June 22, 2017

Re-energised LEASE annual conference 2015

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RogerSouthamLKPA re-energised and confident Leasehold Advisory Service held its LEASE annual conference 2015 in central London last Wednesday.

It was a gathering of some of the brightest – perhaps most socially engaged – of the players in the professional leasehold world: lawyers, surveyors, property tribunal judges, property managers.

For the third time – and it was a shameful omission before –leaseholders were allowed in for a “free” evening session. At last, they seem to be considered an important part of a LEASE annual conference.

The change of pace at the organisation is very largely due to the appointment of Roger Southam as chairman on January 1.

Like a vaudeville entertainer in winkle-pickers and bow tie, Mr Southam galvanised the audience with a fast-talking virtuoso performance that included extemporising dialogue, and US politician-style striding around the stage.

At one point, he pulled off an impromptu 15-minute talk as a stand-in for the housing minister, who failed to show at the last minute.

The message from Mr Southam, founder of property manager Chainbow as well as a leaseholder, could be reduced to: we are all in this together, so let’s pull together to make leasehold work better.

Awkward questions at this honeymoon stage of his appointment were largely avoided: the competing interests of freeholders and the professionals that they employ and leaseholders were smoothed over. Harmony was possible, and a cure-all was “better communication”.

Better communication had its limits, however.

“How many here think they are being ripped off by the property managers?” Mr Southam asked 400 leaseholders in the evening session, perhaps expecting a few malcontents.

Instead, a sea of hands immediately appeared, suggesting near unanimity among those present that they were, indeed, being ripped off.

Of course, any leaseholder attending a LEASE event is very likely to have a grievance to air, which marks a contrasts with the Competition and Markets Authority finding of fairly widespread contentment among leaseholders in its leasehold management report.


ARMA: We have lost members owing to ARMA-Q

Martin Perry, chairman of ARMA, addressing the LEASE annual conference 2015

Martin Perry, chairman of ARMA, addressing the LEASE annual conference 2015

Damian Greenish, of Pemberton greenish solicitors, chaired the main sessions, which began with Martin Perry, chairman of ARMA.

Applications to its new ARMA-Q regulatory scheme – which is now the benchmark for membership of the trade body – came in at the last minute before the January 1 deadline.

Mr Perry, who heads West of England Estates Management in Bath, said that ARMA-Q is “not a back-slapping exercise. We have lost some members because of it”.

Some property management companies either would not sign up, or did not qualify. His own company had to amend some business practices in order to do so (in later conversation this emerged related to the lack of formal management contracts with historic clients).

Although ARMA-Q is not the solution to all issues, Mr Perry argued that many of the CMA concerns about service charges, using reserve funds to off-set finances and links with service companies were addressed in the tougher regulations.

Mr Perry referred to the LKP session at the Commons on January 29, which he attended. “It was interesting blue skies thinking, but the chances of legislative change in the near future is very slim.”

True enough, with the election in spring.


 

CMA market study findings

Douglas Cooper, the project director of the leasehold management inquiry, went over the main findings of the report.

While “existing legislation and practices actually did quite a good job”, satisfaction was higher in RTM / RMC controlled blocks.

“Where the relationship between property manager and the leaseholder breaks down, the impact on leaseholders can be very significant,” he said. “There is a lot of suspicion and distrust of property management companies.”

The CMA estimated total revenue associated with service charges in England and Wales as between £2.3 billion and £3.5 billion.

There was the now obligatory reference to leaseholders’ ignorance: “Leaseholders often feel poorly informed and have a limited understanding of their liabilities when they purchase a leasehold property.”

Unmentioned, was the ignorance of others in the sector: until last autumn everyone was repeating the ludicrous figure of 2.5 million leasehold properties. It is now accepted that there are 4.1 million private leasehold properties.

However, LEASE is working on a simple information sheet for prospective buyers.

The CMA repeated – and has done at all presentations of its report – that the problems in leasehold were not confined to management companies that were not affiliated to the trade bodies. The complaints spread across all.

Transparency and communication – again – were highlighted, commissions of all kinds must be declared – including that of insurance to the freeholder – there should be full disclosure of corporate links with service companies.

The CMA seeks legislation “For new powers that would require the landlord to re-tender for a new property management company in circumstances where more than 50% of all leaseholders support re-tendering.”

It also recommended “alternative dispute resolution (either early neutral evaluation, mediation or other), separate from the current FTT process, for certain categories of complaint.”

LKP has long argued that ombudsmen schemes fulfil this role and that anything above £1,000 should be dealt with by the tribunal, whose own mediation service is showing a remarkably high take-up.


 

The First Tier Tribunal

Siobhan McGrath, president of the First Tier Tribunal (Property Chamber), gave an overview of the functions of the property tribunal, which is now handling 9,500 leasehold cases a year (11,000 cases of all varieties).

Again, there was a loaded emphasis on the property tribunal being a “no-cost service” – which will come as a surprise to the pensioners of Elim Court who are looking at approximately £25,000 costs so far for their failed RTM in the upper tribunal.

The tribunal may indeed be “no cost”, but what is the point of emphasising that given that landlords are allowed to levy legal costs in most leases?

Unless the tribunal prevents a landlord levying his costs, they descend on the leaseholders .

LKP had first hand experience of the “no cost” property tribunal when upmarket West India Quay wanted a recognised tenants’ association and the freeholder deployed a legal army costing £74,500 for an afternoon’s work.

Fortunately, this blatant gamesmanship in the property tribunal completely failed.


The material of other presentations at the LEASE annual conference will be addressed in subsequent articles.

