June 28, 2017

ARMA regulator to rule on whether to admit FirstPort Retirement ‘within days’

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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 believes that Peverel / FirstPort Retirement should not be admitted to ARMA

Alex Ellison believes that Peverel / FirstPort Retirement should not be admitted to ARMA

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.

Comments

  1. 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, and had been mired in controversy for many years.

    Peverel Retirement are the only Property Management Company to be subject to an Office of Fair Trading (OFT) ruling of Price Fixing and Collusive Tendering during the period 2005 to 2009. It was upheld that its subsidiary Cirrus Communications, (now Appello Healthcare) and Peverel Retirement had systematically cheated circa 2,000 pensioners at 65 retirement sites, where they updated Warden Call and Fire Systems, after providing false information to the residents stating that “their systems were obsolete.”

    Firstport Retirement applied for ARMA-Q over 15 months ago and to-date they had been refused, not even allowed as an Associate Member. Nigel Bannister, then Chief Executive of Peverel Group ltd informed The Times newspaper 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 Communication had been winning tenders to Up-date Warden Call and Fire Systems, involving stooge companies, including Price Fixing, and Collusion.

    Firstport Retirement should never be allowed to join ARMA-Q until all the Historic Complaints are corrected and the truth behind the Price Fixing, naming the Directors and Senior Management that condoned this Collusive Tendering.

  2. Michael Epstein says:

    From the Firstport website:
    When a formal tender process is necessary, we invite at least three independent contractors(THE ONLY EXCEPTIONS TO THIS ARE OUR OUT OF HOURS MONITORING AND SOME FIRE SYSTEMS AND ALARM INSTALLATION WORKS WHERE A FIRSTPORT CONNECTED COMPANY MAY BE INVITED TO TENDER
    In other words that means residents are forced to use the Firstport owned Appello(previously known as Cirrus) who admitted to the price fixing fraud carried out against vulnerable residents.

    • Michael, it says “MAY BE INVITED TO TENDER”

      Peverel Retirement now Firstport Retirement tender for each Warden Call and Fire System so the wording MAY is in-correct and misleading. This is typical of the both companies who produce false comments in their advertising.

  3. Michael Epstein says:

    It does seem rather a shame, that other contractors are not invited to tender for monitoring systems.
    There are many reputable firms that provide this service at a much more competitive price.
    Indeed some developments that have exercised a Right To Manage have stayed with Appello after being offered discounts of up to 30%.

  4. Michael Hollands says:

    So the Regulatory Board is at last going to come to a decision on First Port.Retirement. Were they not still called Peverel when the application to join Q was made by Janet. Their 100,000 or so residents have waited for far too long.
    Let’s hope that if they are accepted they have been persuaded/forced by ARMA to compensate fully for all their past offences against their residents and have completely revised their policies so their residents are treated fairer and there will be no reoccurance
    If this is the case then I would congratulate the Board and ARMA
    If they have been refused membership because of their activities then I would applaud ARMA for standing firm.
    If membership is given without any reform or compensation it will be a serious stain on ARMA and their Regulatory Boards reputation and I would think of major concern to many of their existing members.
    It could mean the start of their demise.

    • Michael Holland, I agree with your premise that If membership is given without any reform or compensation it will be a serious stain on ARMA and their Regulatory Boards reputation and I would think of major concern to many of their existing members.

      Only to-day 3 residents asked what can be done with Pev/Port as the new Area Manager is not contactable only by third party. He refuses to give his phone number or any contact details where we can contact him.

      The painting contract at Ashbrook Court has seen 3 contractors tender and the difference between them is signicant and shows a failure of named contractors who did not want the contract.

      The 3 tenders show incorrect difference of £13,150 and £13,293, where the VAT on the latter is given as £6,573 which is incorrect as 20% of the figure given should have been £6,914.60

      Firstport Retirement have not changed, they send out letters with an Area Managers name who left 2 months ago and incorrect figures, signed by Samantha Gibson Regional Manager.

      • Michael Epstein says:

        When asked for a schedule of works connected to a second Section 20 notice for decorations that are nearly 4 years late, I was sent a blank form in the name of Richard Carpenter who had left Peverel/Firstport around 8 months previously!

