April 28, 2017

ARMA rules against FirstPort Retirement …

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Humiliating criticism for the trouble property manager, but the path is now clear for it to apply for membership of the trade body

Pensioners at Mere Court in Knutsford were encouraged to agree to ending the inhouse manager service ... but Peverel / FirstPort owned her flat and its staff were in for a commission if it were flogged off

Pensioners at Mere Court in Knutsford were encouraged to agree to ending the inhouse manager service … but Peverel / FirstPort owned her flat and its staff were in for a commission if it were flogged off

The regulator of the Association of Residential Managing Agents (ARMA) has admonished on two counts Peverel / FirstPort Retirement, which was applying to join the organisation.

But the decision means the controversial company, whose subsidiary Cirrus was found to have run a collusive tendering racket at 65 retirement sites, is now clear to apply for membership of the organisation.

The ARMA regulator, Keith Hill, a former Labour housing minister, wrote this afternoon to Sir Peter Bottomley, MP, one of the patrons of LKP / Carlex.

“In summary, the Regulatory Panel upheld two complaints against FPRS [FirstPort Retirement] in relation to the proposed sale of a house manager’s flat at Mere Court, Knutsford, in 2013 and a failure to deposit transfer fees at Hillside Court, Ormskirk.”

“However, the Panel decided that the company was free to apply for ARMA- Q accreditation. The Panel has addressed a letter of admonishment FPRS.”

Both complaints have been extensively reported by Carlex.

At Mere Court residents were to be balloted on the ending of the resident house manager service and were wrongly told by Peverel / FirstPort that the manager’s flat belonged to the freeholder.

In fact, it belonged to Peverel / FirstPort, whose local middle ranking executives would have been paid a commission following a successful decision to sell it off.

At Hill Court, Ormskirk, Peverel / FirstPort Retirement had paid over in error contingency fee funds for the site to the freeholder (ultimately the Tchenguiz Family Trust based in the British Virgin Islands). After Carlex intervened, more than £39,000 was re-paid to the site.

Mr Hill continues: “In total the Regulatory Panel investigated three complaints concerning FPRS and its predecessor Peverel Retirement (PR).

“These complaints dealt with the sale of house managers’ flats in retirement homes managed by FPRS / PR, the Office of Fair Trading (OFT) decision on collusive trading in relation to works carried out on Peverel Group retirement properties, and a failure to deposit transfer fees into the reserve fund at Hillside Court, Ormskirk.

“In respect of the complaint about the sale of house managers’ flats the Regulatory Panel found FPRS to have been in breach of ARMA Byelaw 2.7.10 in the case of Mere Court in 2013 in relation to a failure to disclose an interest in the ownership of the flat and payments made to individuals associated with the proposed transaction.

Deep pockets and short arms ... Peverel / FirstPort Retirement were slow to pay back £39,000 plus of residents' cash until Carlex took up the case

Deep pockets and short arms … Peverel / FirstPort Retirement were slow to pay back £39,000 plus of residents’ cash until Carlex took up the case

The Panel noted that FPRS has made significant improvements in the information now provided to leaseholders. However, the Panel went on to recommend that full disclosure of financial interests should be made in future and also any possible resulting reapportionment of leaseholders’ [interests].

But the ARMA Regulatory Panel did not uphold complaints against Peverel / FirstPort Retirement concerning the Cirrus price fixing scandal.

“In respect of the OFT decision of 6th December 2013 on collusive tendering the Panel took the view that there was insufficient evidence from which it could conclude that FPRS was involved in the prohibited practices identified by the OFT and that the complaint was, therefore, not made out.

“The Panel was reassured that the matter had been thoroughly investigated by FPRS and that the tendering process had been altered and now involved an independent surveyor in the procurement process.”

Regarding the £39,000 plus that had not been paid over to Hillside Court, Ormskirk,

“In respect of the complaint concerning the failure of deposit transfer fees, the Panel found the company to have been in breach of ARMA Byelaw 2.2.2. in the case of Hillside Court, Ormskirk, in relation to compliance with the terms of the lease.

“The Panel noted the full restitution with interest had taken place although it remained concerned at the speed with which the complaint had been addressed. The Panel was reassured by the measures now in place to prevent, to the greatest extent possible, a repeat of such an error.”

