The problem is that the residents, because they are leaseholders, have little say over the running costs. They don't own their homes outright but buy on a long lease. A landlord owns the buildings and grounds, and a management company oversees day-to-day services.
Services such as the provision of a warden, cleaning and maintenance, have to be paid for by the residents through a monthly service charge. But they have precious few rights when it comes to how much they pay or how the money is spent.
It's not cheap either. Someone living in a two-bedroom bungalow may have to pay pounds 80 a month in service charges. For the retired on a fixed income it can make quite a dent in their budget.
Peter Wall, 68, is just one resident who has been battling with various management companies over the years about his service charges. Eight years ago he bought his two-bedroom bungalow in a neat development in Luton for pounds 65,000.
The glossy brochures that he was given at the time pointed out that the development was specifically designed for elderly people "who are looking for a less costly and more manageable alternative to their present home".
Mr Wall doesn't think it's more manageable. Each year his service charge has increased. This year the management charge, money the management company receives directly, increased by over 65 per cent, and Mr Wall feels very frustrated at the way things have been handled. "I tried to find out why it went up so much, but all they'd tell us was that the fees had to rise by 65 per cent because we'd been paying too little for the last couple of years."
The Retirement Care Group has managed Mr Wall's development for the past two-and-a-half years, but at the beginning of July it sold the management contract to another company called Peverel Retirement Care Group and it said it could not comment as it does not manage the development any more - this despite the fact that it was in control when the fee increases were imposed.
Mr Wall says this is just one of many frustrations that he has experienced over the years. "In the past eight years we've had seven different managing agents," he says. "During that time we've been left without a pull-chord alarm system for several weeks, and without a resident warden for a number of months."
Peverel, the new manager, is the biggest in the business. The company manages more than 30,000 sheltered accommodation bungalows and flats. Peverel's managing director, Nigel Bannister, admits that leaseholders like Mr Wall don't have much power under current legislation if they do not like what is happening.
"Residents can challenge service charges which they think are too high by going to a Leasehold Valuation Tribunal, but we know it can be a fairly tortuous process, especially for elderly people," Mr Bannister says. He adds that Peverel's policy is to try to settle disputes amicably before they need to go to an LVT.
In many disputes problems stem from the rapid succession of landlords and managing agents.
Residents can feel very confused about who they are dealing with, according to Stella Evans of CARL, the Coalition for the Abolition of Residential Leasehold. "In developments like Mr Wall's the turnover of management does nothing to help the confidence of the leaseholders," she says. "Unresolved complaints will always add to frustration."
Most of the complaints that Ms Evans receives focus on rising service charges and poor value for money. She is convinced many elderly leaseholders will continue to get a raw deal until they have more control. "The problem always comes down to one party, the managers, spending someone else's money - in this case that of elderly residents.
There needs to be more transparency about how the money is spent, more consultation and more communication about future plans."
The MP for Clwyd West, Gareth Thomas, also thinks the system needs to be changed. He tabled a 10-minute rule Bill in the House of Commons earlier this year, recommending a cap on management charges for sheltered accommodation.
"There's an in-built tension with purpose-built retirement housing," he says. "The managers' need to maximise profits conflicts with the needs of the leaseholders who've signed up to a long-term arrangement. Many elderly people don't want to rock the boat and just put up with it rather than complain."
Checklist: before you buy a sheltered home...
Ask people who already live there if they are happy with the service which they receive.
Ask for accounts for the past few years, so that you can see exactly how high the service charges are and what they have increased by.
Ask for the management company to be very clear about exactly what the warden (or house manager) will actually do.
Ask the managers to explain exactly what the emergency monitoring service will provide.
Make sure your solicitor checks the lease in detail; it is your contract and will set out in detail what services you can expect.
CARL: PO Box 3076, Littlehampton, West Sussex. BN17 5BT;
For Age Concern leaflets on sheltered accommodation, see local branches.
AIMS (Arbitration, information, mediation for sheltered accommodation) is on 0171-383 2006.Reuse content