      • From my last posting on June 11th, I believe that I should have made it clearer, so here goes:

        The 3 tenders for the External Decoration at Ashbrook Court, including VAT, are as follows:

        •Pace Painters £25,536
        •PJ Arnold £41,316
        •Ian Williams £41,817

        As you can seen the difference in the tenders are:
        •PJ Arnold £15,780
        •Ian Williams £16,281

        As can be seen this is:
        •38% more expensive from PJ Arnold
        •39% more expensive from Ian Williams

        This third letter corrects the previous two letters which had the wrong name of the Area Manager and wrong VAT amount for Ian Williams.

        We are also informed that we will have to pay an Independent Surveying Company (no name given.) 10% for the company to oversee the contract. The figure given is £3,309.50, which is not 10% of £25,536, is it?

        It also states that observations of the estimates, (not tender) must be made within the consultation period of 30 days from the 10/06/2016. It then gives the date as 20/07/2016, which is a further 40 days?

        The first letter dated 31/05/2016 also states that any queries must be direct through our Development Manager. Our development Manager left in March 2016?

        What a sharade.

  5. Ged Walsh says:

    I would just love anyone with a backbone in our management team who can make and fore fill and keep statements and promises at Arkle Court as for who is the present Area Manager here I just know or care.

    As for ongoing structural faults deffects,ongoing roofing problems cleaning painting ,requests and enquiring about improvements I just email regional manager Samantha Gibson or everyone higher and copy in Fairhold Homes no4 McCarthy & Stone and as many media outlets as I can hoping for assistance and publicity.

    The response from any FirstPort McCarthy & Stone or FairHold Homes senior manager is always factless amusing and a waste of time that is if they answer!

    I am sorry but I can not see anything changing I like my neighbours and living here it’s the way we are treated like tenants in rented accomadation by all the management team

    I am past caring or worrying but have kept all our past complaints issues and events that have caused anxiety and concerns are on record.

  6. Michael Epstein says:

    Should ARMA decide to give associate or full membership to Firstport Retirement, they are running a real risk to the future of ARMA themselves.
    The question of the Cirrus price fixing has been raised. Under its new name Appello it is still being run by Andrew Davey, the head of Cirrus during the price fixing.
    Yet the Firstport website makes it clear that for warden call/alarm systems Firstport will not invite other tenders, forcing residents to use Appello. Surely that cannot be at accord with the tenets of ARMA-Q?
    Apart from the very questionable circumstances that led to Firstport owning the leaseholds of the house manager’s flats, there is also the question of Firstport misleading residents over the ownership of the flats, and not declaring their financial interest in persuading residents to remove house managers from their developments. Nor were any commissions declared by the area managers.
    That fundamental decisions were taken purely on a majority vote, without the lease being amended has left residents with the ridiculous position that service charges cannot be lawfully demanded of the new leaseholder of the old house manager’s flat.
    It will be very damaging to ARMA for these issues to resurface after they have accredited Firstport.

    • Michael Hollands says:

      At least an acceptance of First Port by ARMA will mean complaints, such as you list, can be made to them.
      After the fanfare and celebrations of entry ARMA could have some serious complaints to consider.
      I notice that ARMA has taken action against four members since 2013.
      The penalties have been one fine, two letters of admonishment, and one company has been forced to apologise. They do not seem much of a deterrant.
      I wonder what the penalty for Price Fixing would have been. Maybe expulsion?
      Having said that I doubt very much that Lord Hill would have willingly awarded membership.
      It seems strange that he should be leaving when this possibility has finally arrived after over 20 months.
      It was in September 2014 when Janet first made her announcement.

    • Michael, your comments: Should ARMA decide to give associate or full membership to Firstport Retirement, they are running a real risk to the future of ARMA themselves.

      Surely ARMA have already done untold damage to their own organisation, in taking over 18 months to consider the facts. Residents have complained to ARMA and never received answers, only confirmation that they have been received. The lack of response and types of complaints made about Unacceptable Behaviour of Peverel Retirement, over the past 11 years, warrant a clear decision not to allow Firstport Retirement any form of membership whatsoever.

      It could be that ARMA expected the problems would be forgotten over time, not realising the amount of damage that had been done. The Price Fixing and the selling of House Managers Flats when they didn’t own them or giving false information so they could sell them has not been resolved.

