Firstport are under pressure to sell their(undisclosed) leasehold interest in House Manager's flats, but cannot do so unless they can persuade leaseholders that dispensing with a live in house manager will lead to substantial savings.
They are shortly about to launch an initiative aimed at leaseholders under the guise "Residential or Non residential house manager? It's your choice?"
You will be told that" many savings can be made from changing from a residential to non residential house manager"
You will be told that if you "opt for a non residential manager the house manager's flat can be sold and that the maintenance for the house manager's flat currently being paid for by the residents will now be paid by the incoming leaseholder"
You will be told that " the house manager's flat is due for decorations which can be avoided if the flat is sold".
You will be told that the "hours that a residential house manager worked compared to a non residential manager will be covered by Careline"
You will be told the "name of the freeholder of the flat"
You will be told you will "achieve great savings" and that the move to a non residential house manager is "purely to save you, the leaseholder money"
You may be told that your service charge account may "benefit from a goodwill gesture of £10,000"
And now for THE TRUTH!
When you buy a flat in a development with a live in house manager, you expect to pay for a live in house manager and you expect to pay for the upkeep of that property. You may not be aware that the "loss" to the developer of having a flat that canot be sold is mitigated by increasing the purchase price of the remaining flats.
So having a live in house manager has been paid for already and of course is a valuable facility that enhances the value of the property.
A house manager's flat is a restricted asset in that it can't be sold on the open market as it is resticted to the use of a live in house manager. it is akin to a tied cottage.
it is believed at a time of financial distress for McCarthy & Stone a rescue package was dependent on spining off Peverel/Firstport from McCarthy & Stone.
But this required Peverel/Firstport to have a material worth?
So a scheme was devised to grant Peverel/Firstport leaseholds on all the house manager's flats. Thus an asset was born.
If the flats could be valued at £250,000 and there were 800 such flats an asset has been created amounting to £20,000,000.
And what was the first thing Peverel/Firstport did with these assets? What they always do? They mortgaged every house manager's flat, knowing their charges would cover any interest.
It has never been denied by Peverel/Firstport that in some instances (doubtless an "administrative error") some of the house manager's flats were mortgaged without the lender being made aware that the flats were for restricted use and therefore of lesser value.
Due to continued Peverel/Firstport poor trading and the increasing financial pressure they are coming under they have to sell off house manager's flats to raise cash.
But of course they have a major problem? They cannot sell their leasehold interest, whilst the flat is designated as for the use of a residential house manager?
So they need to persuade leaseholders that it would be in their best interests to dispense with a residential house manager, thereby freeing up the flat and allowing Firstport to sell.
Why so concerned to save leaseholders money Firstport even pay substantial commission to house managers and area managers as well a "bribing" developments with a £10,000 contribution if leaseholders are prepared to dispense with the residential house manager?
Thus far Firstport has neglected to inform leasseholders, that they have a vested interest in the sale of a house manager's flat. that the house manager and area manager are on a substantial bonus if the flat is sold.
They will not want residents to know, that a "confidential" letter recentky went out bemoaning the lack of sales and putting pressure on Firstport staff to increase the number of sales. The letter also increased the amount of commission paid to Firstport staff.
Research has shown that there can indeed be savings from a switch to a non residential manager.
However, the average saving has been put at around £4 per week.
This does not take account of any fall in value of a development flat?
Any "take up" by Careline should be tempered by the knowledge that this was the company that admitted to price fixing 65 developments and who charge nearly double what any other similar company does whe applied to a Firstport development? (Careline is of course a Firstport company)
And now we come to a major problem?
You will be told that any decision can be made "by a simple majority?"
This is wrong in law. The reason being is that a variance of lease is required? And for a variance of lease a 75% majority is needed.
As a leaseholder your lease will have a provision for paying a contribution to the upkeep of the house manager's flat(That is right and proper).
Now if the lease of the house manager's flat is sold off, clearly the new leaseholder has to pay their share of the service charges (which is where the Firstport argument about savings come in?) Firstport would say that a leaseholder no longer has to contribute to the upkeep of the former house manager's flat.
And it is not doubted that they would re-apportion service charge demands.
The trouble then is that this is unofficial and not according to the lease(which is an important legal document and must be adhered to)
One lease cannot be varied without affecting other leases, so they all need to be changed. Technically(and with the agreement of a 75% majority) a variance of lease is a simple procedure costing a few pounds.
Why does Firstport not do this properly?
Probably because, such is their desperation to sell, they cannot risk not getting a 75% majority?
The very survival of Firstport is dependent on house manager flat sales.
