June 24, 2017

Cabinet minister condemns ‘monstrous’ companies as prime riverside site ousts freeholder

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Charter Quay: the epic trailer

Charter Quay with Ed Davey speech

Sebastian O’Kelly writes: Although not a retirement site, but an affluent Thames riverside development, Charter Quay has gained a knowledge and experience that has already benefited hundreds of leaseholders elsewhere in their unequal disputes with the companies that prey upon them. And Energy Secretary Ed Davey’s speech yesterday was the most hard-hitting ever made by a senior politician (second YouTube video).

The residents of Charter Quay in Kingston were in full celebration yesterday having bought out the Tchenguiz interests at the site and sent the controversial freeholder packing.

A 30-strong choir sang uplifting songs extolling freedom, bunting with the different national flags of the residents flew from the balconies and local LibDem MP and Energy Secretary Ed Davey poured out Pol Roger champagne from an outsized ‘Balthazar’ bottle.

Choir

A plaque was unveiled celebrating Charter Quay’s epic campaigns against the “monstruous companies” that managed the site, as Davey described them. These include Peverel, which managed the site of 239 flats, five town houses, restaurants and commercial premises when it was under Tchenguiz ownership.

Buying the head lease off Tchenguiz has cost the residents at the high-end riverside complex £900,000 – it is on the Tchenguiz books valued at £3.2 million.

But in four tough Leasehold Valuation Tribunal rulings Charter Quay residents have won back more than £500,000.

In a speech to the residents, Davey gave fulsome praise to Martin Boyd, chairman of the Charter Quay Residents’ Association and co-director of LKP, as well as his predecessor as RA chairman, Derek Winsor.

“They were forensic in detail and they were so good I almost felt sorry for the Tchenguiz brothers. They did not know what they were taking on.”

Crowd

Sir Peter Bottomley, who could not attend owing to family commitments, offered his congratulations to the residents.

“Parliament, government departments with the courts and the Leasehold Valuation Tribunal should learn the lesson.

“The law is not working the way it should.”

Both politicians are determined to raise the issue of the Peverel price-fixing scandal in retirement developments for which the Office of Fair Trading, after a three-year investigation, is offering immunity from sanction on the questionable grounds that the property manager turned itself in.

This issue is now being raised with the prime minister, who has experience of the Tchenguiz / Peverel modus operandi in his own Whitney constituency.

Attention now focuses on the price paid for the site: £900,000 – which is the established open market value – is only 28 per cent of the value on the Tchenguiz books.

Heavily indebted to taxpayer-owned banks, the Tchenguiz portfolio, built up over the last 20 years, amounts to 250,000 freeholds, or one per cent of all the residential freeholds in the country.

Balconies

They have been on sale for more than a year at £3 billion, and borrowing against them saw Tchenguiz become one of the leading businessmen in the country, at one point poised to takeover Sainsbury’s.

Many of the freehold assets – such as the head lease at Charter Quay – were sold off by the high-end Berkeley Group, while others were bought from retirement developer McCarthy and Stone, Barratt and Kirklees council, which sold off the freeholds of Huddersfield in the 1990s.

Charter Quay’s purchase of the head lease concludes a series of acrimonious disputes that have seen the Tchenguiz companies pay back more than £500,000 in wrongly demanded service charges.

Cabinet minister and local MP Ed Davey, second left, with the residents' chosen property manager Alan Coates, left, and past and present Charter Quay Residents' Association chairmen Derek Winsor, second right, and Martin Boyd, right
Cabinet minister and local MP Ed Davey, second left, with the residents’ chosen property manager Alan Coates, left, and past and present Charter Quay Residents’ Association chairmen Derek Winsor, second right, and Martin Boyd, right

In the last of four Leasehold Valuation Tribunal rulings in November 2011, the court condemned the conduct of the Tchenguiz management company County Estate as “disgraceful”. Management fees had been loaded, contracts had been doled out to other Tchenguiz-owned companies and the cost of the insurance had been padded.

Terms such as  “glaring failure” and “unacceptable behaviour” appear in the judgment, and the tribunal dismissed the obfuscated company ownership structure of the Tchenguiz Family Trust, ultimately based offshore, as “quasi Biblical”.

The disputes at Charter Quay have echoed those at other prime London sites, such as St George’s Wharf where residents, who have included Sir John Major and Chelsea Clinton, received £1 million in a settlement of their disputes over service charges.

Peverel is the largest property manager in the country and was bought by Tchenguiz in late 2006. It was placed into administration after Vincent and Robert Tchenguiz were arrested by the Serious Fraud Office in March 2011.

