Campaign against retirement leasehold exploitation has advised the questioners to ask the freeholder what the 10 per cent exit fee is actually for, and copy the correspondence into their MPs – fortuitously Mark Prisk, the Tory Housing Minister, and former Tory health secretary Andrew Lansley.

Some questions concerning the freeholder’s brother running the in-house estate agency might be in order as well.

Any other ideas please include as comments.

My sister and I are desperately trying to find a way out of the financial stranglehold imposed on us by the management company of xxxx Manor, in xxx.

Briefly, our father died in July 2012, having lived in a two-bedroom assisted-living bungalow at xxx Manor for the previous seven years. The standard of care he received was excellent – far beyond what we could have hoped for – but the management company’s ability to run the place, and its apparent greed, are in stark contrast.

After our father’s death, and in accordance with the management company’s requirements, we had to pay for the place to be completely re-decorated and re-carpeted (costing almost £3,000), and the property was then put up for sale.

Since then, we have been charged the full monthly service fees of £750 (the company has agreed that these fees should be logged as a debt against the eventual sale, as we are unable to afford to pay each month). When our father was alive, these fees covered twice-weekly cleaning, grounds maintenance, his use of the communal facilities, staff monitoring of his welfare, his attendance at social events etc.

We have argued that, as many of these services had no longer been provided after our father’s death, the monthly service fees should be reduced. This was refused on the grounds that staff costs still needed to be paid. There are currently nine empty assisted-living properties on the site – about a quarter of the total – so staffing responsibilities and numbers will be considerably reduced (and cheaper).

My sister occasionally visits the property, and has found lights burning and doors left open; a toilet was dripping until we told the owner of xxx Manor who then sent a maintenance man to mend it; and without anyone using the place it cannot warrant twice-weekly cleaning. Our debt so far stands at around £10,500. We struggle to understand what we benefit we are receiving in exchange.

Our main complaint is with the management company’s policy of deducting a percentage of the eventual sale proceeds of our father’s home. The contract (signed by my parents) states that an amount equal to two per cent of the sale proceeds, for each year or part year of the term of the lease, should be levied, up to a maximum of 10 per cent. As our father had lived there for seven years, we will incur the full 10-per-cent charge. The property is on the market for £265,000 so the management company will pocket £26,500. Again, we struggle to understand what we will be paying for.

The proceeds of the sale of the property go straight to the management company, which then deducts anything it wants to – including, apparently, unspecified fees involved in ending our father’s lease and drawing up a new one – before passing on the remainder to my sister and me.

When we first put the place on the market, we were advised to use a local estate agent. We were told this company had experience at marketing such specialist properties as assisted-living places, and that the fee would be only £1,000. It transpired that the company is run by the brother of the owner of xxx Manor.

This brother runs his estate agency from home; has no high-street window where local people can view properties for sale; had to be reminded by us, several times, that he should be listing our father’s place on his website and should be taking photographs of the interiors; and has failed to report back to us even once on his efforts to sell the place.

The sale price of our father’s property was determined by the owner of xxx Manor and his brother. We have just instructed another agency, who tell us the place is considerably under-valued – he said he believed that, by under-valuing, the properties would then sell more quickly without much effort on the part of xxx Manor or the estate agency.

He estimated that our father’s property should be offered for sale at £290,000 and that we should expect to get £275,000. We accept that this might not be realistic at a time of subdued interest in the housing market, particular for such specialist properties, but the situation again highlights the monopoly and power held by xxx Manor.

According to the contract, the management company also “undertakes to use all reasonable endeavours to dispose of the premises in the open market”.

In the past year, they have held a few open days for all empty properties but otherwise seem totally unable to market xxx Manor in general (there is also a care home on the site) or the vacant assisted-living properties in particular.

I am an experienced journalist, and have had several meetings with the owner of xxx Manor (for which I have not charged) to try to get them to market the place.

I’ve also drawn up a detailed PR strategy for them, and offered to carry out some of the basic steps to get the marketing drive started.

