December 17, 2018

Places for People defeated by Yorkshire pensioners who stopped paying service charges

Hall Mews in Boston Spa in Yorkshire is an attractive, stone-built site of terraced houses, but the residents are exasperated with Places for People housing association

Hall Mews in Boston Spa in Yorkshire is an attractive, stone-built site of terraced houses, but the residents are exasperated with Places for People housing association

The housing association Places for People has come off worse after taking 12 retirement leaseholders to the property tribunal for refusing to pay services charges.

The dispute concerned payments for the house manager’s terraced house at Hall Mews, in Boston Spa, in Yorkshire. Feelings run high on the issue, and around 30 neighbours packed into the tribunal last month.

The home of the house manager – called the “secretary” at Hall Mews – had been unoccupied since 2006 and finally sold off in May last year.

The residents of nine leasehold properties – three being husband and wives – thought it was unfair that they were being charged for something that was of no benefit and so refused to pay service charges.

The tribunal agreed with them, cutting utilities costs and council tax on the house by two thirds, throwing out costs of £2,350 for a new boiler put in just before the sale and reducing leaseholders’ contributions to the maintenance reserve from 2010 to 2013 to zero.

The dispute was of great concern to Campaign against retirement leasehold exploitation, which feared the consequences in terms of legal costs if the pensioners did not win every aspect of their case.

Freeholders routinely play the system against lay leaseholder respondents by racking up legal fees and deploying barristers.

Campaign against retirement leasehold exploitation / LKP always advises leaseholders to pay service charges then dispute them as applicants to the court, which makes legal costs almost impossible for freeholders to claim. This is far less risky than being taken to tribunal supposedly owing money as respondents, as was the case here. 

We contacted David Cowans, the CEO of Places for People, in October last year (below) to suggest that the issue be mediated instead of a full-blown tribunal hearing.

Campaign against retirement leasehold exploitation copied the correspondence to Sir Peter Bottomley and to local MP Alec Shelbrooke, the Conservative MP for Elmet and Rothwell. The latter has been particularly diligent in inquiring over the fate of his constituents.

To its credit, Places for People said that it would not be deploying lawyers or seeking costs in the litigation, and it did not do so.

Indeed, this case appears to be a rare example of the property tribunal working as it is supposed to: as a low-cost redress forum.

The dispute over the house manager’s house began after Places for People concluded in 2007 that it could not employ an in-house secretary at the 24-unit site.

The building was converted into a separate residence and office in 2012 and the house was sold the following year.

The key issue was whether the house manager’s flat was an element of the common parts, or belonged to the freeholder.

The tribunal ruled that it belonged to the freeholder and that the residents were not entitled to 10 per cent of the sale proceeds placed in the sinking fund.

(This is an arrangement that is open to legal challenge, but widespread in retirement leasehold.)

But as the property belonged to the freeholder and was not being occupied by a house manager, the leaseholders did not have to pay for it.

“It is the applicant’s (Place for People) contention that as [the house] formed part of the lessor’s estate it fell to the respondents to pay for all the costs associated with it, even though the services with which it was originally associated had been altered.

“The tribunal does not agree with this assertion …”

The house manager was only working 15 hours a week and was non-resident.

Hall Mews from the back. Local MP Alec Shelbrooke has asking Campaign against retirement leasehold exploitation for updates on the case

Hall Mews from the back. Local MP Alec Shelbrooke has asking Campaign against retirement leasehold exploitation for updates on the case

In addition, “The tribunal finds that it is unreasonable for the applicant [Places for People] to charge the respondents for heating and lighting the entirety of the property when only one room was in use for their benefit.”

The tribunal ruled on council tax obligations by making the same point.

The residents in Hall Mews were particularly indignant at being made to pay for a new boiler to the house, costing £2,350, just before it was sold – especially as the sale “did not yield the 10% of sale value into the sinking fund which had been anticipated”.

The tribunal was informed that Hall Mews has a sinking fund of £116,197 and a maintenance fund of £11,934.  The sinking fund received 10 per cent of the sale price on properties that are sold.

The residents could not understand why they were being made to pay excessive amounts to the maintenance fund, while the sinking fund had such a large surplus.

The tribunal agreed and told Places for People to refund all maintenance fund payments dating back to 2010.

The residents of Hall Mews remain in a rebellious state of mind.

They are exploring right to manage or, better still, enfranchising the site, and being rid of Places for People.

They are also eager to trace approximately £30,000 paid in compensation for a diverted path by their neighbour: that epitome of Yorkshire truculence Geoffrey Boycott.