The arrests were based on incorrect evidence and the brothers are now seeking £300 million compensation from taxpayers.

Sir Peter Bottomey, MP for Worthing West, told the Commons in April: “I would have thought that a handshake and an apology would solve that.”

“A whole series of other issues should, I believe, be fully examined under parliamentary privilege.”

Photographs: CQRA Limited

Comments

  1. IF ONLY… At the time Charter Quay was being constructed I was living in a house on an upmarket private estate Kensington Gardens, Kingston overlooking the Thames and immediately opposite CQ and the Rose Theatre. If only I had waited a little longer until the building was nearing completion and not taken a hasty decision to sell up and move here. It was a huge mistake and I have regretted it ever since. And I blame the NHS for not providing proper medical care at the time that indirectly forced me to move…

  2. The Guardian Newspaper Money Section ( 13 july2013) also congratulated the Charter Quay Residents for claiming back 0.5 Mil in overcharged Service Charges and being successful in buying the Headlease for 0.9 Mil pds when it had been over valued at 3.2 Mil pds by the VT.

    I wonder if Lloyds Bank Loans ( or Bank of Scotland ) are wondering if they have made huge loans to VT secured on freeholds which are worth much less.

  3. Michael Epstein says:

    To all at Charter Quay,
    Congratulations for all you have achieved, and my best wishes for the future.
    You have fought one of the most tenacious campaigns ever conducted by leaseholders against freeholders.
    You have never given up, no matter what the setbacks, nor have you decided as some others have, to reach a”discreet ” settlement. More importantly, be it for those living at Charter Quay, or those living in retirement developments or those living in the humblest of flats, you have fought for them.
    You have shared information that other leaseholders could never have access to. You have shown others what is possible and how to make it possible.
    Every leaseholder in the UK is very grateful to you.
    As you celebrate, we celebrate with you.
    Ladies and Gentlemen,
    The toast is, CHARTER QUAY!
    PS Fleeced,
    “If only” is the most useless phrase in the English language. But if you hadn’t moved to where you now are, your fantastic role in holding Peverel to account may not have happened! I don’t suppose news of Charter Quay could be put on your notice board could it?

    • Ed Davey visited me in my home. I was ripped off tens of thousands of pounds there too by cowboy builders who left the house like a bombsite – just like you see on the box – and Trading Standards failed to prosecute them. I thought if I buy a brand new property I could escape cowboy builders for good but, unfortunately, they were here as well as I soon discovered…

      Yes, if only! Charter Quay has done a great job that could lead the way for the rest of us trapped in the leasehold nightmare. A fight with Peverel isn’t something any of us would choose to do particularly for those of us not in good health.

      Peverel hasn’t returned the £1137.47 so far – thankfully – but if they do continue harassing/threatening me over the service charge/ground rent payments for being ‘in arrears’ I will fight it out in court. Hoping they’ve backed down and seen sense at last. Phew.

  4. OMhostage says:

    To Charter Quay owners, THREE CHEERS! Wonderful job.

    It would be good to imagine that when the history of the end of leasehold is written that this will be a seminal event, but I am not sure it will happen soon. There are powerful forces opposed to it, some of which are large donors to the Conservative party. Not enough of them are people with the obvious integrity of Sir Peter Bottomley.

    I’ll be interested to see you document the service charge to flat value ratio in coming years and if you convert to commonhold (that would be another beacon to the rest of the country).

  5. CONGRATULATIONS ALL ROUND !! You are an inspiration to all of us.

    Thank you for all your sterling work, and for sharing it so others can benefit too & follow in your footsteps.

  6. Hi Susan says,
    You have been part of the sterling work and been an inspiration to us minor players, you also should share in the congratulations.

    Well done Susan Wood, Susan could, Susan did?

    Chas

  7. A Reviewer says:

    Hi all

    Valued at £3.2 million, sold for £0.9 million.

    Allowing for about a 20% fire sale discount – may be £1.1 million.

    So how did the valuation get multiplied by three ?

    No bank is going to take a bland “bought it for a mill, will sell it for three times that”. They would want to see a valuation report.

    Enter “tame” surveyor with the magic initials “RICS” … The Royal Institute of Chartered Surveyors.

    I think it is time that the RICS stables got cleaned …. see here
    http://en.wikipedia.org/wiki/Labours_of_Hercules#The_labours

    we ARE making progress … have we got to No 5 ?

    or are we at Labour No 1 and the valuation side of the RICS should be abolished ?

    happy days may be approaching !

  8. OMhostage says:

    It was a subprime fantasy. Just as the rating agencies got paid to rate rubbish mortgage backed securities and did so, Oliver Wyman was paid by Tchenguiz and co. to justify inflated valuations based on the monetisation of everything imaginable, including exit fees in the retirement sector, permissions of every kind, even keeping pets, elsewhere.

