April 28, 2017

ARMA humiliates FirstPort over house manager flat sales

Please follow and like us:

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