Anthony Essien, LEASE’s Chief Executive, said of the LEASE annual conference 2015: “I was frankly honoured to see so many delegates join us for both the day and evening events. It just confirms to me that this is a unique and important event for everyone associated with leasehold property.”

Its report of the event is here

 

Comments

  1. Michael Hollands says:

    It is good to hear that Leasehold problems are at last being discussed by most of the major players in this industry. But it is a pity that the near proximity of a General Election kills any hope of a remedy anytime soon.
    Interesting to hear that ARMA may be losing members due to the severity of its Q qualification.
    If Peverel/First Port do gain qualification what will this say for Janet’s efforts over the past three years.
    They may have lost a few tiddlers but will ARMA be able to handle such a big fish.

  2. Michael Epstein says:

    Fortunately for ARMA, that though the introduction of ARMA-Q may have lost them some members, they were able to hang on to some companies that don’t actually exist!
    Perhaps ARMA are superstitious and are waiting to announce Peverel’s fate on Friday 13th!

  3. Michael Epstein says:

    Pembertons have just qualified for ARMA-Q. What credibility can ARMA-Q have?

  4. Hi all

    As I have said many times – there is ONLY one standard and that is ISO9001.

    A company puts in a Quality Management System
    Thats system and its operation are INDEPENDENTLY vetted by an ACCREDITED ASSESSOR

    The accreditation of assessors is in itself a verifiable process.

    ARMA-Q is just a matter of the wolves lining up a new menu …. of more ways of “Revenue Protection” which is the new phrase for Rip Off .

    Just Google “ISO9001”

    Happy Days

    • Michael Hollands says:

      Just looked at the ISO9001 website
      It appears to be a very good Quality Management System and has won awards.
      It makes sure that companies operate good and fair systems and have trained assessors to follow the accredited company’s progress.
      This seems similar to what ARMA Q is trying to do.
      In the Leasehold Retirement industry there are so many twists and turns management companies could take to make that extra profit.
      I feel that both The ISO system and probably ARMA Q would have difficulty in controlling this.
      At least ARMA have an independent panel to investigate unresolved complaints. Not sure about ISO

      • Michael

        MEGA MEGA difference …. [are you sure you don’t work for peverel …. ????? – apologies but PLEASE PLEASE engage brain]

        ISO9001 is an International Standard adopted by every thinking organisation in the WHOLE world from car makers, plane makers, food suppliers, local government [but NOT in UK], lawyers, NATO [from where it emanated during the second world war] etc etc etc. It is why cars last so long. Its why Canada, Singapore, and Australia et al are such well administered places.

        NATO produced AQAP: Canadian 6 inch guns can safely fire British shells …. etc etc
        BSI produced BS5750 parts 1 to 4
        Canada produced CSA Z2999 parts 1 to 4 – and similar standards in many other countries
        The WORLD produced ISO9001
        It is INDEPENDENT verfication by INDEPENDENTLY verified assessors

        With accreditation to ISO9001, there is simply no chance of over changing, graft and corruption for which many ARMA members are well known. Customer service complaints MUST be dealt with to the customer’s satisfaction etc etc etc

        ARMA-Q is an attempt to “we are as good as …..” but put simply they are not, and cannot be. AND it allows them to carry on with “revenue protection” policies ….. check your local council as well….

        It is like the majority of Ombudsman Services who are there to protect the industry organisations they claim to serve … put simply they do NOT …

        BECAUSE they do not observe the basic rules of justice – see the White Book.

        So dump ARMA and its Q – it does not have the PROVABLE INTEGRITY that ISO9001 has. Nor the ability ever to do so.

        Happy Days

        • Michael Hollands says:

          Reviewer
          Thanks for all this information on ISO, it sounds good.
          Can you explain who actually enforces its conditions and what happens to those companies who do not conform.
          How could it be made to work in the Retirement Leasehold industry.
          No I do not work for Peverel, but if you could get them to perform to ISO standard then one day I might let them work for me

        • Michael Hollands says:

          There is a retirement apartment for sale in our locality where the sales brochure states that the ground rent is collected by E&M.
          I notice that E&M are certified ISO 9001
          Does this mean that they are a reputable company who would serve me well if I purchased this property?

  5. Trevor Bradley says:

    Reviewer, Not sure if I read your 1st part about ISO correctly. Do you mean no local UK governments belong/meet ISO standards or do you mean NO organisation/business in UK.
    If you mean the latter you are incorrect. Hundreds of UK businesses belong and meet and work to ISO 9001/2 standards.
    I worked for one and the systems and procedures you have to have in place, and work to, and prove you do are usually very complicated and can be time consuming, but, they are excellent, especially for the customer. There is no better accreditation than working to, and meeting ISO standards.
    The majority of “Blue Chip” companies will not sub contract work to smaller companies unless they are ISO accredited. Hence another reason why so many in UK are.
    I would not see any current senior manager, or ex senior management employee from companies like Peverel/FirstPort being able to accept working to such a system as they have, for far to long trained their brains to just think “what can I do to keep employed and make as much money for myself” They cannot help themselves, it has gone on for far to long. They won’t change even when they leav Pev and set up their own company. It is to late to change these “human beings” now. They should all be banned for life for working in the leasehold and retirement sector. Leopards can’t change their spots.
    Anyway, yes ISO is excellent.

  6. Michael Epstein says:

    Trevor,
    I can’t see it enhancing the reputation of any company to take on ex Peverel staff.
    On this point, Keith Edgar, Nigel Bannister, Kevin Barr and Philip Cummings agree with me.
    This is why despite being open and transparent, the Freemont website makes mention of their years of experience in property management, but fails to mention Peverel.
    I note that Mark Hoyland (a very short term director of Peverel) has now joined the heavily indebted Balfour Beatty as they attempt to survive.