March 29, 2024

LEASE: Don’t be panicked over Triplerose multi-block RTM ruling

(… which is what we have been saying all along)

Don't panic and collapse your RTM because of Triplerose

Don’t panic and collapse your RTM because of Triplerose

Ten months after the Triplerose decision in the Court of Appeal on multi-block RTMs, the Leasehold Advisory Service has issued its advice: don’t do anything.

“The advice to the customers for now can only be to do nothing, unless the landlord starts any action of their own.

“There has been no authoritative court judgement on this point. [ie the status of existing multi block RTM’s]

“Consequently, the law is not settled and therefore, we cannot say for certain what the legal position is.”

This advice echoes that of LKP / Campaign against retirement leasehold exploitation, but sits in contrast to letters sent to RTM directors by the Right To Manage “Federation”, among other commercial operators, saying directors must “Act now” and that “Your RTM company may be illegal”.

Inevitably, commercial intermediaries are seeing the Triplerose v 90 Broomfield Road RTM Co decision as a fee-earning opportunity.

It is understood that RTM directors are being advised to head off to the property tribunal, dissolve their RTM company and then set up new RTM companies for each of the blocks. LKP has seen correspondence for one site – with only two blocks and the sleepiest conceivable housing association freeholder – where fees of £4,500 were suggested.

Here there is very little risk of the freeholder doing anything at all.

LEASE is to write to Dudley Joiner, of the RTMF, “removing reliance he has placed on the previous letter [from LEASE]” which suggested its support for active intervention.

Over a number of months, LKP has discussed the Triplerose issue with government, the Land Registry and barristers.

None of the lawyers has suggested making a move unless a landlord has begun some form of action of his own.

None has suggested the multi-block RTM is or has always been illegal.

None has suggested there is no legal right to collect service charges.

Civil servants advise us that they, too, are observing events before making any decision to revise RTM law.

LKP is not aware of the usual predatory freeholders making an effort to regain control of “their” sites, although there is understood to be one. It will be interesting to observe this dispute closely.

But why haven’t the usual gameplayers in this sector made a move to topple uncongenial RTMs and win back control of their sites?

Suggestions that the Land Registry may refuse to register the sales of flats on a multi block RTM sites, seem to be without foundation. LKP is advised that it has no such plan.

The Land Registry is no longer able to register existing multi-block RTM companies that came into force before March 27 2015, but which have not previously been registered.

The registration of the RTM with the Land Registry is voluntary, and in any case a separate matter to the status of the flat.

Triplerose ruling is here:

BROOMFIELD-v-TRIPLEROSE

Campaign against retirement leasehold exploitation comment

Campaign against retirement leasehold exploitation is hardly known for turning away from problems, or just sitting round and waiting.We were ones who brought about three large-scale investigations by the OFT. I think we can also make a fair claim to have done far more than anyone else, save for government officials, to help start the Law Commission report into exit fees.

It took a lot of work to reach our view that existing multi-block RTMs should do nothing to change their current status.

That others reach a similar view is what we now pass on in our article.

The simple fact is we are unable to find anyone who agrees with the proposals from the Right To Manage “Federation” to change where you stand (from what we understand of them).

Lets start by correcting Dudley Joiner’s point about his planned cases providing “legal certainty”.

A lower tribunal case does not provide “legal certainty” for anything other than the specific case heard, assuming that it is not appealed.

The lower tribunal does not set legal precedent, and a different lower tribunal may reach a different conclusion.

The power to set precedent is limited to the higher courts. As we saw in the Triplerose case, that means years of litigation.

Campaign against retirement leasehold exploitation is not sitting on the fence. We are saying as loudly as we can: think very carefully before becoming part of the RTMF test case.

We have no belief that the RTMF case is certain to succeed, and we believe that it may even put you in a considerably worse position.

Our advice that you should not to change your current RTM status, unless the landlord starts an action, is based on our analysis of the issues.

That our view is echoed by many solicitors, barristers and QCs reassures us that we are calling this right.

We have also discussed the matter with government officials, ARMA, knowledgeable managing agents, the Land Registry and LEASE, whose view is now plain.

We have seen the outline of the case proposed by the RTMF.

Our view is that it may have many potential difficulties. We do not intend to review these proposals in any detail as that would only aid aggressive landlords (some of whom may be delighted that an RTM site has chosen to initiate a case).

If you are still persuaded to be part of the RTMF’s test case, and in particular if you are an RTM director, we would urge you in the strongest possible terms to seek independent legal advice about your own position.

A version of our article above will shortly be appearing in the Federation of Private Residents Association newsletter.

