to highlight a few facts. The main one, if you don’t like being ripped off, is to read the comments on LKP, Campaign against retirement leasehold exploitation and About Peverel, and before taking any major steps, do your homework and the best legal team you can afford. Landlords and management companies are having a field day with the support of the government.

Comments

  1. Good to hear from you, Norman!
    You are to be commended for your tenacity in challenging these crooks, and finally breaking free with RTM. I, too, have used the Small Claims Court – in my case, for the Exit Fee. Fairhold’s barrister tried to frighten me with the threat of costs (rejected by the Court). And pulled the same stunt of producing their defence at the last minute. As I represented myself, perhaps it’s no surprise I lost the case. But had the satisfaction of the look on the barrister’s face when he was denied £10,000 costs.
    The Law Commission is now inviting submissions to their consultation on what they call ‘Event Fees’ (details below). I will certainly be commenting on these pernicious fees. As long as leasehold is still with us, we should all take this opportunity to try and get some improvement under the current rules.

    Today (29th October) the Law Commission publishes a consultation paper on Residential Leases: Fees on Transfer of Title, Change of Occupancy and Other Events.

    Leases of retirement flats and bungalows often include a fee triggered by certain events, such as when the owner sells or sub-lets their property. These “event fees” are typically set at around 1% of the property sale price but can be as high as 30%.

    Event fees can be a practical way of making retirement flats affordable, particularly for older people with low incomes, because they can defer the costs until after they leave. But owners and their families are often neither told about the fees until after they have agreed to buy the property, nor prepared for the potentially high price.

    In a consultation opening today the Law Commission looks at what can be done to protect consumers from unexpected leasehold event fees (which include varieties such as “transfer”, “contingency”, “deferred-management” and “selling-service” fees). The Commission asks:

    – should developers, landlords and managing agents of retirement flats do more to make potential buyers aware of event fees at an early stage,

    – should this obligation be extended to estate agents, and

    – how far could this be achieved through industry codes of practice?

    The Commission provisionally proposes measures that developers, landlords and managing agents might take to make event fees more transparent, and asks whether the courts’ power to strike down unfair fees should be strengthened.

    The consultation paper can be accessed by clicking this link: http://www.lawcom.gov.uk/wp-content/uploads/2015/10/cp226_residential_leases.pdf There is also a summary available http://www.lawcom.gov.uk/wp-content/uploads/2015/10/cp226_summary.pdf and a response form http://www.lawcom.gov.uk/wp-content/uploads/2015/10/cp226_response-form.doc For more information, please visit the project web page: http://www.lawcom.gov.uk/project/transfer-of-title-and-change-of-occupancy-fees-in-leaseholds/

    Please note, we seek responses by 29 January 2016.

    Max Marenbon | Law Commission
    Research assistant | Commercial and Common Law Team
    1st Floor, Tower, Post Point 1.53
    52 Queen Anne’s Gate, London SW1H 9AG
    (access via 102 Petty France)
    Tel: 020 3334 3603 | Fax: 020 3334 0201 | Web: http://www.lawcom.gov.uk
    Email: event_fees@lawcommission.gsi.gov.uk

  2. Well done Norman another nail in the coffin of Leasehold.

    Having read notes taken at the court case mentioned, Chaired by Mr Andrew Gregg, where the Peverel Respondent was Ian Rapley, he who said Leaseholders were “Dribbling Geriatrics”?

    You as the Applicant won the case against Peverel and had the rent reduced by 50% yet you were not allowed to be awarded any costs???

    Peverel who lost the case was awarded £9,000.00 in costs.

    Is this a true fact?

    Was this not an ABUSE OF THE SYSTEM?

    • 5.52 pm From House of Commons 04/11/15

      Jim Fitzpatrick (Poplar and Limehouse) (Lab): I am delighted to follow the hon. Member for South Norfolk (Mr Bacon). Housing is the biggest issue in my constituency, as it is in many others. I want to focus on two points. First, I shall deal with the elements that I believe to be missing from the Bill; then I shall cover the elements of concern.

      There is nothing in the Bill on leasehold reform. The hon. Member for Worthing West (Sir Peter Bottomley) has been leading a campaign on this issue for some time. The Leasehold Knowledge Partnership has supplied a briefing outlining the key elements missing from the Bill. It states:

      “The law commission report proposing the replacement of forfeiture with a forced sale through the termination of a tenancy has been with government since 2006.”

      2 Nov 2015 : Column 760

      It goes on:

      “The government is aware that many leasehold landlords are delaying or stopping the ‘right to manage’ on very minor technical grounds”.

      It also states:

      “The basic right for leaseholders to form a Recognised Tenants Association is set at a needlessly high level”.

      Furthermore, the so-called informal disputes tribunal procedures are far from informal or inexpensive.
      Chas Says:
      This is well known and yet nothing changes???

  3. Hi Chas,
    What you have said is 100% correct. both LVT cases will verify these facts. The first case which we won, we had to pay £3,000.00 of the barristers legal costs. On appeal we were advised to return to the LVT only to be told we had No Locus Standing and had a further £9,000.00 awarded against us. I will let you decide if this was abuse of the system

    • Norman,

      This could be part of the continuing harrasment that was made against you, by a then Peverel Director, who was in place at the time??? I will not mention his name, but he is now with a similar company who are attempting to replace Peverel @ ex McCarthy & Stone developments.

      The LVT and now FTT have not been on the Leaseholders side and to choose to award costs even when the case is won and no vexatiousness was considered to be why, the case was brought.

