The FPRA Committee listen to Tony Essien, Chief Executive of LEASE, at the FPRA Special 40th Anniversary Event in partnership with SKY, held on 9 November 2011 at the Victory Services Club in London.

FPRA members, sponsors and other leaseholders at the FPRA Special 40th Event

Leasehold Advisory Service (LEASE) runs workshop for Walthamstow leaseholders
LEASE has recently led a workshop for leaseholders in Walthamstow, London organised by MP Stella Creasey, after concerns were raised by leaseholders about expensive demands for terrorism insurance.

FPRA Chairman Bob Smytherman was also invited to offer advice and to give a talk on the benefits of block Residents' Associations.

See LEASE's website for further details.

LEASE are also availble to give presentations to Residents' Associations (see their webpage above).
Posted 18/08/11

DCLG endorses some form of regulation for agents in its response to Rugg Review

Primarily concerned with the private rented sector, the Rugg Review consultation neverthess had buried deep within it a few crucial pages seeking comments on the regulation of managing agents in the leasehold sector.

The Department of Communities and Local Government (DCLG) has now published responses to the consultation, and given some indication about where it stands on the question of the regulation of managing agents. .

Broadly, the government agrees 'with the emerging consensus around the need to regulate letting and managing agents' (page 10). Whether this might be self-regulation (see story below) or an independent regulator is an open question though. The next step in the process is yet more discussion with interested parties.

The FPRA will write a detailed response, which will be available to members.
Posted 9/02/10

Is the statutory regulation of managing agents off the political agenda?

Is the government dropping its interest in regulating managing agents, and instead opting for the self-regulation of the sector by existing trade bodies? The audience at a recent CARLEX meeting was advised this is the case.

In response to this, FPRA Chairman Bob Smytherman calls on politicians to commit to a scheme of independent regulation that leaseholders can be confident will work.

See full details in the FPRA's press release
Posted 26/01/10

ARMA SEEKS TO IMPROVE ITS COMPLAINTS PROCEDURE

ARMA has joined the Surveyors Ombudsman Service (SOS), an independent organisation designed to investigate and resolve complaints against surveyors. It was set up by the Royal Institution of Surveyors (RICs). By introducing an independent third party, ARMA aims to remedy the shortfalls in its existing procedures. All ARMA's members will now be subject to the SOS's procedures.

ARMA is a trade body representing managing agents, which self-regulates its members' conduct through an agreed Code of Practice. The FPRA has worked with ARMA over many years on various projects, and both organisations share the aim of improving standards in block management.

A key factor in achieving this aim, is to have a transparent mechanism for dealing with complaints against managing agents, and for the Code of Practice to be enforced. The complaints received by the Ombudsman and their recommendations should also be published, so people can see what the problems are and what action has been taken. Everyone can learn from the experience. The FPRA hopes that ARMA's joining of SOS is a major step forward in this direction.

See ARMA's press release (listed in 'Latest News')

Posted 6/12/09

Leaseholders' Rights Bill Withdrawn Government considers current legislation strikes a fair balance between leaseholder rights and responsibilities

MP Jacqui Tait's Private Members Bill seeking to improve leaseholders rights, received its Second Reading on 26 June 2009. The government did not support it, arguing that current legislation was sufficient. Without government support the bill was doomed, and so was withdrawn at the end of the debate.

Most of the debate focussed on the horrendous problems faced by many public sector leaseholders. However, Barry Gardiner MP - a long-term supporter of leaseholders - drew attention to the failings of the 2002 Commonhold and Leasehold Reform Act, which affect all leaseholders. He highlighted the extremely low take-up of Commonhold, and how less than 10% of blocks have been able to enfranchise.

Gardiner said one reason why the bill was flawed, was because it was a 'Blue Peter' bill, meaning the bill was one that civil servants had prepared earlier: in this case for the previous Conservative government, when landlord interests were stronger. and there was a risk of it not getting through the Lords.
More information here.

As part of its ongoing campaign to raise awareness - especially amongst politicians - about the flaws in the leasehold system as it stands, the FPRA has produced a new leaflet outlining some of the key problems facing leaehold flat-owners. It can be downloaded by clicking on the image.

Copies will be sent to MPs, decision-makers and journalists.

The notion of 'forgotten leaseholders' is timely, as the FPRA has just heard from the Law Commission that reform of leasehold and tenant legislation will not be subject to their scrutiny. See FPRA Press Release
Posted 22/07/11

New national survey designed to highlight legal dfficulties faced by flat owners wishing to improve their block's energy efficiency

As members of the FPRA know there are enornmous legal difficulties in using service charge funds to pay for improving the energy efficiency of the building, such as roof or cavity wall
insulation. The problem is primarily that leases only allow for maintenance and repair, whereas energy efficiency work could be designated as 'improvements' and therefore not chargeable to the block's service charge account.