Mr Hill described the complaints against Peverel / FirstPort Retirement as the “lengthiest and most comprehensive hearing conducted by the Regulatory Panel”.

It involved the presence of two leaseholder witnesses and multiple documents, including the OFT ruling of price-fixing by Cirrus.

No appeal to the decision has been lodged.

The news of the ruling is available to FirstPort staff on its intranet, but it has yet to be made public on the FirstPort website.

The ruling can be downloaded from the ARMA website here or from Carlex (below).

The letter from Keith Hill to Sir Peter Bottomley is here22 June 2016 Letter to Sir Peter Bottomley

The full ARMA ruling is here FirstPortARMAruling

Comments

  1. Michael Epstein says:

    ” When a formal tender process is necessary we invite at least three independent contractors(The only exception to this are our out of hours monitoring and some fire systems and alarm instillation works where a Firstport connected business maybe invited to tender)”
    This is taken from Firstport’s website. It concerns the very companies involved in the collusive tendering.
    Explain that ARMA?

    • Michael,
      ARMA has tried everything to ensure that Firstport Retirement Property Services Ltd was allowed to apply for ARMA-Q status. Peverel is a company that had bankrolled ARMA since its Incorporation and was to police Managing Agents, such as Peverel.

      It is claimed Peverel pay over half ARMA subscription it receives. They also employ Directors of Peverel at ARMA.

      In an email from ARMA to me, 18 months after I first complained, finally answered my complaints about the Price Fixing.

      From ARMA-Complaint 2.

      In respect of Complaint 2. the Regulatory Panel considered the decision of the Office of Fair Trading dated 6th December 2013 and had the benefit of questioning the witnesses from Firstport Retirement Property Services Ltd.

      Chas Asks:

      How could they ask witnesses from Firstport Retirement as they did not exist as a company in 2009. Peverel CEO informed us all, that no one that was involved in the Price Fixing was still employed by Peverel?
      NOTE was this an admission of guilt from Peverel that ARMA missed?

      ARMA Continued:-
      The Regulatory Panel is of the view that there is insufficient evidence from which it could conclude that Firstport Retirement Property Services Ltd was involved in the prohibited practices identified by the Office of Fair Trading.
      Complaint number 2 is therefore not made out.

      Chas Says:-
      The Panel was reassured that the matter had been fully investigated by Firstport Retirement Property Services Ltd and that the tendering process has been altered and now involves an independent surveyor in the procurement process.

      Chas Says:-

      How can ARMA have questioned witnesses from:-
      Firstport Retirement Property Services Ltd,
      Company No 01614866.

      This is not the same Peverel company that was involved in Price Fixing. The change of names from Peverel Retirement to Firstport Retirement as we were informed, has a different company number. We were informed that the change of name was not a change of company?
      ALSO a recent incident where the independent surveyor accepted a tender from a Painting Company that was 3 times more expensive than the last time it was painted. Since then we had 119 Timber Windows replaced with PVCu and 17 Timber Doors also replaced. This contract has now been shelved after we complained and explained the true cost should be less than previous.

      Peverel Management Services Ltd, Company No 09142759 was the main contractor in the Price Fixing.

      The Company that ARMA claim to have taken to Disciplinary Hearing was Firstport Retirement Property Services Ltd Company No 01614866, how was this the same company?

      Cirrus Communication Services Ltd a Peverel Company was a minor player, yet received star billing.

      • The use of Independent Surveyors was stated by Peverel/Firstport in the ARMA Disciplinary Procedure against Peverel/ Firstport as a reason to show they had learned lessons from the Price Fixing Scams yet:-

        The independent surveyor used at Ashbrook Court was Cunningham Lyndsey, who are Loss Adjusters. We were sent the tender bids for a painting contract that cost circa £10,000 in 2008/09. The three tenders returned were as follows:-

        Pace Painters £25,536 inc VAT – Tendered on 04/04/16

        Ian Grant Ltd £41,427 inc VAT – Tendered on 05/04/16

        PJ Arnold Ltd £41,316 Inc VAT – Tendered on 17/03/16

        Residents complained after checking the tender information sent to us, it was clear that something was seriously wrong.

        •Date for return of tender was not given on the documentation sent to us?
        •The lowest tender had not been fully completed?
        •The two other tenders were circa 39% more expensive than the lowest?

