In this case the couple in question were Fairhold/Proxima represented by Estates & Management and Peverel/ Firstport reresenting themselves. The children being the leaseholders.
Several years ago in a brilliant piece of research, Charter Quay Residents Association published an easy to understand flow chart that demonstrated how the freeholding and management companies were set up in a way that worked against the interests of leaseholders.
It showed that despite the law that a freeholder should not make a profit from maintaining their interests, they could easily get around this by appointing connected companies to manage. They could write into contracts that the management company could keep any benefits from commissions or bulk purchase rebates. They could use the services of an in-house insurance broker and profit from providing those services.
Ways could be found to direct the profits made by Peverel/Firstport back to the freeholding companies based in the Britiish Virgin Isles.
The basic idea was that funds would be borrowed to purchase freeholds. through excessive charges, the managing agent would pass enough of the profits on to the freeholder so that the freeholder could pay the interest on the loans.
Additionally, terms and conditions could be put in the lease to generate extra income.
Hence exit or event fees, permission to sub-let, decorate, change mortgage or huge unjustifiable administration charges were brought in.
Effectively, when it is the managing agent that generates the excessive income, that income comes from you, the leaseholder.
As the empire began to collapse, desperation to increase income increased as the freeholding companies began to default on loans.
This was the genesis of the price fixing fraud and the many other scams such as the sale of house manager's flats or having work done that was over priced and not needed that Peverel/Firstport residents became victims of.
When under pressure of massive debts Peverel/Firstport was placed into administration, the only way that they could be rescued was if they broke away from the freeholding companies once it became clear that the freeholding companies could not buy back Peverel/Firstport.
Within days of Peverel/Firstport coming out of administration backed by loans from Electra at rates of between 9% and 15%, the freeholding companies were forced by the financial institutions to off load their assets.
The problem now being that the circle was broken. The freeholding companies could no longer receive the cash they were getting from Peverel/Firstport, which meant they lost the funds they relied on to service their loans. This led to the freeholders defaulting on even more of their loans.
In the meantime, Peverel/Firstport were now able to keep the funds to themselves in order to service their debts.
Peverel/Firstport who had largely relied on their former connected freeholding companies for the majority of their appointments soon suffered a financial blow, when the freeholding companies via Estates & Management took away much of the block insurance work and ground rent collections away from Peverel/Firstport.
This meant a large proportion of the income that Peverel/Firstport used to find ways to pass on the profits to the freeholders, now went direct to the freeholders, but it severely reduced Peverel/Firstport income.
The consequences of both companies that needed to be joined to survive and have been forced to separate is well and truly coming home to roost.
From working together as a couple they have had a messy divorce and their is no love lost between the two.
It is the children (The Leaseholders) who are paying the price of being stuck in the middle of the two factions.
The war has been intensified recently by the actions of the freeholders who are "encouraging" leaseholders to leave Peverel/ Firstport in order to be managed by the freeholder's choice of managing agent.
In this case that will either be Freemont Property Managers or Rendell& Rittner.
Both companies having their sights on taking developments out of Peverel/Firstport management.
In the case of Freemont Property Managers, they are run by the very people who instigated the complex frauds carried out against leaseholders to fund the freeholders.
It is no wonder then that Freemont Property Managers are the prefered choice of Estates & Management?
Anyone signing up with Freemont Property Managers is in reality putting themselves back in the abusive position they were before the companies split apart.
Rendell & Rittner are determined to end up as one of the largest property management companies in the UK. We have all seen what happens when any company dominates the sector?
Doubtless a very favourable deal has been agreed with Estates & Management if Rendell & Rittner take over the management of Peverel/Firstport developments.
It is of great significance that Jonathan Astle has left Firstport and joined Rendell & Rittner. He knows all the inside information Rendell& Rittner need to undermine Firstport as they cling desperately to the management contracts they still have.
The bottom line as far as the freeholders are concerned is that they need Firstport gone provided they can bring their "friendly team" in to manage.
In the guise of Estates & Management,they will fight tooth and nail any action that would reduce their income. Hence the "sincere concerns" expressed by the likes of Louise Smith at the thought of residents wanting any other company to manage them other than Freemont or Rendell & Rittner?