The FPRA in collaboration with Jo Brookes, an MSc student from the Centre for Alternative Technologies, has launched a national survey to collect data about energy efficiency in flats. This subject has so far received very little attention by researchers. The survey will provide evdience which will help persuade the government to act.

The survey is only available until 22 June 2011.

For full details see the FPRA's comprehensive Press Release

See also The Green Deal Forum and the abseilers who carry out cavity wall insulation in blocks, saving the cost of scaffolding. Report by the Littlehampton Gazette (16/06/11)

Government consults on updating leasehold value limits

The Government has recently published a Consultation Paper containing proposals for updating the property value limits which are used to determine whether certain rights are available to residential long leaseholders. These are rights for such leaseholders to remain in their properties as assured tenants when their lease comes to an end, to extend the lease of their leasehold house or to purchase the freehold of a leasehold house (enfranchise) on particular terms.

It also recently announced a regulatory moratorium for micro-business and new start-ups which means that they will be exempt from new domestic regulation due to come into force from 1 April 2011 for three years.

The Government would be interested in any comments on the proposals in the paper, and also whether the moratorium should apply in relation to any regulations implementing the proposals.

The consultation paper is available here
(FPRA Press Release 15/06/11)

New online tool could help leaseholders takeover the management of their building

Consumer Focus has launched a rather useful web tool which allows leaseholders to look at whether they could work with their neighbours to take over the management of their building.

Access the tool here
Posted 14/5/11, updated 17/06/11

HIP, HIP, FPRA!

News on the Block interviews FPRA Chairman Bob Smytherman on what it's like to be forty
Posted 22/2/11

Property tycoon Vincent Tchenguiz surrenders his complex web of property companies to lending banks

See the Guardian for the full story
Posted 14/02/11

Peverel retirement leaseholders fear increased charges to pay for Tchenguiz/Peverel debt burden
News that Bank of America has been forced to 'restructure' its loan to Vincent Tchenguiz that enabled his 2007 £500 million purchase of Peverel, the UK's biggest retirement property manager, has led retired leaseholders to fear they will be forced to pay for the BoA's toxic loan to Tchenguiz.

See CARLEX blog for comments.
See Financial Times for full story.

Stephen Guy, FPRA committee member, commented that the Financial Times' story on Tchenguiz offers 'further insight into the shocking way that people's homes have become entangled in the complex financial dealings of unregulated businesses, which is all part of the money-grabbing casino culture that brought down the banks'.
Posted 7/01/11

Consumer Focus report on energy efficiency in rented housing ignores leasehold issues

Consumer Focus, the statutory agency for consumer rights, has produced a report that addresses the often low standards of energy efficiency in private rented homes, many of which are flats. Unfortunately, as so often with policymakers, they have not grasped the intrinsic difficulties encountered in blocks of flats when it comes to undertaking improvements, such as improving insulation, that involve the common parts of the property.

This is despite the FPRA sending Consumer Focus a copy of an article by the FPRA's legal advisor Nick Roberts, on the legal problems - and a potential solution - of raising the quality of insulation in flats.

In the (unlikely) event that the government adopts the proposals, it could have a big impact on leaseholders.
Posted 3/01/11

CARLEX is back "fighting fit and ready for the next phase"

The Campaign Against Retirement Leaxploitation (CARLEX) is back in action after a period of uncertainty. To find out more, visit their revamped website.
Posted 26/11/10

CARLEX's first event in the New Year is a legal surgery in Tonbridge Wells on 17 January. This is being held in conjunction with the Leasehold Knowledge Partnership (LKP). See poster and CARLEX website for details.
Posted 6/1/11, updated 15/1/11

See also latest FPRA press release 4/1/11

Will LEASE survive the Bonfire of QUANGOs?

The future of the Leasehold Advisory Service (LEASE) hangs in the balance as the Coalition Government seeks to cut its spending. Apparently the final decision on the fate of LEASE will be taken in April 2011.

The Leasehold Valuation Tribunal (LVT) is to be taken under the wing of the Ministry of Justice. The body currently responsible for it, the Residential Property Tribunal Service (RPTS), is to be abolished.
Posted 16/10/10

Accounting Regulations and Commonhold reform abandoned by Coalition Government

The FPRA understands from the Department of Communities and Local Government (DCLG) that it will not be implementing regulations requiring service charge accounts to be held in designated accounts, and for certain accounting information to be provided with service charge invoices.

