Why are Peverel/Firstport so bad? Why is their service so appalling? Why are their charges so high? Why do they engage in so many scams? And why can they never change?
For the answer we have to go back to the original business model, when Peverel/Firstport was part of the Tchenguiz Family Trust Group and thus connected to the freeholders.
Vincent Tchenguiz worked out a unique funding scheme for the purchase of the freeholds. To secure the loans that he needed he found most inventive methods of valuing the portfolios. so they were not just valued at book price, the value of future revenues were factored in.
Bear in mind, a freeholder is allowed to recover expenses to maintain a property but not profit from it,nor could they simply write themselves a cheque from service charge accounts.
But what Tchenguiz realised what he could do is appoint an associate company to manage his portfolio, and they could skim off the service charge funds and direct the money back to the Tchenguiz Family Trust, which could then be used to fund the loans taken out to buy the portfolio.
Hence Peverel/Firstport, who were also granted leases on House Manager's flats and every scrap of land surrounding buildings to put value into the company so they too could borrow money against their assets.
Hence the insurance commissions, overcharges, needless work and all the associated scandals that Peverel/Firstport are so well known for.
For the buisness model to work, the freeholder needed Peverel/Firstport and Peverel/Firstport needed the freeholder.
This worked well for some years until the Icelandic bank crash which exposed both Tchenguiz brothers who had guaranteed each others loans.
Both the freeholder and Peverel/Firstport were left with huge debt mountains, which could never be repaid.
Tchenguiz technically was allowed to keep the portfolio, though it was in name only to allow for ordered sales of the portfolio, whilst Peverel/Firstport holding companies were put into administration, where it remained for at least 14 months, being saved days before it would have to have been liquidated.
The terms of the buyout have always remained obscure, but it has been established that much of the money put into Peverel/Firstport is treated as a loan and the owners are charging penal interest rates of between 9% and 15% and are being repaid by Peverel/Firstport.
One condition of the rescue, was that the freeholding and managing companies had to be separated. now the link was broken. the business model collapsed.
Both businesses are now effectively controlled by financial institutions. The main goal is to get their investments back.
In the case of the freeholder that means selling the properties. For Peverel/Firstport that means getting them to repay interest and loans, whilst having to pledge all their created leasehold assets to the institutions and sell what they can as is the case with house manage flats to raise funds.
Peverel/Firstport are under enormous pressure as they only have a finite time to achieve the institutions objectives. They can only repay whilst they have the critical mass to do so. Once the number of developments falls below a certain level, they cannot generate enough income to support their loans.
They are taking full advantage to raise as much as they can, while they can.
It is all about debt. People may well have seen the Knight Square accounts, which at first glance looks quite reasonable. The devil is hidden in the detail.
That is where the trail begins to show the true group debts.
Will Peverel/ Firstport change? No.
Could Peverel/Firstport change? No.
Why can't Peverel/Firstport change? Trading in an honest manner would not generate the income to service the loans.
