June 28, 2017

Kyle Court in Scotland: FirstPort just won’t spend our money

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KyleCourt2This is the sort of dilemma leasehold owners in retirement sites in England and Wales can only dream about.

Residents at Kyle Court in Ayr, a McCarthy and Stone site built in 1992 and managed (inevitably) by FirstPort, want to spend around £8,000 in the contingency fund on painting balconies and the outside walls.

But FirstPort will not act unless there is a 51 per cent vote by the residents to approve the expenditure.

FirstPort did spend a similar sum to repair the roof without the residents’ formal agreement. But that was deemed an emergency, so the factor (or property manager) was able to use the money.

Retired leaseholders in FirstPort managed sites in England and Wales will be astonished by the management company’s restraint.

In England and Wales, where FirstPort is employed by the British Virgin Island based Tchenguiz organisation, expenditure of this sort is simply imposed on residents.

Carlex is repeatedly contacted by leaseholders in England and Wales facing bills for thousands of pounds.

It is astonishing that a minimal sum was spent by FirstPort for roof repairs, where in England and Wales it would be more routine to get the leaseholders to pay for a new roof provided by a preferred contractor.

The approach of FirstPort – formerly Peverel – to contractors was revealed by the Office of Fair Trading, which ruled that 65 retirement sites had been systematically cheated into paying for new electronic doors provided by its subsidiary Cirrus.

Cirrus organised a bogus tendering process against three stooge companies so its quote always came out lowest.

Thousands of pensioners were cheated, but no criminal charges were ever made. Indeed, Peverel / FirstPort was not punished at all, although it made a £100,000 goodwill payment to the contingency funds of the sites that had been scammed.

Scottish flat owners at Kyle Court are extremely fortunate to be in a legal position to prevent such dishonest expenditure.

Carlex has urged the residents, who have control of the site, to take some responsibility for it by forming a residents’ association to make common decisions.

Curiously, both Peverel / FirstPort and McCarthy and Stone have acknowledged far fewer property management issues in Scotland than is the case in England and Wales.

This is hardly surprising. No one likes being just told to pay up dreamed-up sums by a freeholder / management company, particularly ones with such appalling reputations.

A final point is that capital values at Kyle Court, which is a little tired, are broadly in line with the local property market.

English retirement leasehold is unaccountably far lower.

Retirement living in a communal site is a good thing, but all too often it is the worst residential property investment buyers can make.

Comments

  1. Michael Epstein says:

    Clearly, leaseholders are far better protected in Scotland than they are in England and Wales.
    The Scottish Assembly has taken the rights of leaseholders very seriously.
    For some reason, whilst the funds held in reserve funds for developments managed by Firstport in England and Wales has increased by around 8%(despite managing fewer developments) the amount of reserve funds have fallen in Scotland by around 5% (broadly in line with development losses).
    That said there may be another explanation for Firstport’s reticence to spend development money?
    I would urge the residents of Kyle Court to properly audit their development accounts, in order to satisfy themselves that the funds supposed to be in their account is actually in the account?
    It would only be after extraordinary expenditure is required that a possible shortage of funds could come to light.

  2. Michael Epstein says:

    I believe the figures for England and Wales were published on the About Peverel website and were taken from the Knight Square accounts.. The Scottish figures were taken from the Firstport Scotland 2014 figures which also showed they downsized by 18 members of staff.