These provisions were included in the 2002 Commonhold and Leasehold Reform Act, but not yet iimplemented. The Coalition government has abandoned them on the grounds that they will be an unwanted bureacratic burden on businesses.

The Ministry of Justice has informed the FPRA that it has no plans to change Commonhold legislation, while adding that subject to priorities and resources it will consider proposals for change.

A further signal that the Coalition has turned its back on Commonhold is their withdrawal of funding from LEASE to provide advice on Commonhold. See LEASE's press release for more information.
Posted 5/08/10

Hidden Charges (Further) Revealed
RICs consults on transparency in professional fees

A frequent complaint from FPRA members is the lack of transparency in the bills they receive from managing agents, particularly for insurance and services. The Royal Institution of Chartered Surveyors (RICs) recognises there is a problem of hidden professional fees, and recently carried out a consultation to establish the scale and nature of the abuse. The remit included letting renewals, valuation fees, Home Information Packs (HIPs), and Energy Performance Certificates (EPCs).

Peter Goodacre, President of RICs, writes 'it is stating the obvious to say that professionals should at all times be open and transparent in their dealings with their clients... The client should be left with no uncertainty as to what service they have paid for and what the cost of that service is.' That is a far cry from the experience of many leaseholders. So RICs invited anyone with an interest in leasehold to contribute their views and offer examples of billing secrecy, and for a sense of balance, examples of good practice too.

I went along to one of the consultation meetings on behalf of the FPRA membership to report some of the horror stories of opaque charging, and to find out what others had to say. It was a mixed group of around fifteen interested people, mostly property and insurance professionals, with three people, me included, directly representing leaseholders, otherwise known it seems, as consumers. Actually, there was a fourth consumer, Baroness Maggie Jones who chaired the meeting. As a lay person, she announced she would speak up for consumers.

For my part, I drew attention to four categories where a lack of transparency is a problem. First, management fees, where an agent freely adds extra management charges without explanation, without seeking the agreement of the RMC, and then pockets the fee regardless of the protestations of leaseholders. Second, the lack of transparency in the holding of service charge and ground rent funds. Third, the lack of clear complaints procedures offered by many managing agents. Fourth, the well-publicised scandal of inflated block insurance premiums, caused by secret kick-back payments to managing agents and freeholders by complicit insurance brokers.

Neil Cook, an insurance specialist at Kay International plc, who is campaigning to expose the rotten side of the industry, and ensure that consumers get a fair deal, told the meeting much about outrageous buildings insurance scams. Transparency in the billing of insurance would reveal exactly who has taken what from the insurance premium, information that would help empower those leaseholders who have to foot the inflated bill. Watch this space for a future article by Mr. Cook on insurance malpractice and ways to deal with it.

Roger Southam, FRICS, Chairman of Chainbow managing agents, spoke out against poor practices in his own area, the managing agent industry. Wearing his trademark flamboyant suit, he argued that transparency was essential in the managing agent industry to help eradicate a raft of hidden charges, not least the range of rip-offs in insurance pricing, which he said 'beggars belief'.

Other people at the meeting spoke of hidden charges in other areas. Some estate agents take a secret commission from HIPs providers when they organise a HIP for their customers.* Costs in home valuations are sometimes concealed: it was news to me that the surveyor who values a home for a building society may only receive half of the fee, the rest going to so-called Panel Companies, which are third party agencies used by building societies. There is no explicit malpractice here, but the consumer remains in the dark. If consumers were aware of the practice, they might be able to shop around for a cheaper independent survey.

So, after two hours of talking, what had emerged from the consultation? Everyone agreed that transparency was a good thing (who could argue against that?). As Southam said, what's needed is a 'simple sheet of paper explaining who's taken what out of the cake'. But this was not an end in itself. Greater transparency was about giving clients more information to make informed choices, to help create a level playing field for businesses by exposing the dubious charging schemes of unprofessional agents and brokers. A related theme was that consumers need to be better informed about all the processes, legalities, rights and responsibilities involved in leasehold and the purchase of their homes, to be in a stronger position to seek out good value, and resist rogue service providers that deliberately seek to over-charge their clients.

RICS plans to publish a summary of its findings by the end of 2009. (Now published)

Stephen Guy
FPRA Website Editor
Posted 17/08/09

* For more about HIP fee discrepencies see Guardian Money 19/08/09

FPRA legal advisor Yashmin Mistry wins Young Professional of the Year second year running

Many FPRA members will have had their questions answered by Yashmin Mistry, of solicitors Brethertons. Her outstanding skills as a legal specialist in leasehold were recognised again at the Enfranchisement and Right to Manage Awards, organised by News on the Block.

