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

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?

News
Susan Sarandon described David Bowie as
peopleSusan Sarandon reveals more on her David Bowie romance
Sport
sportDidier Drogba returns to Chelsea on one-year deal
News
people
Arts and Entertainment
Christian Grey cradles Ana in the Fifty Shades of Grey film
filmFifty Shades of Grey trailer provokes moral outrage in US
PROMOTED VIDEO
Sport
Louis van Gaal would have been impressed with Darren Fletcher’s performance against LA Galaxy during Manchester United’s 7-0 victory
football
Voices
The new dawn heralded by George Osborne has yet to rise
voicesJames Moore: As the Tories rub their hands together, the average voter will be asking why they're not getting a piece of the action
Sport
Dejan Lovren celebrates scoring for Southampton although the goal was later credited to Adam Lallana
sport
News
newsComedy club forced to apologise as maggots eating a dead pigeon fall out of air-conditioning
Arts and Entertainment
Jo Brand says she's mellowed a lot
tvJo Brand says shows encourage people to laugh at the vulnerable
Life and Style
People may feel that they're procrastinating by watching TV in the evening
life
Sport
Rhys Williams
commonwealth games
News
Isis fighters travel in a vehicle as they take part in a military parade along the streets of Syria's northern Raqqa province
i100
Arts and Entertainment
Southern charm: Nicolas Cage and Tye Sheridan in ‘Joe’
filmReview: Actor delivers astonishing performance in low budget drama
Life and Style
fashionLatex dresses hit the catwalk to raise awareness for HIV and Aids
Travel
travel
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Senior Risk Manager - Banking - London - £650

    £600 - £650 per day: Orgtel: Conduct Risk Liaison Manager - Banking - London -...

    The benefits of being in Recruitment at SThree...

    £18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...

    Test Analyst - UAT - Credit Risk

    £280 - £300 per day + competitive: Orgtel: Test Analyst, Edinburgh, Credit Ris...

    Trainee Recruitment Consultants - Banking & Finance

    £20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

    Day In a Page

    Backhanders, bribery and abuses of power have soared in China as economy surges

    Bribery and abuses of power soar in China

    The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
    Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

    Highland terriers steal the show at opening ceremony

    Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
    German art world rocked as artists use renowned fat sculpture to distil schnapps

    Brewing the fat from artwork angers widow of sculptor

    Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
    BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

    BBC takes viewers back down memory lane

    The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
    Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

    Nicolas Cage shines in low-budget drama Joe

    Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
    How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

    Make your own ice lollies and frozen yoghurt

    Think outside the cool box for this summer's tempting frozen treats
    Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

    Fiesta is UK's most popular car of all-time

    Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
    10 best reed diffusers

    Heaven scent: 10 best reed diffusers

    Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
    Commonwealth Games 2014: Female boxers set to compete for first time

    Female boxers set to compete at Commonwealth Games for first time

    There’s no favourites and with no headguards anything could happen
    Five things we’ve learned so far about Manchester United under Louis van Gaal

    Five things we’ve learned so far about United under Van Gaal

    It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
    Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

    Screwing your way to the top?

    Good for Lana Del Rey for helping kill that myth, says Grace Dent
    Will the young Britons fighting in Syria be allowed to return home and resume their lives?

    Will Britons fighting in Syria be able to resume their lives?

    Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
    Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

    Beyoncé poses as Rosie the Riveter

    The wartime poster girl became the ultimate American symbol of female empowerment
    The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

    The quest to find the perfect pair of earphones

    Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
    US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

    Meet the US Army's shooting star

    Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform