April 23, 2017

Cirrus isn’t an ARMA member so we have nothing to say about the price-fixing scandal, says Michelle Banks

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MichelleBankssmall… but you must take it on trust that if those bits of Peverel that ARE members sign up to ARMA-Q these practices will be ‘outlawed’ and ‘speedily detected’

Michelle Banks (right), chief executive of the Association of Residential Managing Agents, has stated that her organisation will do nothing about the Peverel / Cirrus price-fixing racket.

This is because Cirrus is not an ARMA member, she informs a Carlex reader by email.

Even though the Office of Fair Trading reported on December 6 that pensioners had been cheated in tenders worth £1.4 million at 65 retirement sites, the largest professional organisation involved in leasehold management has not a public word to say on the subject.

Banks writes: “We certainly do not condone the practices which led to an adverse ruling … [but] Cirrus is not and never has been an ARMA member.

“While it has been part of the Peverel Group, the practices that gave rise to the OFT ruling involved Cirrus and Peverel retirement properties. None of the blocks involved were managed by ARMA members and none of the ARMA member companies within the group were involved …

“In these circumstances, our Independent Regulator has no locus to investigate or take any action against Cirrus.”

For months Banks has been attempting to rouse public interest in ARMA’s attempts to bring higher ethical standards to property management via its ARMA-Q scheme.

She even addressed the annual conference of the Federation of Private Residents Associations last November to win confidence in the scheme. You can hear her speech here

The same Carlex reader has made repeated unsuccessful attempts to obtain a response from the ARHM (the Association of Retirement Housing Managers), which obtains the bulk of its funding from Peverel Retirement.

The ARHM has made no statement about the Cirrus scandal at all.

In spite of the professional bodies’ silence, Banks states:

“What we are doing is continuing to work with those companies in the Peverel Group that are our members; OML Property Management, Consort, Stonedale, Marlborough House and Pembertons, to encourage them to seek accreditation under our new regulatory regime called ARMA-Q.

“Under that regime the practices on which the OFT has ruled will be outlawed, and much greater transparency will help to ensure that if they did occur they would be speedily detected.”

It is by no means clear why membership of ARMA-Q by these elements of the Peverel group would mean sham tendering by Cirrus or any other part of Peverel Retirement would be within the scope of the ARMA regulator.

The ARMA regulator is former Labour housing minister Keith Hill, whose appointment LKP / Carlex applauded.

 COMMENT

Is it credible that the two professional bodies involved in leasehold management remain silent over the Peverel / Cirrus scandal?

This is unsurprising in the case of the Association of Retirement Housing Managers, which has never for an instant indicated that there are any adverse issues in retirement leasehold.

It has long been viewed as a stooge organisation for the vested interests in the retirement sector.

ARMA is more promising, and has staff of a different calibre: its ARMA-Q initiative – protracted and complex though it may be – is recognition that higher ethical standards are required.

Although Peverel Retirement and Cirrus are not members of ARMA, a good chunk of the group is.

Is it really acceptable for ARMA to make no public statement – not even an indication of regret – following the Office of Fair Trading’s report into the scandalous conduct of a Peverel subsidiary?

Michelle Banks’ email to the Carlex reader is all too redolent of ARMA’s former buck-passing.

Nor is it at all clear why if some parts of Peverel sign up to ARMA’s new scheme, conduct in Peverel Retirement, Cirrus or any other offshoot of the group “will be outlawed, and much greater transparency will help to ensure that if they did occur they would be speedily detected”.

If a large managing agent’s in-house or perhaps just preferred insurance broker, for example, helps itself to unjustifiable commissions, will ARMA’s response be:

“Ah, but XXX insurance brokers aren’t members of ARMA. Only the parent company is. Therefore this is not a task for the regulator.”

In a sector where the likes of Vincent Tchenguiz, who owns one per cent of all the residential freeholds in the country, have hidden behind “a quasi biblical” weave of companies ultimately controlled offshore – to quote one LVT chairman – this attitude of ARMA’s does not indicate a very enthusiastic reforming agenda.

Somehow, we must take it on trust that were Peverel part of ARMA-Q – and it is very interesting to understand that it still needs persuading – the Peverel / Cirrus cartel practices would be “outlawed” and speedily detected. Why is that, exactly?

We know that there is an appetite among the better managing agents for reform – read Rob Plumb, CEO of HML Group, on the LKP site.

What sort of message is it sending to those managing agents who simply want to be paid for an honest job, when their trade bodies have nothing to say about a shameful example of skullduggery like the Peverel / Cirrus scam?

Both ARMA and ARHM are invited to respond to this article, which will be published in full.

Comments

  1. We I am not surprised that your contact had no response from the ARHM. Keith Edgar, ex-Peverel during the price fixing scandal, is now Business Development Manager of the…………..ARHM.

    He is hardly likely to want to investigate this matter as to do so might just show him up in a very bad light.

    The ARHM are unlikely to do anything. To boot out Peverel would mean the organisation folding as ARHM receive 75 % of their funding from Peverel. There is a clear breach of the ARHM’s own Code of Practice, a code which it promotes widely, but when it comes to Peverel such breaches are ignored.