The case reference number is: MAN/ooDA/LIS/2013/008-17

 

 Letter from Campaign against retirement leasehold exploitation to Places for People

David Cowans
CEO, Places for People
Chris Phillips
Chairman, Places for People
Deborah Linney,
Case officer, Northern Property Chamber

Re: Property Tribunal action re residents at Hall Mews, Boston Spa, LS23 6DT

October 9 2013

Dear Mr Cowans,

I am copying this correspondence to Sir Peter Bottomley, who has an interest in leasehold issues, and to Alex Shelbrooke, the MP for Elmet and Rothwell.

I have been contacted by pensioners at Hall Mews, Boston Spa, Wetherby, who are alarmed that a dispute over service charge arrears has escalated and is now heading to the courts.

They feel that Places for People has not addressed the reasonable issues involved here at a senior level and believe that a number of them, and possibly all, could be resolved by mediation.

The pensioners at Hall Mews are unrepresented lay respondents and I am writing to you as I am extremely concerned about the potential for this dispute to escalate.

In particular, I am worried about the possible legal costs.

In my work in leasehold, I am repeatedly encountering unscrupulous freeholders resorting to cleverness in the property tribunals: expensive specialist lawyers confronting lay applicant homeowners; voluminous submissions submitted on the day of the case, and so forth.

Sir Peter has raised these issues in Parliament, and named a number of the offenders.

I do not suggest for a moment that this is what we see here.

But the pensioners are genuinely perplexed why their reasonable questions regarding the issues at Hall Mews are not addressed by Places for People.

Their complaints concern service charge rises; no amendment to service charges now that Places for People has sold the secretary’s mews house; the high contingency and maintenance funds at more than £126,000.

You can understand the pensioners concerns when one discovers that all the nine respondents who are withholding service charges received a re-payment from Places for People for £361!

At the start of a year a meeting to discuss service charges and other issues was declined by PfP on the grouns that “there are no exceptional circumstances at Hall Mews that require one”.

This is obviously not a satisfactory situation.

It would be a failing all round if a dispute ends up in the courts which could have been resolved with a little effort and a minimum of goodwill.

Yours sincerely,

Sebastian O’Kelly

Chairman
Campaign against retirement leasehold exploitation
(Campaign Against Retirement Leasehold Exploitation)

 

 

Comments

  1. Michael Epstein says:

    Whilst I understand that tribunal decisions may not be binding on other tribunals, this ruling must have implications for managing agents/freeholders who are currently trying to raise capital by convincing residents it would be in “their best interests” to agree to the sale of a House Manager’s flat.
    Who owns what is an important issue?

  2. I don’t think so. It was not a point pressed in the tribunal and neither side had legal representation. I suspect the influence of this tribunal on the issue of ownership of house managers’ flats will be minimal.

    Dreaming up notional rent for house managers’ flats was an wheeze of the 1990s, while now selling off the flats (which leaseholders have maintained) is the monetising idea now.

    Peverel’s RBS loan is secured against these assets and their incomes.

    It needs to be challenged.

  3. ME
    We have a similar situation at ABC where our residents agreed not to maintain a full time House Manager as the last one was sacked for Gross Misconduct and spending Service Charges to brighten up the development where the managers were on commissions if they were involved in the sale of a flat?

    Peverel Retirement have stated from April last year that they have applied for Planning Permission to build an office and that would then allow the Wardens Flat to be sold.

    We had a meeting recently when Peter Whalley attended to inform us that we would be silly to go for RTM he again stated that the Planning Permission was due very soon, I contacted the Planning Department who stated this year, no application had been received.

    Another load of **** from this Regional Manager. I contacted the Freeholder who informed me he had given permission for the office application last April 2013.

    We have a meeting on the 14/03/2014, the previous meeting a month ago was cancelled, due to illness, the second time in less than a year a late cancellation has left resident out of pocket and having to travel again as some have moved out?

    Peverel Retirement are not to be trusted any more, they refuse to answer legitimate questions and attempt to divide us the residents.

    As the Wardens Flat is mentioned in the lease how can they sell the flat (house) when it is part of the development????

  4. Paul Joseph says:

    When a Peverel employee tells you you’d be silly to do something you can be very sure that not doing it would be folly. In general, it’s a good idea to do the exact opposite of whatever Peverel recommends, as their recommendations are solely and exclusively aimed at maximising Peverel’s income.

    There was a time when the leopard was making protestations of spot changes. They have proven to be completely bogus, as might have been expected.

    Now that the OFT is being abolished and replaced we can expect, or at least hope for, a proper investigation into all the abuses and conflicts of interest in the leasehold property management sector. Perhaps we can expect some redress, maybe even some regulation.

    If one would be silly to go for RTM one has to wonder why block after block after block — as documented on this site — is giving Peverel the boot. Thousands and thousands of leaseholders who are able to do so ridding themselves and their properties of anything to do with this company.

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