      The question of the Cirrus Price Fixing also has not been resolved. Under its new name Appello Healthcare it is still claiming that Warden Call & Fire Systems are Obsolete. They may be dated, but work. Instead of being honest and stating the truth. Area Managers still use the wording Obsolete, instead of needs updating.

      Appello is still being run by Andrew Davey who was the Head of Cirrus Communication during the Price Fixing Scandal, and later made a Director at Peverel. The Firstport Website makes it clear that for Warden Call/Fire Alarm Systems Firstport will not invite other tenders, from other specialist contractors. During the five years that Price Fixing was rampant the only contractors they used were Subcontractors who already worked for them and had agreed to supply bogus tenders so Peverel and Cirrus would benefit. Surely that cannot have been an acceptable way to do business.

      How can ARMA even consider allowing membership with all the outstanding complaints unresolved. The only changes seen has been in the name change from Peverel Retirement. It can be seen at Companies House, previous name for Firstport Retirement was Peverel Management Services Ltd, which shows incorporation in February 1982. How can that be, when the name Firstport Retirement was only changed in February 2015.

      • Michael Hollands says:

        Charles, I agree, how can ARMA possibly allow membership with so many serious complaints unresolved.
        We can only hope that ARMA are going to force a full resolution of all complaints as a condition of membership.
        If they can do that, good on them. If this is not the case then they would face serious consequences.

  7. Michael Epstein says:

    ARMA, do have a problem.
    If they admit Firstport Retirement on the basis that the problems were “historic” that should mean they can’t really have Freemont Property Managers as associate members of ARMA? After all, ARMA’s judgement would be that the “historic” issues were with a previous management. And that previous management just happens to be the current management of Freemont Property Managers!
    Of course, if ARMA decide that Firstport Retirement are not fit to be admitted, what then of the position within ARMA of Sue Petri?
    I bet Keith Hill couldn’t wait to get away!

    • Michael,
      You say if ARMA decides that Firstport Retirement are not fit to be admitted, when surely after 18 months cogitating and no membership forthcoming, the correct decision was not to even allow them Associate Membership.

      Sue Petri is a Firstport Director and also works for ARMA. No wonder Firstport Retirement and other ex Peverel companies have been excluded from membership. Yet the Firstport company’s that have been given ARMA-Q have same Directors as Firstport Retirement, who have been refused membership?

  8. Michael Epstein says:

    Should it ever be that Firstport are obliged to reveal their management agreements, one can only speculate as to what ARMA may think of that part of the agreement that permits Firstport to keep for their own use any excess they may receive as a result of any bulk purchase rebate?

  9. Michael Epstein says:

    I suppose I should not succumb to conspiracy theories, but could it be that some people would like to see ARMA fail, as in their eyes it would bring about primary legislation that would help to protect leaseholders.
    Certainly one way to fatally undermine ARMA would be to wait until Firstport Retirement are accredited by ARMA and then reveal much more information concerning the operation of Firstport that has yet to be disclosed.?

    • Michael Hollands says:

      Or take it as a complaint to the ARMA Regulating Board. It could amount to anything from a slap on the wrist to expulsion.
      But first the complaints would gave to go through the Company’s complaints system ( they are allowed 8 weeks to sort it) and then the Ombudsman.
      By then ARMA will have a new Regulator in place.

  10. Michael Epstein,

    The obligation to disclose their managing agent service agreement and the bank account statement for your service charge money is revealed in a LEASE free guide No.14 at lease-advice(dot )org( dot)uk

    Just read thru section on further information on service charges and note it says if you are not given access, it becomes a criminal offence.

  11. Michael Epstein says:

    Ollie,
    Does it say anything about a “Broader document that contains commercially sensitive information?”

  12. This is what it says.

    You have the right, within 6 months of receiving a written summary of costs, to require the landlord to provide you with reasonable facilities to inspect the accounts, receipts and other documents supporting the summary and for taking copies or extracts from them.

    The legislation does not say such information is commercially sensitive because its a record of your money was spent , you are paying the management fee and you have the legal right to see all the documents supporting the summary.

  13. You can also back up your right to access and inspect all documents by quoting Fraud Act 2006
    Section 3 – Failing to disclose information..