      The recent highlighting by Campaign against retirement leasehold exploitation of the Leasehold v Commonhold is worth reading again.

      I have posted my comments on About Peverel which I compiled on Sunday after reading your comments before you sent them to SOK.

      Please confirm that my postings are facts and revise any that may be incorrect.

      Your friend Chas.

      • Norman,

        I remembered last night that part of the spite and intimidation began with Keith Edgar who decided to follow you to the lift at a meeting, not sure where? He approached you in the lift and introduced himself then said (non repeatable)? Please confirm this actually occurred?

        The decision also to remove the money paid into the Guest Room which was maintained by the residents was no longer to be paid into the Service Charge and in future would be paid to the Managing Agent? Please confirm this is correct.

        I also remember that there could have been a different scenario if the Respondents who had ignored a written determination and insisted going to the tribunal. Where it was heard that they had decided to “make an example of you and KK”. Please confirm if this is correct.

        Posted by chas on 03 November 2015

        Chas,
        I have documented it in several of my comments. KE telephoned, and made an appointment with my wife to come to see me. When he arrived I asked why have you come to see me in particular he replied by saying” To listen to your Venomous comments”.This was said in front of witnesses.
        The Guest Room income farce came about after the LVT chairman said that Guest Room Income was not a service charge matter (Ref Decision The Determination Chap 7. item 7.3 )
        Case No : CHI/OOHC/LIS/2009/0030
        It was Mr Rapley who made the comment that they would make an example of us if we took them back to the LVT.
        I have all these comments documented.

        Posted by Norman on 04 November 2015

        Norman,
        Can you confirm that the Keith Edgar you refer to is now a director of Freemont Property Managers, who E&M are encouraging residents to appoint as managing agents in preference to Peverel/Firstport?
        Is he by any chance the same Keith Edgar that was summoned to a meeting with Prime Minister David Cameron and ordered him to “leave a development?”

        Posted by Michael Epstein on 05 November 2015

        Michael,
        It is my understanding that it is the same Keith Edgar now a director of Freemont Property Managers, who E&M are encouraging residents to appoint as managing. I also believe it is documented on one of the web sites that David Cameron spoke to Keith Edgar

        Posted by Norman on 05 November 2015

  4. Michael Epstein says

    Most people act out of self interest. You are different Norman. You act in the in the best interests of others afflicted by the curse of leasehold. Every leaseholder in the land should appreciate your wonderful efforts. I certainly do.

  5. Good to hear from you, Norman!
    You are to be commended for your tenacity in challenging these crooks, and finally breaking free with RTM. I, too, have used the Small Claims Court – in my case, for the Exit Fee. Fairhold’s barrister tried to frighten me with the threat of costs (rejected by the Court). And pulled the same stunt of producing their defence at the last minute. As I represented myself, perhaps it’s no surprise I lost the case. But had the satisfaction of the look on the barrister’s face when he was denied £10,000 costs.
    The Law Commission is now inviting submissions to their consultation on what they call ‘Event Fees’ (details below). I will certainly be commenting on these pernicious fees. As long as leasehold is still with us, we should all take this opportunity to try and get some improvement under the current rules.

    On 29th October, the Law Commission published a consultation paper on Residential Leases: Fees on Transfer of Title, Change of Occupancy and Other Events.

    “Leases of retirement flats and bungalows often include a fee triggered by certain events, such as when the owner sells or sub-lets their property. These “event fees” are typically set at around 1% of the property sale price but can be as high as 30%.

    Event fees can be a practical way of making retirement flats affordable, particularly for older people with low incomes, because they can defer the costs until after they leave. But owners and their families are often neither told about the fees until after they have agreed to buy the property, nor prepared for the potentially high price.

    In a consultation opening today the Law Commission looks at what can be done to protect consumers from unexpected leasehold event fees (which include varieties such as “transfer”, “contingency”, “deferred-management” and “selling-service” fees). The Commission asks:

    – should developers, landlords and managing agents of retirement flats do more to make potential buyers aware of event fees at an early stage,

    – should this obligation be extended to estate agents, and

    – how far could this be achieved through industry codes of practice?

    The Commission provisionally proposes measures that developers, landlords and managing agents might take to make event fees more transparent, and asks whether the courts’ power to strike down unfair fees should be strengthened.”

    The consultation paper can be accessed by clicking this link: http://www.lawcom.gov.uk/wp-content/uploads/2015/10/cp226_residential_leases.pdf There is also a summary available http://www.lawcom.gov.uk/wp-content/uploads/2015/10/cp226_summary.pdf and a response form http://www.lawcom.gov.uk/wp-content/uploads/2015/10/cp226_response-form.doc For more information, please visit the project web page: http://www.lawcom.gov.uk/project/transfer-of-title-and-change-of-occupancy-fees-in-leaseholds/

    Please note, (they) seek responses by 29 January 2016.

    Max Marenbon | Law Commission
    Research assistant | Commercial and Common Law Team
    1st Floor, Tower, Post Point 1.53
    52 Queen Anne’s Gate, London SW1H 9AG
    (access via 102 Petty France)
    Tel: 020 3334 3603 | Fax: 020 3334 0201 | Web: http://www.lawcom.gov.uk
    Email: event_fees@lawcommission.gsi.gov.uk

  6. Susan,
    It was great to read your comments and to know you are still fighting your corner. A lot of water has pasted under the bridge since our trip to Bournmouth with channel 4. We have won quite a few small battles, but the major one would be to get rid of leasehold altogether once and for all. I hope you still have my phone number, give me a call sometime so we can put the world to rights.