April 27, 2017

Mounting concern as Hanover has sold 21 house manager flats

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HanoversmallHanover residents are becoming increasingly concerned that the supposedly not-for-profit housing association is mining value out of their sites by flogging off the house manager flats.

Leonard Hackett Court in Bournemouth had its house manager flat sold in June for £105,000, while others report Hanover seeking planning consent to enhance value before putting the properties up for sale.

It is now confirmed to Carlex that Hanover has sold 21 house manager flats since 2008. This is out of a total of 104 house manager flats where Hanover controls the sites, as freeholder and manager.

“It was outrageous that our house manager flat was sold,” says Peter Penberthy, of the Leonard Hackett Court residents’ association.

“We voted to end a resident house manager service, not to sell the flat. Given that we have paid all the rent on the flat from 1981 and all subsequent costs on the flat, it should have belonged to the residents who have been paying for it.

“£15,000 compensation for this asset is ludicrous.”

Penberthy is particularly angered that Hanover assumed ownership of the flat because Leonard Hackett Court was built in 1981 with a £300,000 grant from the Housing Corporation.

Another £709,100 came from sale of the leases, meaning that Hanover – in those days a charity – paid in nothing at all.

A spokesman for the housing association said the decision to sell the house manager flats, where the residents have decided to end the live-in house manager, was made by the Hanover board in 2008.

“At that point the board also agreed that where such flats are sold, Hanover would make a contribution of £15,000 to the estate concerned. This is a goodwill gesture, intended to ensure that residents see a benefit from the sale.

“Residents also receive a further marginal benefit on a continuing basis since the costs of the estate are shared across one additional flat.

“Hanover consults carefully with residents in any such case, in accordance with the Association of Retirement Housing Managers’ code of practice.”

Penberthy is not impressed. “Hanover simply dictated that they would sell and we had no say in the matter.

“Worse they cocked up the flat’s lease, wrong apportioning its service charges at 1/35th, whereas now there are 36 flats.

“They don’t have clue and it is one mistake after another.”

However, Hanover’s payment of £15,000 is 50 per cent more than the £10,000 Peverel / Tchenguiz pays on sale of a house manager flat.

Carlex has asked Hanover whether it sought or obtained a legal opinion before selling these assets.

House manager flats are often mentioned in leases, as is the service of a resident house manager. In many cases, planning consent was granted because sites were built with a resident manager.

House manager flats have been a lucrative revenue stream for years in retirement leasehold, with vaguely worked out “notional rents” being paid for their upkeep.

These have been challenged by residents successfully in the past, as here at Oakland Court in Worthing where residents won back £68,500. The court action was organised by resident John Fenwick, a constituent of Sir Peter Bottomley who obtained Bar Council pro bono barrister to plead the case in tribunal.

At Tchenguiz freeholds the notional rent appears to be negotiable at open meetings with leaseholders.

The sale of house manager flats is altogether more serious.

Carlex deprecates the mining of value of retirement sites by flogging off the communal areas. Legal opinion obtained by Carlex suggests the practice of selling house manager flats is unlawful.

The advice to all retirement sites is: do not agree to the sale of the house manager’s flat.

Comments

  1. Well the Anchor Trust has also sold quite a few Manager flats, but I don’t think they are as generous as Hanover. I am not aware they give anything back.

    These so called non-profit making social housing providers blow holes through any lease in their desire to make money. Often aganst the wishes of resdients.

  2. I would agree with Carlex and say that surely these flats were provided for the benefit of the leaseholders and therefore ‘any’ benefits that are gained by a sale of the assets that were provided to enhance the should be put back into the service charge for the leaseholders… I would be interested in seeing this challenged.

    • Karen,
      We at Ashbrook Court were balloted over the requirements of a full time House Manager or a Part Time HM after our HM was sacked for Gross Misconduct.

      The overwhelming view was that we did not require a full time HM.

      The Area/Regional Manager informed us before the ballot that the HM Flat will soon require refurbishing of :-
      Kitchen
      Bathroom
      Central Heating
      Decorations
      Carpets

      No wonder the overwhelming view was for the Part Time HM. The Area Manager informed us at a meeting, that if we voted for the Part Time HM, we would no longer be responsible for the future maintenance of the HM Flat. (How is that for being impartial?) We were also informed that the Freeholder is going to sell the HM Flat, after building an office on the development.