        These three tenders should have been further investigated as something was obviously wrong. The cheapest tender was nearly three times dearer than 2008/09. Since then we had 119 timber windows and 17 timber doors replaced with PVCu, which do not require painting.

        Why was it residents had to point out these discrepancy’s?

        So much for Independent Surveyors, who charge 10% on top of the contract sum. Peverel Retirement made all the technical staff redundant in 2009. Instead of our Management Fees being lowered they stayed the same and we had to pay a further 10%, of all contracts, Great business for Peverel Poor business for residents.

        We were informed by Peverel/Firstport that the cost to oversee the contract would be £3,309.50 subject to lowest tender being selected. The cost sent to us by Cunningham Lyndsey Total Fee was £3,123.12.

        The cost of Independent Surveyor from Peverel/Firstport was £3,309.5 showing a further 6% added for what???

  2. 10/06/2016 chas posted on CARLEX:

    Would a parting shot from the Rt Hon Keith Hill, regulator of ARMA be poised to make Firstport Retirement as a fit and proper candidate to join their association as an ARMA-Q Member?.

    Firstport Retirement, prior to 2015, was known as Peverel Retirement and was the trade name for Peverel Management Services Ltd. They were the country’s largest Property Manager, who were mired in controversy for many years, for cheating Elderly Pensioners at Retirement Developments. It is disgrace and should be challenged further.

    Pity the good Managing Agents who will now be in the same club as Peverel/Firstport who are still no better than they were before the name change.

    • The Peverel Management Service Ltd who provided the 65 development’s for Cirrus Communications that colluded with 3 subcontractors is not the same company that was mentioned by ARMA in the Price Fixing Scandal complaint.

      We had been informed by Roger Cooper, the late Area Manager that Peverel Retirement had changed its name to Firstport Retirement.

      If this is the case, the company number of Peverel Management Services Ltd, would be the same number as Firstport Retirement that ARMA stated there was insufficient evidence against, wouldn’t it???

      • Michael,
        Companies in the UK – similar to Companies House shows,Peverel Retirement Ltd a company that was supposed to be Dormant is showing as Firstport Retirement Properties Ltd?
        Check:-

        PEVEREL RETIREMENT LTD

        QUEENSWAY HOUSE
        11 QUEENSWAY
        NEW MILTON
        HAMPSHIRE
        BH25 5NR

        Web: http://www.peverelretirement.co.uk
        Classification:
        Management of real estate on a fee or contract basis

        Peverel Retirement is the expert in the management of retirement properties across the UK.

        Previous Company Names

        PEVEREL MANAGEMENT SERVICES LIMITED

        Phone: 0845 634 8751

        Legal Information
        Registered Name:

        FIRSTPORT RETIREMENT PROPERTY SERVICES LIMITED
        Company Registration No.:01614866

        Incorporation Date: 17 Feb 1982 (34 Years old)

        Capital:- £908,450.00 on 6 Jun 2016

        DIRECTORS
        Nigel Howell
        1 Apr 2014 ⇒ Present ( 2 Years ) Director
        Ouda Saleh
        1 Jul 2015 ⇒ Present ( 1 Year ) Company Secretary
        7 Jun 2013 ⇒ Present ( 3 Years ) Director

        Charges / mortgages against this Company
        THE ROYAL BANK OF SCOTLAND PLC OUTSTANDING on 20 Oct 2014

        Can this be checked?

  3. ARMA decides that cheating of circa 2000 Retired Pensioners in 65 Retirement Developments, where they are forced to pay £1.4 Million Pounds for works that was not necessary is acceptable.

    This is when a major contractor Peverel Management Services Ltd (PMSL) trading as Peverel Retirement now Firstport Retirement uses a subsidiary company Cirrus Communication to Price Fix Tenders over a 5 year period.

    The Office of Fair Trading (OFT) were aware that PMSL were the instigators of the Price Fixing, not Cirrus Communication as ARMA seems to intimate. A CEO/ Director of The Peverel Group also confirmed this.

    A decision of 6th December 2013 on Price Fixing, was sanitised as Collusive Tendering, in laymen’s terms is Fraudulent Behaviour. It seemed to have been condoned by the OFT, in their 3 year investigation costing the Tax Payer £500,000 and Peverel and Cirrus escaped Scot Free.