Comments

  1. “WHEN PROBLEMS ARISE, SOME TURN UP THEIR SLEEVES, SOME TURN UP THEIR NOSES, AND SOME DON’T TURN UP AT ALL”

    The RTMF has a responsibility to advise its clients to take the safest option to minimise risk and liability. There are facts not yet in the public domain that have led us to the advice we have given. We do not make decisions lightly or impulsively. Neither are we swayed by public ridicule and criticism. We act on our own independent legal advice, which has served us well over the years.

    RTMF has had no communication from LEASE on this subject. The above statement attributed to LEASE is correct. Although there is existing authority on retrospectivity there is not yet a definitive case on the precise consequences for RTM companies so affected. That is why RTMF is taking it to court to give certainty, as we have done with many other RTM issues over the last 10 years. Whether we are right or wrong, only time will tell.

    Our clients rely on us for assistance. We do not have the luxury of sitting on the fence. We are facilitators. We have to make decisions.

    “On the plains of hesitation lie the blackened bones of countless millions who at the dawn of decision sat down to wait, and in waiting died.” (Sam Ewing)

    • Well well well. Once again our trusty friend feels he has to defend the honour of his clients, but at their cost and their risk. As I have said in previous posts his circular letters are designed to worry leaseholders and I feel he is motivated by money and not any altruistic reasons. By bringing a court case he is actually drawing attention to this mater and putting it further into the public domain.

      Dudley Joiner is only interested in one thing. Himself and garnering money for the RTMF, which is built on very shaky financial foundations. His RTM claims seem to be drying up (from which he claims a huge fee from managing agents, favouring those who will pay the most) and so he needs another source of income. The Leaseholder Association has bombed and so the Triplerose decision plays neatly into his grubby hands.

      Avoid this man like the plague!

  2. Why does it cost £4500 to set up 2 new RTM companies ? Anyone can buy ready incorporated RTM companies & just add the name of block from online ” incorporating companies” for less than £200 each or much less for additional supplies..

    The RTM company does not trade with external parties and is normally registered as dormant company in annual returns to Companies House. The company articles are all the same except for the name and address of the block.

    If the estate has 2 blocks of flats, then it requires a RTM company for each block . So if only one RTM was set up for “A-B High St RTM Ltd” , Then change the existing company name to “A High St RTM Ltd” and buy a new company named ” B High St RTM Ltd ” and transfer the members.

  3. Has anybody looked carefully at the Triplerose Ltd v. 90 Bloomfield RTM Ltd ruling. ( Court of Appeal Judgement )? In this case before the Court of Appeal , Triplerose is joined by Freehold Managers ( Nominees )Ltd and Proxima GR Properties Ltd showing there is “business collusion” which is a variation of a “Price Fixing Cartels”. Campaign against retirement leasehold exploitation and Sir Peter should lodge a complaint to the Cartel Authorities , SFO, HMRC and Treasury.

    1. Proxima GR Properties Ltd is controlled by Tchenguiz Family Trust based in the British Virgin Islands and has not paid any tax on its rental income for many years. Proxima and E&M are both well known at the LVT because of frequent “excessive demands” for subletting consent fees.

    2. Freehold Managers ( Nominees) Ltd has been declaring itself as a dormant company ( no income and no profit ) which cannot be true since it is a freeholder and receiving ground rent income. Its been declaring dormant company ( paying no profits tax ) whilst using the FTT and UTT Tribunals and Courts to maximise its income and not paying profits tax .

    3. The Triplerose’s recent abreviated accounts can be seen at Companies House Records but it does not show what the rental income is and what tax was paid if any ? Its a company with paid up capital of just £2 and has got a Court Ruling in its favour by Judges who are paid by Tax Payers .

    The leaseholders at Bloomfield RTM, Garness Court RTM and Holybrook RTM probably paid more tax to HMRC than the 3 Cartel Companies put together. The legal cost of going to the Court of Appeal will be claimed by the 3 cartel companies as business expenses allowable against rental income by HMRC. But the legal cost of the RTMs will have to be paid from the pockets of the leaseholders and is an unfair system skewed in favour of a Cartel whose members are paying little or no tax..

  4. Michael Epstein says

    Ollie,
    Often, either Peverel/Firstport or increasingly E&M send a demand for ground rent on behalf of a company that is registered as a dormant company. Since a dormant company cannot trade, how could any leaseholder be assured that their ground rent payment is forwarded to the named freeholder and not another connected company?
    What would be the effect of having received a ground rent demand on behalf of for example Freehold Managers(Nominees) Ltd and instead of making the requested payment to either Peverel/Firstport or E&M it was made direct to Freehold Managers (Nominees) Ltd?