      At a later meeting with my self and Peverel Retirement Regional/Area Manager, I was informed that Peverel Management Services Ltd had a 125 year lease on the Flat. So if we were able to gain RTM we would not be rid of Peverel Retirement?

      The Part Time HM only lasted 8 months using the HM Flat as an office with no heating and we have been sent the bill for the Council Tax of over £1,000.00, we were not informed of that at the time?

      [REDACTED …]

  3. Many thanks, CARLEX, for this article. We know Hanover are not as ‘dreadful’ as other agents, but when leaseholders actually pay for the resident manager’s flat, and all the ongoing costs, it is just an insult, representing sheer greed, when Housing Associations sell these flats with an insulting contribution of just £15K! We are lucky to have an MP, Conor Burns, and his Senior-Caseworker, who have supported our case against Hanover so admirably. We do not intend to let Hanover succeed in their claim, particularly as they have failed to secure their responsibilities for maintaining our Reserve Fund. We may be elderly, but by no means are we incompetent … perhaps Hanover should take a lesson from the expertise of our elderly residents? To others faced with similar situations … speak up now!

  4. How can residents determine if the sale of wardens “live in accommodation” is legal without passing on the proceeds to the reserve funds to the residents who have financed this “perk” Hyde did not pass on “one” penny of the sale in 2007 here at Joseph Conrad House, Canterbury, Kent, although we were informed that we would, only for the promise to be retracted. If anyone is listening could I please place this on record for any future claim. Are Carlex compiling a list.
    Whilst writing has anyone any experience of how procurement works (i.e. one company been selected) against the rules of Leasehold and Tenant act (i.e minium 2 quotes required for major work over £250.00 per flat limit.
    Calex your doing a wonderful job.
    A Carte

    • Unfortunatley what would happen if the unscruplious Landlords were forced to get 3 quotes is: they would ensure that other quotes were far and above the one they wanted so that they (LL) could justify giving the management contract to their preferedunscruplious Managing Agents.
      The rules do also state that contractors are not always based on the cheapest quote!
      Corrupt Landlords and Managing Agents will always find ways around the law that is why most of these sites are owned and/or run by companies that have a solicitor as either a director or owner…

  5. John Fenwick says:

    Typically the freeholder obtains planning permission for sheltered housing development on condition that warden (house manager) accommodation is to be provided.

    The permitted use of the manager’s flat is thus restricted and such a restriction has relevance to rental value where argument arises as to the basis upon which a notional rent is to be assessed because under normal valuation principles restricted use value is less than open market value. (Some carefully drafted leases nevertheless provide for open market rent so the point is not always applicable.)

    Of course leases take many and different forms but it offends a primary purpose of sheltered housing for freeholders to dispose of house manager accommodation in contravention of planning conditions and in breach of specific covenants in leases to provide such accommodation.

  6. The Government of the day is always pro-landlord and does not care much about protecting leaseholders from unscrupulous freeholder companies.

    Under the leasehold system, the freeholder owns the entire estate including block of flats and land, for which the leaseholders are just 99 years long term rental tenants locked by leases with adverse terms for the tenants.

    Leaseholders have to get organised to set up RTM ( right to manage) companies to take charge of the annual service charge account for their retirement blocks. It just needs a majority of leaseholders ( 50%+) to support the RTM process and after legally taking over the right to manage service charge administration , your leaders can appoint another local managing agent to do the on-site work. The RTM start up costs can soon be recovered from the savings gained by the new managing agent .

  7. Alex Ellison says:

    Could someone please explain to me the reason why Peverel/Tchenguiz would ‘create’ 125 year leases in 2009 on the house manager flats which didn’t match the remaining length of time of the other leaseholders’ leases, which would have been shorter ( i.e. length of a 125 year lease created in 2000 becomes a 114 year lease on sale transfer in 2009). When Peverel/Tchenguiz were ‘creating’ new leases in 2009 why was the length of lease not made to run for the same length of time as the other leases? What gain is it to Peverel that the house manager’s flat should have a longer lease than all the other leases in a development? And how might this affect a development’s Right to Manage (as mentioned by Charles Willis in this article)?
    If someone has an explanation I would appreciate hearing what it is.
    Thanks.