    The ARMA Panel took the view that there was Insufficient Evidence from which it could conclude that Firstport Retirement Services Ltd (FPRS) was involved in the Prohibited Practices identified by the OFT and the complaint was, therefore, not made out?

    Firstport Retirement did not exist in 2005 to 2009 and was only Incorporated in March 2015. Why did ARMA identify a name FPRS and say there was Insufficient Evidence. The name of the Price Fixing Company was Peverel.

    The OFT not only found Peverel Guilty of the 65 Cheated Developments, but also The Peverel Group CEO/Director agreed that the 65 was the tip of the Iceberg and claimed that many more were Price Fixed. “The Panel was reassured that the matter had been thoroughly investigated in house by FPRS and that the tendering process had been altered and now involved an independent surveyor in the procurement process.”

    Here at Ashbrook Court the Regional Manager SG has been forced to scrap the External Painting Contract only this week, after we resident pointed out that the tendering undertaken was flawed. Not only was the lowest tender circa 300% more than the last time it was painted. On checking the detailed items that were to be filled in a section 4.00 Schedule of Works was priced in total and not individually. This failed to comply as the SoW Ref items 4.01, 4.02 4.03 each had a different Description and was not individually priced and was to be read in conjunction with an attached System Code, which was missing.

    These tenders were administered by an Independent Surveyor atached from Cunningham Lindsey, who failed to notice the lack of itemised pricing.

    ARMA, so much for Firstport and the Independent Surveyors in the Procurement Process.

  4. This was sent to me on 22/06/16 – 18 months after I complained???

    ARMA INDEPENDENT REGULATOR & REGULATORY PANEL

    PUBLICATION OF DISCIPLINARY DECISION

    Case No 2015 (1) Firstport Property Services Ltd

    Organisation Firstport Property Services ltd

    Regulatory Panel Right Honerable Keith Hill (Chairman), Alun Jones,Alan Walker
    Clerk to the Panel: Jane Forsyth.

    DECISION

    Firstport Retirement Property Services Ltd appeared before the Regulatory Panel in connection with its wish to apply for ARMA-Q accreditation and ARMA membership.

    The Regulatory Panel considered complaints concerning the:

    1) Sale of development managers’ flats

    2) Office of Fair Trading (OFT) decision, reference CA98/03/2013 dated 6th December 2013, on collusive tendering and

    3) Failure to deposit transfer fees at Hillside Court, Ormskirk

    Complaint I.

    In respect of Complaint I. concerning the sale of housing/development managers’ flats, the Regulatory Panel considered a range of concerns and found Firstport Retirement Property Services Ltd in breach of Byelaw 2.7.10 (see below) in the case of Mere Court in 2013, in relation to a failure to disclose an interest in the ownership of the flat and in payments made to individuals associated with this transaction.

    The Regulatory Panel notes that Firstport Retirement Property Services Ltd has made significant improvements in the information now provided to the leaseholders. The Panel recommends that full disclosure of financial interests should be made in future and also the possible resulting reapportionment of leaseholders’ responsibilities for making financial or other contributions.

    Bye-law 2.7 STANDARDS OF SERVICE WHICH ARMA MEMBERS AGREE TO OFFER THEIR CLIENTS: Members must:

    27.10 disclose in writing to relevant parties any existing conflict of interest or any circumstances which are likely to give rise to a conflict of interest;

    Complaint 2.

    In respect of Complaint 2. the Regulatory Panel considered the decision of the Office of Fair Trading dated 6th December 2013 and had the benefit of questioning the witnesses from Firstport Retirement Property Services Ltd.

    The Regulatory Panel is of the view that there is insufficient evidence from which it could conclude that Firstport Retirement Property Services Ltd was involved in the prohibited practices identified by the Office of Fair Trading. Complaint number 2 is therefore not made out.

    The Panel was reassured that the matter had been fully investigated by Firstport Retirement Property Services Ltd and that the tendering process has been altered and now involves an independent surveyor in the procurement process.

    Complaint 3.