  5. Don’t think about playing with ground rent payments sent to dormant freeholder company ; their managing agents will book you for ground rent arrears and then give you nightmares .
    It is over 10 years since the Commonhold Act 2002 commenced and we can still see many leaseholders are abused. I would like to see the demise of Leasehold Tenure System and replaced by Commonhold tenure system. Leasehold property has been sold on leases with unfair terms to buyers and is embedded into the property tenure system, such as very difficult to change . Exposing false accounting records and non-payment of company tax may be a step forward to change the mind set of HMRC to leasehold. property.

    Just send the information to HMRC – Report Tax Evasion , office address in Cardiff to inform on the dormant companies not declaring their ground rent income by post ( anonymously ) from different towns including those RTM towns say once a month ( but for safety , don’t identify yourself ) .

  6. Michael Epstein says

    Ollie,
    Does a leaseholder not have a right to ascertain that ground rent payments are being paid to the freeholder? If the managing agent can show no contract to manage, nor can supply any evidence that they are passing on any payments to the rightful freeholder, surely it would only be by paying ground rent direct to the freeholder that would ensure those payments were received?

  7. ME,

    Your ground rent demand will show the name of the freeholder company and if last year’s ground rent was still owing, there would be payment of arrears included in the demand. Its the freeholder’s worry ( not yours ) if ground rent is not paid into correct account.

    If your freeholder is Proxima GR Properties Ltd and the Managing agent for ground rent collection is E&M, then William Procter is Director and Accountant of both companies registered at Molteno House and he is there to sort it out. Don’t waste your time on trivial ground rent payment .

    Have you read the 2014 accounts for Proxima GR Properties ? It shows the fixed assets standing at £1.574 Bil but the annual ground rent income is only £12 mil , such a tiny yield at less than 1% can’t be right ?.

    Rothesay Life Ltd seems to have registered a charge ?? Do you know anything about Rothesay ?

  8. Ollie, my Ground Rent demand always showed the full name of the freeholder (a Peverel Company) Mercian Development Ltd. Since they sold to MB Freeholds Ltd, they now show as freeholder, Meridian Retirement Housing Services Ltd, that are in fact our Landlord. They are Active/Dormant company and have a value of £100, the Head Lease is owned by Firstport Retirement, but the lease on the Deevelopment Managers Flat is not shown on the Meridian Head Lease? What are they hiding???

  9. Chas ,

    Your freehold seems to be owned by MB Freeholds Ltd ( 06999810 ) run by 2 guys based in Bolton and they seem to be not related to Tchenguiz .Group.

    Meridian Retirement Housing Services Ltd ( 01833177) is part of Peverel which is now renamed Firstport ( and ultimately controlled by Knight Square Holdings Ltd (07925023) having directors on Board from Electra Partners. ) Janet seems to have sold her shares in Knight Square and left completely.
    Firstport Retirement Ltd ( 034796230 ) has declared itself to be dormant company.

    When you buy a 125 years leasehold property in a retirement estate, you pay a higher price for the extra facilities including provision of house manager service and house manager’s flat which are held for 125 years in TRUST for the resident’s benefit .

    When these services are terminated, the proceeds of disposal of the assets should be distributed to the leaseholders . But the Knight Square Holdings Ltd accounts shows the profits include the proceeds from sale of house manager’s flats . It also mentions the service charge money from all the developments are deposited interest bearing accounts with RBS and this money not available to Firstport. So the interest from the service charge money must be taken by Knight Square Holdings and counted as part of their profit. THATS WHAT THEY ARE HIDING.

    • Ollie,
      Our Landlord “Meridian Retirement Housing Services Ltd ( 01833177)” is part of Peverel which has been renamed Firstport (and ultimately controlled by Knight Square Holdings Ltd (07925023) having directors on Board from Electra Partners). Firstport Retirement Ltd ( 034796230 ) has declared itself to be dormant company was incorporated on the 02/02/2015 and previously known as Peverel Management Services Ltd (09142759) which shows no Financial Records or Group Structure with ownership being Shoosmith Nominees Ltd which shows as an Active /Dormant Company.
      Phew!
      Peverel Retirement was a brand name for Peverel Management Services Ltd who became Firstport Retirement Property Services Ltd (01614866) incorperated on 02/02/2015.
      Phew Again.

  10. Chas ,

    I suggest you write to Sir Peter , Law Commission , Serious Fraud Office and National Crime Agency and ask for investigation into the proceeds from sale of HM Flats.

  11. Chas ,

    Try making a formal complaint against RBS which is financing Knight Square Holdings business operation to Financial Ombudsman

    ( or better still get your local MP to make the complaint to Financial Ombudsman. ).

    RBS is Royal Bank of Scotland which is 80% owned by the UK Treasury, part of the British Government.