Nothing has happened, although six months later they recruited a young girl (Lithuanian, we believe) as marketing manager, whose English is not very good. The website for xxx Manor is dreadful (eg links to related sites carry the suffix “.aug” instead of “.org”), vacant properties were listed only when we insisted, and it has failed to flash up news of any of the open days.

Recent open days have been held on weekday afternoons (rather than at weekends) when families of potential residents would generally be at work. When I asked why this was, I was told by a member of staff that weekend open days attracted too many people! It all adds to the belief that xxx Manor management company has no incentive to sell empty properties – the monthly service charges continue to be paid while places remain empty, and savings can be made on staffing levels.

In August, I received a letter asking me for £154 for buildings insurance for our father’s home. The policy had apparently been renewed four months earlier (would the place have been insured in the intervening time?). There was nothing to tell us what was covered by the policy, and no note of how the figure of £154 had been arrived at (the full premium is apparently divided equally between all properties). I haven’t replied or sent any money.

We are not the only residents who are extremely unhappy with the situation at xxx Manor. The daughter of another deceased resident – head of a solicitors’ company – is seeking to try to challenge the contract and the prohibitive fees/charges/penalties that xxx Manor is trying to impose. But funds are limited and my sister and I can certainly not afford to finance what could well be a lengthy legal battle.

We have had an expert (a friend doing us a favour) examine the contract our parents signed when they moved to xxx Manor in 2005 – he was aghast at how badly it was drawn up, and the penalties listed within it.

At the time, we would have urged our parents to sign almost anything, as they so urgently needed help. And looking back, we hugely value the exemplary devotion our father received from the carers at xxx Manor. But now his hard-earned money, that he would happily have envisaged being left to my sister and me, is being diverted to fund a management company that has shown itself to be greedy, self-serving and unscrupulous in preying on vulnerable elderly people and their bereaved families.

If there is anything at all you can suggest to help us in this appalling situation, we would be extremely grateful.

Campaign against retirement leasehold exploitation asked whether there was any evidence that the freeholder’s brother ever achieved the asking prices he set. Also how the 10 per cent exit fee is referred to in the lease.

There is no mention in the contract of a buy-back process if a property isn’t sold through the freeholder’s brother’s estate agency.

Having said that, the daughter of the deceased solicitor who used to live at xxx Manor says in a letter to me that she has been trying to sell her father’s place for more than three and a half years. After various battles with the freeholder, she says that he has “served notice to end the term on us, to enable him to sell the property. Hence, as I see it, we have no property any more and this was allowed under the terms of the papers signed. I have been refusing to pay any bills this year, arguing that it’s not our property. The freeholder, of course, bounces all bills back to us.” 

She is, understandably, rather emotional about the whole situation.

I can find no indication in the contract, signed by my parents, of why a 10-per-cent levy is made on the sale price of the property or what that levy would be used for.

The relevant paragraphs state: “Immediately following completion of the new lease, the lessor shall pay to the lessee or to the lessee’s personal representative a sum equal to the premium which is paid to the lessor by the new lessee for the new lease (“the Repayment Sum”) subject to the following deductions . . . . all fees, expenses and costs incurred by the lessor or the management company, including staff costs, in arranging the grant of the new lease and the surrender of this lease including and without prejudice to the generality of the foregoing any legal, surveyors and estate agents fees (the lessor and the management company agreeing not to levy an agency fee in respect of any work undertaken by them in connection with finding a new lessee for the demised premises) . . . . an amount equal to two per cent of the premium paid under this lease or the repayment sum, whichever shall be the higher, for each year or part year of the term of this lease up to the date of termination but not exceeding 10% (“the Renewals Charge”). 

What tortuous terminology. But no indication whatsoever that even tries to justify the levy.

Related posts:

Heirs of empty retirement leasehold flat now face doubled council taxes … on top of plummeting re-sale value, on-going service charges and an exit fee if it ever does sell What happens if the managing agent or freeholder goes bust? OFT does deal with Tchenguiz to cut sub-letting fees to £85 at retirement developments – but exit fees on sale still stand You DO have to pay sublet fees annually in retirement leasehold