    In respect of Complaint 3. concerning the failure to deposit transfer fees, the Regulatory Panel finds the company in breach of Byelaw 2.2.2 (see below) in the case of Hillside Court, Ormskirk in relation to compliance with the terms of the lease. The Panel notes that full restitution has taken place with interest, although the Panel is concerned at the speed with which the complaint was addressed. The Panel is reassured by the measures now in place to prevent, to the greatest extent possible, a repeat of such an error.

    Bye-law 2.2.2 To manage the client’s property in compliance with al/ the current applicable legislation, terms of leases, contract documentation and good business practice.

    Sanctions
    In light of the above determination, the Regulatory Panel shall issue a letter of admonishment to Firstport Retirement Property Services Ltd.
    The Regulatory Panel directs that Firstport Retirement Property Services Ltd shall be liable for the costs of the case, to be determined by the Regulatory Panel unless otherwise agreed.

    Signed………………………….

    Right Honerable Keith Hill, Independant Regulator

    Telephone 020 7978 2607
    Email jane@arma.org.uk

  5. Annexes 2

    Precis from the Extract of the OFT’s Decision
    Paragraphs 5.8 and 5.9:

    ‘During the course of the Investigation, the OFT has also considered whether the Infringements were wider than found in this Decision and involved collusive tendering in relation to more of or all the Peverel Management Services Ltd contracts involving Cirrus Communication and either O ‘Rourke, Jackson or Owens between 2005 and 2009.

    Peverel Group Ltd informed the OFT that, at least from late 2006, it was of the view that there was collusive tendering in respect of every such contract. This would mean that a substantial larger number of bids would have been the subject of anti-competitive behaviour than is found in this Decision.

    However, following a careful review of all the relevant evidence and while it continues to have reasonable grounds for suspecting an infringement of the Chapter / prohibition in respect of a number of the contracts failing outside of the Infringements,

    The OFT’s conclusion is that there is insufficient evidence to make infringement findings of that scope and that further work would be required before a clearer conclusion could be drawn in respect of these bids. The OFT has decided that it is not an administrative priority to carry out further work.

    Chas Says:

    The 65 developments owned up to by Peverel Group only included those put forward by Peverel Group Ltd. It did not include any development’s where the Area/Regional Managers were still working for Peverel as they could not risk having to sack those that were aware of the total Price Fixing.

    OFT Continued:

    The OFT has concluded that the scope of the Infringements should be confined to those contracts in respect of which there is evidence that Cirrus did, in fact, disclose its bid to either of O’Rourke, Jackson or Owens and that either of O’Rourke, Jackson or Owens participated in collusive tendering. In the latter regard, the OFT has considered whether the bidding process might have been corrupted in some way by behaviour other than collusive tendering. To exclude that possibility, the OFT has included within the Infringements only those contracts in respect of which there is evidence that Cirrus did not act alone and either of O’Rourke, Jackson or Owens was contacted and did participate.

  6. I would like to take this opportunity to thank LKP, Carlex, About Peverel, Peverel Action and The Truth About Solitaire, who each provided a platform for us to openly challenge Peverel Retirement on all the scams that brought in more and more money needed to pay interest on loans, including mortgages on House Managers Flats (HMFs).

    At Mere Court residents were about to be balloted on the removal of The Residential House Manager (RHM). The residents were wrongly informed by Peverel Retirement/Firstport Retirement by the AM, that the manager’s flat belonged to the freeholder. In fact, it belonged to Peverel, whose Area/Regional Managers would have been paid commissions following a successful sale of the flat. The flat would have have been released by forcing out existing RHM. The AM, SW was later forced out by other Senior Manager CC, who herself was later forced out as well.

    The findings in the ARMA Report regarding Mere Court payments when the HMFs were sold,shows the Area/Regional Managers were well informed and colluded in what had to be said if asked, regarding the ownership of these flats.This collusion and fabricated of information was not in isolation and was instigated at Senior Levels as was the other many scams which are now being looked at more closely.

    How many Flats and how much money changed hands in this scam?

    • Michael Epstein says:

      It is believed the commissions paid to Firstport Staff that persuaded residents to agree to a sale (sorry that should be contribution to reflect the extra workload resulting from the process of selling the house managers flat) were as much as 2,500 pounds.

  7. Michael Epstein says:

    Of course the sale of House Managers flats was not the only scam. Let us not forget the notional market rents that residents were charged for the house managers flats, which when challenged were reduced by up to 50%!