More details here about the event and other winners.
Posted 24/06/11

Peverel's operating companies continue despite going into administration

Despite the financial collapse of the troubled Peverel group - the UK's largest property management group including leasehold retirement homes - Administrators Zolfo Cooper say that services provided for leaseholders and blocks of flats will continue as normal. They say it is the holding company that has financial difficulties rather than the operating companies that provide the service.

Zolfo Cooper are apparently confident of a 'successful outcome' but quite what that might mean for leaseholders is unclear at this stage.

For a range of news coverage click Google
16/03/11

Vincent Tchenguiz, owner of managing agents Peverel, arrested

Playboy property empire magnate Vincent Tchenguiz was arrested on Wednesday by the Serious Fraud Office for his involvement in the fall of Icelandic bank Kaupthing.

Tchenguiz is the owner of Peverel, the UK's largest leasehold management company, which has come under intense criticism fo the way it manages it's leasehold portfolio.

For a range of news coverage click Google
10/03/11

Digital UK has become everyone's favourite QUANGO. At a recent Digital UK reception at the House of Commons, speakers, MPs and guests were bubbling with fulsome praise for the organisation. Why? Because it defied the usual expectations of QUANGOS: it has done a terrific job in handling the TV digital switchover as agreed by all, and done so significantly under-budget.

What conclusions can be drawn from this? Well, as this demonstrates QUANGOS can perform very well, perhaps the government can be persuaded that LEASE is also performing well and is doing a good job, and should not be scrapped.
Posted 26/01/11

Digital UK's Annual Report can be seen on DigitalUK's website

FPRA ATTENDS CARLEX MEETING
FPRA Chairman Bob Smytherman attended the latest meeting meeting of CARLEX in Chichester. He helped promote the importance of forming a Residents' Association as the first step in dealing with management problems in leasehold properties.

CARLEX is the Campaign Against Retirement Leasehold EXploitation, which has generated a remarkable whirlwind of press and political interest in the problems of the (mis)management of retirement homes in the leasehold sector.

Posted 24/01/10

Coalition Lib Dems have sold out 'lock stock and barrel' on leaseholders
says CARL chairman

Nigel Wilkins, Chairman of the Campaign for the Abolition of Residential Leasehold (CARL), has written to Lib Dem MPs inviting their observations on why they have failed to progress their pre-election promises to leaseholders.
Read Nigel's letter here
Posted 7/01/11

RIP OFF BRITAIN: LEASEHOLD INVESTIGATED
FPRA Chairman Bob Smytherman appeared on the BBC's Rip Off Britain programme. Dubbed the 'Residents' Champion', Bob declared it 'scandalous' that the multi-billion pound leasehold sector is unregulated.
Shown on 3rd December 2009, it can be viewed or downloaded from the BBC website

Posted 4/12/09

RICs Publishes Summary Report on Transparency Consultation

Last summer the Royal Insitution of Chartered Surveyors (RICs) ran a consultation excercise on transparency in professional fees, for services such as insurance. The FPRA attended one session and raised some examples of poor practice experienced by FPRA members.

The summary report recognises the problems, notes that there was almost unanimous agreement that the leasehold sector needs regulating (together with letting agents and landlords) to deal with the problems, and that there should be consistency across the sector.

For the full report click here

Posted 12/12/09

Safety of Service Charge Funds: CLG Publishes Guidelines
Communities and Local Government has at last published Guidance Notes on the safety of leaseholders' service charge funds in the event of the holding bank's collapse. Each leaseholder will be compensated up to £50,000.
CLG Guidance Notes

HIPS guide now available
Communities and Local Government published on 26 March 2009 a new guide to Home Information Packs (HIPs). More information here

New Government Shelves Plans to Regulate Agents

Grant Shapps, the new Housing Minister, has scrapped the previous government's plans to regulate the private rented sector. Unfortunately for leaseholders and reputable managing agents, this appears to include scrapping plans to regulate agents which manage blocks of flats and their service charge funds. Shapps believes that the powers already held by local councils are sufficient to deal with renegade agents.

See Department of Communities and Local Government (DCLG) press release.
Posted 11/06/10

Leaseholder Stands at General Election

If you live in Bognor Regis and Littlehampton you could vote for a leasehold reform campaigner to become your MP. Melissa Briggs is standing for the Carlex Leasehold Independence Party (CLIP). By standing as a parliamentary candidate, Briggs hopes to generate publicity and increase the profile of the Campaign Against Retirement Leasehold Exploitation (CARLEX) and its crusade against malpractice in the leasehold retirement sector.

As publicised in the Newsletter, the FPRA sought the endorsement from politicians on three key areas:

Posted 2/05/10