I am the chair of a residents association at a Peverel site that is 43 flats and 20 years old next year.
We have a long running battle over Peverel’s management fees which for this financial year 2013/14 is £16,468 on top of all other costs in the service charge.
Our research indicates that the fee is very high. It has never been reduced or frozen in 20 years. In the last five years it has risen by over 21 per cent against the two indexes RPI and CPI of 15 per cent.
Peverel as usual just ignore our requests for justification for such a high figure saying it is “value for money”.
Following some strong correspondence with facts and figures etc from me, we have a meeting with a regional manager next month to discuss the matter.
I would like your opinion of the high costs and do you think it is worth taking it up with the LVT if we do not get anywhere at the meeting?
I would very much appreciate any comments.
I am repeatedly informed that opting for right to manage and dispensing with Peverel’s services results in approx 20 per cent savings.
If you have a functioning residents’ association you are half way there.
LKP accredited managing agents can handle an RTM usually in return for a one-year management contract.
You should interview three firms and then choose.
The management fee is only an element in the revenues that the management company earns. You can argue with it about this declared fee, but it is not the main point.
Campaign against retirement leasehold exploitation would always urge residents to opt for right to manage and then choose your own managing agent. We are repeatedly informed that this results in approx 20 per cent savings.
The only decision you have to make with right to manage is to appoint a firm to manage the place for your benefit. That’s it.
But it also means the site is run for your benefit, and not that of a management company or the freeholder it serves.
(Two sites in Plymouth, Elim and Regent Courts are fighting for right to manage against an appalling freeholder and the latter case is going to Court of Appeal!)
In my experience, arguing over these charges is time consuming and largely pointless at LVT. I also doubt you would win much back if the freeholder/ managing agent used legal representation.
The best secondary option is to demonstrate clearly in correspondence to Campaign against retirement leasehold exploitation why you feel this fee is unjustified. We would pass to the local MP, copying in to the housing minister and Sir Peter Bottomley, who has an interest in leasehold abuses. This will ensure the issue is taken seriously.
But to repeat: whatever you gain will be lost in time. Broadly speaking, you are kindly asking a company to play fair.
What makes you think it would do so?
Related posts:
How can we avoid paying one per cent on renting out our retirement leasehold flat?
Ex-Peverel CEO Nigel Bannister sets up Freemont Property Management
Leaseholder Association Pt 2 (Originally headlined: I don’t like our RTM, but what can I do?)
Devon pensioners humiliate Y and Y Management in tribunal ruling
Chair of Residence,
Campaign against retirement leasehold exploitation is correct in what it has stated, you should contact other developments and ask questions of how they manage. Sebastian will give you my details.
If it is a Peverel Site then state which Peverel Company it is:-
Peverel Retirement Division, (non trading,only a trade name Peverel Retirement Ltd, no longer trades?
Peverel Management Services Ltd (is this the company you pay the Ground Rent to?)
Peverel Services Ltd this company has 16 subsidiary companies and links to a further 5 companies?
Check on the internet for Duedil which stands for Due Diligence it is brilliant.
I agree with the Campaign against retirement leasehold exploitation strategy.
Get 3 managing agents that are on the Campaign against retirement leasehold exploitation/LKP approved list to quote for a 12 months contract, as you can be pretty sure they will offer value for money.
Make sure you ask them if they intend to recieve commissions from insurers and how much it is going to be.
Management fees are usually based on a flat fee per apartment per year, example £150 per apartment per year each. Then add to that the total amount that is expected to be needed to run your development plus a sinking fund for future repairs is a fairly typical contract.
Find out how many times they would visit your site for their money and exactly what they are going to do. If they can not provide you with this information then you should not be dealing with them.
You also need to feel confident that you can call them anytime you feel you need to, to discuss finances and budgets…. 3 or 4 times a year is the norm to make sure you are on track and not overspending..
If you can prove that you can make substantial savings then that will give your fellow owners a very good reason to join in the RTM Co.. Good luck..
Chair of Residence,
Does your development have a Warden Call System?
It is usual for Peverel to begin informing residents once the 20 year figure is close.
The management have been known to highlight this once the years 18/19 have arrived?
