After more than three months of deliberation, the Rt Hon Keith Hill, regulator of the Association of Residential Managing Agents, is poised to make a decision on whether Peverel / FirstPort Retirement is a fit and proper candidate to join the association.
Alex Ellison, and others, made a series of complaints concerning Peverel / FirstPort Retirement.
Her complaint concerned Peverel / FirstPort Retirement’s unaccounted for portfolio of house managers’ flats – a communal asset under most leases – and the company’s misleading attempts to sell them.
There was a hearing more than three months ago and Mr Hill, who is stepping down from his role as ARMA regulator, is poised to publish his decision.
A full account of the complaint is here
Throughout its history Peverel / FirstPort, the country’s largest property manager, has been mired in controversy.
It is the only property management company that has been subject to an Office of Fair Trading ruling of collusive tendering, where it was upheld that its subsidiary Cirrus has systematically cheated pensioners at 65 retirement sites.
Nigel Bannister, the then chief executive of Peverel told the Times on November 7 2009:
“People are reading a conspiracy into a problem that isn’t there. We use Cirrus because it is an excellent service.”
Within weeks Peverel admitted to the OFT that its subsidiary Cirrus had been winning tenders to fit electronic doors after a bidding process involving stooge companies.
Carlex wrote the following opinion piece in March:
Alex Ellison deserves huge credit for persisting with this complaint. She has done so for no financial gain, but as a concerned citizen.
She believes that vulnerable pensioners have been on the receiving end of corporate financial engineering, where huge profits have been mined out of residential freeholds.
At one point Vincent Tchenguiz boasted of owning one per cent of the residential freeholds in the UK.
But by breaking up the assets, over-valuing the fragments, obtaining gearing from banks – which taxpayers are still bailing out – Tchenguiz became one of the most important corporate players in the UK.
Before the crash in 2008, he and his brother Robert were bidding for the Sainsburys supermarket chain.
During the recession, the house of cards came crashing down, and in March 2011 the brothers were arrested by the Serious Fraud Office in a botched investigation. They won a judicial review into their wrongful arrest.
The police investigation prompted the banks to put Peverel into administration, from which it was rescued by venture capitalists Electra and Chamonix, with a loan secured against its property assets, including the house managers’ flats.
In almost all cases, these flats have leases created in 2009, even though the retirement flats were built years before.
What is unexplained is why Peverel / FirstPort ended up owning these flats. If they are a communal asset of a retirement site, as many legal authorities believe, should they not be handed back?
Should banks be lending to the company on the security of assets such as these?
At the very least, Peverel / FirstPort should make clear to the ARMA regulator – and to the wider public, for that matter – its legal opinion why it is right that the company owns these assets.
This is not a matter that is going to fade away, and in time it will unravel. The argument of the chief executive of FirstPort that these issues are “historic” is feeble.
This week Carlex was contacted by residents at Crown House in Melksham, Wiltshire. Built in 1988, a lease mysteriously appeared for the house manager’s flat in 2009; a year later the flat was sold.
But Peverel spent the residents’ contingency fund, it is claimed, to pay for new windows at the flat before the sale. Now they want £4,000 back. Carlex will shortly raise this issue with FirstPort.
Then there are other issues that may concern the ARMA regulator.
For example, the Office of Fair Trading’s finding of collusive tendering by Peverel’s subsidiary Cirrus in December 2013.
For five years the company was systematically ripping off pensioners at retirement sites managed by Peverel Retirement.
Those in ARMA with longer memories will recall the residential side of Peverel being fined the then maximum £2,500 in 2010 for failures in their accounting and management practices.
Peverel had to undertake an independent audit of its systems, and its then CEO had to write to every ARMA managing agent apologising for the company’s behaviour.
Under the circumstances, the ARMA regulator may well conclude that Peverel / FirstPort Retirement is altogether too complicated a prospect to be admitted to membership of the trade body.