    The difference between the price paid and book value represents the difference between the monetised ground rount (possibly with some improvement value added) and what Tchenguiz hoped to extract in the form of additional profits via his managing agent, as well as the farrago of fees: late payment of ground rent, that’ll be £45 thank you very much (a nice little earner that one), subletting “registration” etc.

    Monstrous scams by a set of monstrous companies.

  9. Michael Epstein says:

    At the time all this was happening, banks through all caution to the wind and on the wings of huge bonuses for writing business and gaining market share, it was thought provided property increased in value, the freeholders and the banks would make a large profit, provided the leaseholders continued to pay up whatever was demanded, no questions asked?
    A few years ago, i wrote that the Tchenguiz/Peverel empire was like Candy Floss (though not as sweet and not as good for you). It may appear large, but there is no substance too it.
    Which ever way you do the sums, the actual asset value is around 1/3rd of the money borrowed against it.
    Worse is that Tchenguiz has lost the income that helped towards paying his interest on the loans.
    For Price Fixing Peverel, they are losing the developments they need to pay their debts.
    Perhaps Miss Entwistle would care to enlighten us all on the price fixing (in case you didn’t know Miss Entwistle, that is FRAUD)? Perhaps it is coincidence, that at around the same time the price fixing investigation came into the public domain, credit agencies changed both Cirrus and Peverel Management Services (Peverel Retirement).
    Miss Entwistle, please be advised, when you are CEO of a company such as Peverel, a lot can happen when you are filming another load of bullsh*t about customer service!

  10. Michael Epstein says:

    Apologies for the typo, I meant “Threw, not “Through”

  11. A Reviewer says:

    Hi

    I recommend a look at http://www.oliverwyman.com.
    The headline banner is Managing in an Age of Earnings Uncertainty.

    Ouch.

    Question: Who has guaranteed income ?
    Answer: Pensioners and those on benefit.

    Question: Who is the most reliable target market ?
    Answer: as above !

    happy pension pay day.

    possible apologies to the valuers ?

  12. Michael Epstein says:

    It is just possible that given the trouble Charter Quay was causing Tchenguiz/Peverel, it was decided that it would be better for Tchenguiz/Peverel if Charter Quay left them to stop further damage being done.
    It is also very probable that key to the Quay settlement for Tchenguiz/Peverel would have been a confidentiality clause (which so many other developments accepted).
    This did not happen, and because it did not happen, the loss of Charter Quay to Tchenguiz/Peverel has proved to be a disaster. Yes of course they could survive the loss of income from Charter Quay.
    But the actions of Charter Quay residents have shown that not only do leaseholders have the right to manage on purely housing developments, but where commercial premises are part of the development, making right to manage actions problematical, they have shown there is a right to enfranchisement.
    By ridding yourself of the freeholder, you can then dismiss the managing agent.
    The real damage to Tchenguiz/Peverel is that the price paid for buying the freeholds was only 28% of the claimed value. A benchmark for an accurate valuation has been set and is in the public domain.
    Based on the Tchenguiz/Peverel valuations, some financial experts were expressing the opinion that the Tchenguiz/Peverel loan to value ratio had climbed to 124%. Put simply, for every £100 of assets Tchenguiz/Peverel owed £124. However, if the asset is now shown to be just £28, the reality as exposed by the actions of Charter Quay is that for every £28 of assets, Tchenguiz/Peverel owed £124!
    Possibly this was a reason that Lloyds suddenly halted their court action to put part of the Tchenguiz portfolio into administration?.
    Without in anyway pre-judging the SFO case, should Tchenguiz win, any award will have to reflect any loss accrued as a result of the SFO action. On those figures his claim for compensation of £300m, should get knocked down to £84m!

  13. I have been crying for help in last 15 years. I am empowered by this case. Thank you for those who are campaigned for achieving fairness and enforcing the law. I believe after clearing MPs expenses, Banking System, PPI, Child abuse in BBC, Media’s corruption; is time for clearing Service charge system and give the money back to the victims of this huge crimes. Our block of flat, Albert Court was invaded with another similar management company and was ruined fro making more money. Regrettably our management company’s director also sat at LVT panel have beeb going through a very hard journey. https://www.facebook.com/groups/405757419446188/?fref=ts
    I am still very much involved and need help.Corruption in this area will spread to our daily life and has great negative impact on our society.
    Thanks to those who make changes.

  14. Simin
    You are not alone, where is Albert Court and who were the Managing Agents and who was the director?

    Chas