This has been mentioned in a LVT that by doing this in the past provided work for Cirrus.rming residents that the Warden Call System is obsolete and will need replacing/updating.
Do you know if this has been a topic at the last meeting?
Sebastian
The reply has been published before I finished, that is why the wording after Cirrus was not completed.
I ask again are you having trouble?
Once you have gone through what can be a stressful process of forming a Right To Manage Company, the dividends are tremendous. I accept though, that even after the most stringent inquiries, the appointment of a new managing agent may not work out. However, if this does prove to be the case, the RTM company simply appoints another company . No fuss, no bother.
Companies such as Peverel have worked on the basis that leaseholders will never understand or exercise their rights. To a large extent it used to be that we(against our free will) “depended” on Peverel.
Now we know Peverel “depend” on us. And that is what has got Peverel very scared.
To all those concerned about increasing Peverel management charges, you should not just be looking at the per unit management fee. Whilst many managing agents “appear” to charge a higher fee (thus making it seem Peverel are competitive) Peverel make a considerable amount of money from extras.
For example, a late payment letter which most managing agents charge £25,Peverel impose a charge of £60.
To understand why Peverel charges are increasing you need to look no further than the financing of Peverel.
Before Peverel earn a penny for themselves, they are weighed down by the burden of huge debt, which must be repaid and is double what customers were led to believe.
Imagine the pressure of having to pay interest rates of between 9 and 15% to your “owners?” Now add the payments due to the bank (that was the £25m loan we knew about) Consider the £8m Peverel have to find for “customer” disputes. Now factor in the number of very profitable high profile developments Peverel have lost. Given the absolute priority of the “owners” is to get their investment back (either through repayments or the astonishing interest charges) it is little surprise that Peverel act the way they do.
Some managing agents are better than others. Appointing a managing agent that is not so heavily in debt that needs to make so much more profit just to pay interest charges should be of benefit to leaseholders.
You don’t say how the 21% increase was calculated. Peverel charged 10% on expenditure before it got into financial difficulties and has since jacked the fees up 15% + VAT. That’s a lot more than 21% and it’s based on a continuing clear conflict of interest, in violation of RICS guidelines.
And those percentages are on top of commissions and kickbacks and contributions to overhead and incentives and rebates and discounts, to say nothing of the additional earnings from not keeping client money (including reserve funds) in separate accounts for each client.
The say Tesco gets 1 in ever £10 spent in the UK. The question here is how much of every £1 of your service charges is Peverel getting? Or perhaps, how much are they not getting?
OMhostage,
You give a figure of jacked up fees of 15%.
How very odd that 15% matches the interest rate the “new owners” are charging Peverel for the funds they put in to “save” the company.
We are 40 flats, 20 years old, £13.000 for 2014.
But we look at every invoice and bank statement, and we have a retired electrician to look at quotes, and a retired person who has been in the building industry most of their life, and a semi retired plumber.
trust no one till you have checked their work with other blocks.
I would have thought one way to stop service charges going up is to place the service charge demand in a Peverel lift. This way they probably won’t go up! Mind you, they probably won’t go down either!
Sebastian and all others, Many thanks for all your comments much appreciated. To the holy mole is your a PEVEREL managed site in the SE OF ENGLAND ? Best Yorkie
Excellent 😀
Hi Chair of Residence ,
I notice that you say your block will be 20 years old , next year . Does this mean your leases have fallen from 99 years at start to 80 years remaining now ?
Your leaseholders should get organised to make a collective purchase of the freehold title as it will be more costly to extend leases later due marriage value element entering the compensation formula .
Free guides on the statutory 90 years lease extension and collective freehold enfranchisement can be downloaded from LEASE website ( http://www.lease-advice.org )
My Mum is in Peverell managed site. Fees have gone up and she is concerned, as are many of her friends there, just how much longer she can afford to live there.
Do you have to go Right To Manage route in order to employ services of an approved Management agent to reduce costs.
Some residents are very elderly and more financially secure than my mother and don’t seem particularly alarmed by the increased fees – hence my concern how viable getting rid of Peverel will be. There is currently no residents association set up.
Given these facts, could you please advise me as to the best steps to take from here. Many thanks.