Julian Knight: Minister says all is well with leaseholders. He'd better think again...
A new fire escape? That'll be £32,000. How leaching management companies are making lives a misery
Sunday 11 July 2010
Imagine a thirty-two grand bill hitting your doormat threatening legal action unless it's settled with a month. Not a nice thought is it? But that's exactly what happened to a friend of mine last year. He had already spent a fortune on a shoebox in London, but as a leaseholder he was also subject to the whims of a management company, appointed by the freeholder.
The bill was for a new fire escape. Suspicious, and frankly petrified, he got a builder to quote for the job and it came to just £8,000. Delving deeper, my friend found that the management company was actually operated by the freeholder and – get this – the £32,000 quote came from a firm owned by the brother of the freeholder.
In any other part of daily life, the freeholder and his brother would more than likely be had up for fraud. but not in the arcane world of freeholders, leaseholders and management companies. Instead, he threatened them with a tribunal and a settlement was agreed. As we catalogue on pages 92 and 93, my friend's case is not isolated. Here at the IoS we are getting complaints from across the country about management companies, their disproportionate service charges and overcharging for maintenance work.
I suspect that management companies seeing interest rates at historic lows are trying to take a slice of their leaseholders' higher disposable income. And this is no longer just a London problem, the massive apartment developments in the northern city centres mean many more have to deal with management companies – some of which have been bought out by private equity and therefore have to pay the inevitable debt by increasing their revenues – in other words, the service charge.
Until two months ago, I too had to deal with a management company which had put up my service charge 40 per cent in four years – about three times inflation – and tried to get away with overcharging for redecoration work (They didn't succeed.), and that was a supposedly goody-two-shoes housing association.
In response, the management companies say that leaseholders can fire them and bring in their own firms. But this needs more than 50 per cent support and in developments with lots of buy-to-let properties it is often impossible to get the required numbers to kick the leaching company out.
What's the response of Grant Shapps, pictured, the Housing minister? To say that all is well and leaseholders think they are getting value for money. I'm afraid, Mr Shapps, you are either deluded or simply don't give a damn, if you believe the system offers enough support to leaseholders, and I don't need Paul the octopus to predict that as interest rates go up, the ever-rising service charge and rogue management firms will become a bigger headache.
Eggs and basket
It looks like, after 129 years, the Children's Mutual – formerly the Tunbridge Wells friendly society – is under threat. It closed to nearly all new custom last week after the Government's decision to kill-off child trust funds, a massive part of its business.
It's pretty amazing that the Children's Mutual could allow its business to be so decimated by the stroke of a pen in Whitehall. The mutual grew apace on the back of CTFs but didn't diversify. I met its affable chief executive, David White, on several occasions, and each time I put it to him that I thought that the first fiscal tightening would do for CTFs. His response? Any government doing this would be swept away on a tide of middle-class parental anger. Think poll-tax riot conjoined with a National Childbirth Trust class. The reality, though, is the death of CTFs has been quick, clean and has barely created a murmur – and with it may have gone the Children's Mutual. What's that phrase? Don't put all your eggs in one basket.
Feeling the pension pain
Pension cuts such as the decision to link future rises in final-salary scheme payouts to CPI rather than RPI are nothing to cheer about but, let's be honest, we are getting pretty used to the "c" word. As someone in his thirties with a couple of final-salary schemes behind him, I can expect the decision to slash 40 to 50 per cent off my pension income by the time I retire. Obviously, I'm not happy. I'll have to save more and diversify further. But, then, as I left these firms after just four and five years respectively, is it fair to expect them to continuously top up my pension payout by RPI to the detriment of their current employees and the business?
- 1 Malaysian cyclist could face disciplinary action after 'Save Gaza' gloves protest
- 2 Is Gideon Levy the most hated man in Israel or just the most heroic?
- 3 McDonald’s removes chicken nuggets from the menu in Hong Kong amid major food scare
- 4 Students offered grants if they tweet pro-Israeli propaganda
- 5 Satellite full of sexually experimental geckos adrift in space, Russia loses control of mission
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Arizona execution lasts two hours as killer Joseph Wood left 'snorting and gasping' for air
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: Massive rise in sale of British arms to Russia
iJobs Money & Business
£600 - £650 per day: Orgtel: Conduct Risk Liaison Manager - Banking - London -...
£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...
£280 - £300 per day + competitive: Orgtel: Test Analyst, Edinburgh, Credit Ris...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...
Day In a Page
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000
A 17th century four-bedroom house, with open fireplaces, cellar and pool, £600,000
A three-bedroom, coach house with luxury open-plan living space and contemporary breakfast bar