  2. Michael Epstein says:

    Let me see if I have understood this correctly.
    If I wish to set up a property management company that is compliant with the rules of ARMA membership, but I also want to commit fraud against residents, all i have to so is create a company within my company, that is not a member of ARMA and I would be free to commit any fraud I wished, without ARMA getting involved. NICE!

  3. ARMA — Association of ROGUE Managing Agents

  4. Michael Epstein says:

    If we accept the explanation offered by Mrs Banks CEO of ARMA, that action cannot be taken against Cirrus on the grounds that Cirrus are not members of ARMA, then that leaves a conundrum that i would love to know the answer to that Mrs Banks, CEO ARMA might care to proffer
    .The problem is this: I know that I and others have entered into correspondence with Mrs Banks, CEO, ARMA concerning the Cirrus price fixing scandal.
    Her answers to all of us have been broadly similar, in that she “cannot comment further until after the OFT investigation is complete” That is a perfectly reasonable position to take. But for one very crucial point!
    Now the OFT investigation is complete, only now does Mrs Banks say she cannot take action, because “Cirrus are not members of ARMA!”
    In all the correspondence entered into over the past months concerning the price fixing does Mrs Banks ever mention that Cirrus are not members of ARMA, even though she has had many opportunities to do so. Why is this? Only after the OFT ruling which showed Cirrus/ Peverel broke virtually every qualification for being members of ARMA does she finally say, Cirrus are not members.
    One would have thought that the very first reaction that could be expected of Mrs Banks was to have found out if Cirrus were members of ARMA and passed that information on?
    Unless Mrs Banks can come up with a convincing reason for only just discovering that Cirrus were not members of ARMA, it might appear that this is just an excuse to get Peverel/ARMA off a very large hook?

  5. If there is a criticism of ARMA they at least have a partial defense becasue this was an issue specific to the retirement sector. ARHM are the ones who should be called to account. Peverel Retirement as the managing agent were the ones who allowed these bids to go on for so long. They were the ones who allowed Cirrus to get away with bid rigging for 5 years.

    Perhaps one or two retirement homes should now make a formal complaint to ARHM and let us know what happens. Just remember your complaint should be that Peverel allowed Cirrus to run a bid rigging system rather than complain about Cirrus itself.

  6. Michael Epstein says:

    Martin,
    Should any complaint to ARHM be addressed directly to the ARHM business development manager Mr Keith Edgar? It does appear he has a major role in the complaints committee .
    Before i make any unfounded accusations may i ask if anyone knows if there are any reasons that might lead Mr Edgar to be less than impartial in coming to any conclusion concerning the conduct of Peverel Retirement.?

  7. this is a test to see whether comments are working

  8. Michael Hollands writes:

    I am not suggesting that the following incriminates anyone but it does show that the ARHM are not willing to discuss the subject.

    On the 16 December I sent them the following message by e.mail.

    “What action will ARHM be taking to ensure that Peverel fully compensate their residents for the monies illegally extracted from them in the Price Fixing scandal.

    “I hope you will ensure in future that your strict code of conduct is adhered to.”

    I received no reply or acknowledgment and have since sent four reminders with the same result.

    I have now resorted to asking two different Ombudsmen to help me get a reply

  9. A Reviewer says:

    Hi all

    One point has not been mentioned: it is that Peverel itself sanctioned Cirrus’ activities both by placing contracts and by owning them but not controlling them viz providing the necessary governance.

    Thus Peverel should be disciplined by ARMA – probably by rescinding their membership.

    Sad, but true that all these bodies are set up to PREVENT complaints.

    The whole country is “over ombudsman-ed” and they do little save draw salaries that actually increase costs … think about it … where does the money come from: the doubters say Peverel. But where does Peverel get it from – the doubters…

    happy thoughts

  10. Michael Epstein says:

    Can you believe that Sue Petri, Head of Business Development, Peverel Group has been appointed to the Governance Board of ARMA?. IT STINKS!

  11. Trevor Bradley says:

    ARMA, ARHM, why do you allow these companies to be members – because they pay you money, so you are also condoning and supporting these disgraceful goings on.
    Trevor Bradley, Director of a small sucessful property management company (Our Freeholder residents describe us as 100% succesful)

  12. Michael Epstein says:

    Trevor Bradley,
    Perhaps Mrs Banks CEO, ARMA believes that the appointment of Sue Petri ,Head of Business Development, Peverel Group to the governance board of ARMA will enhance ARMA’s reputation?

  13. Trevor Bradley says:

    ME, what can I say, almost stuck for words!
    To me, by appointing an executive of this company ARMA are insulting any of the “decent” companies that are ARMA members.
    The appointment enhances the fact that they intend to carry on “as they always have done”

  14. Trevor Bradley says:

    It states at the beginning of the ARMA website that “It’s worth remembering that the residential leasehold sector is unregulated” – how right you are Mrs Banks. For the first time ever I think you are totally correct