City Heights Update & Fortune 500
By admin | March 15th, 2010 | Category: Past Articles | 13 commentsResidents from City Heights (victorious in one of the biggest LVT cases in the UK) have provided us with an update on how things are going following the LVT decision.
Separate from the LVT decision the team running the City Heights LVT have been trying to trace and identify missing reserve funds for the six apartment blocks at City Heights ready for a handover to a new property management company on 01/04/2010 now they have sacked Solitaire.
On Thursday 11 March 2010 Solitaire sent a further statement with 18 exhibits to the LVT Chairman stating that missing reserves were spent on the estate, providing more invoices, receipts and supporting documents never ever before produced in the past 2 year case or on any of the 6 days of the LVT Trial!
Solitaire to date still have not paid a penny and negiotiations between the City Heights Residents Association and Solitaire have broken down and have been suspended while the Association goes back to the LVT. Solitaire have also found more receipts and invoices and are planning to re-balance 2008-9 Service Charge Year which was determined at the LVT and cannot be re-balanced without an application to the LVT by Solitaire!
The City Heights Team are on the verge of new County Court action against Solitaire for breach of Trust for missing reserve funds.
The finacial accounting at City Heights is in a complete and utter mess. Thanks Solitaire! (Property Manager) Thanks e&m! (Freeholders Agent) Thanks Holding & Management Solitaire Ltd (Freeholder)
Those of us that have been privileged to have access to our accounts will be fully aware of the shambolic accounting that has taken place / still is taking place, but the excuses Peverel Group / Solitaire continue to make are inexplicable and is surely a reason why further investigation must be undertaken by the law.
City Height’s also have a message for the other ‘lucky’ members of the ‘Fortune 500′.
Message for the FORTUNE 500 from FORTUNE 1 (City Heights)
SOLITAIRE’S LANDLORD ELECTRICITY/GAS ACCOUNTS
Having heard the team leading the Weekday Cross LVT say their Electricty Landlord Supply Bills show VAT at 17.5% too it must be concluded that all the FORTUNE 500 Communal Electricity Accounts with Solitaire are wrong and VAT is being billed at the wrong rate, meaning Leaseholders are being overcharged. At FORTUNE 1 (City Heights) VAT on 19 Communal Electricty Accounts in six separate communal blocks has been 17.5% from 2003 to 2010 (although the 15% change was implemented when appropriate). Massive over payment!
Basically VAT on domestic properties should be 5%. This is extended to Landlord Supplies to communal areas!
Here is the legal explanation……..
The VAT Act 1994, Schedule 4, Paragraph 3 defines any supply of heat, power, refrigeration or ventilation as a supply of goods.
Supplies of fuel and power are subject to the standard rate of VAT unless there is a provision for a reduced rate for a qualifying use.
Qualifying use means:
“domestic use”; or
“charity non-business use”.The legal provisions for the reduced rate are in the VAT Act 1994, Section 29A.
The following supplies are charged at the reduced rate:
- fuel and power for domestic use
The following are treated as domestic use if they are part of the same residential unit:
- subsidiary buildings situated a short distance away, such as a garage in a block located away from a house; and corridors, lifts, hallways and stairways in a residential unit.
HOW DO YOU ATTACK THIS ISSUE AT AN LVT?
Prior to an LVT you need to do the following:
1. Ask Solitaire to supply you with copies of all the Landlord Supply electricity bills for all the Service Charge years you wish to challenge. You can make this request pursuant to your legal rights under Section 22 Landlord & Tenant Act 1987 (You have better chances of getting an audience with the pope than receiving these so move to step 2)
2. Access all the communal Landlord Meters on your premises and note the location of the meter and the SERIAL NUMBER!
3. Quoting the Contracts (Rights of Third Parties) Act 1999 write to your Communal Electricity Supplier and request copies of all the Landlord Supply bills for the period you wish to challenge. Section 1 of the Contracts (Rights of third parties) Act 1999 gives the right to receive information from a contract if the third party is bestowed a benefit from the contract. As Leaseholders we pay the actual bills and receive the benefit of the use so we clearly can use this legislation to advance our rights. If you do not know who the supplier is that is not a problem. Any electricity/Gas supplier has access to the national database and with any meter serial number they should be able to trace the supplier and point you in the right direction. Some Electricity companies may not know about this legisllation so you may need to ask the companies business department to refer this request to their legal department. This legislation works and has been used many times for Leasehold issues.
4. When you get the copy bills look at what rate of VAT you paid. It should be 5%. If not you should present these as part of your LVT case and ask the Tribunal to find that the difference between 5% and 17.5% (or 15%) has not been reasonably incurred using the legal explanation above. Easy as pie. (lol)
CAN I CHALLENGE THIS SITUATION NOW WITHOUT GOING TO AN LVT?
Yes. Cut and paste the legal bit above into a fresh email and send to your Solitaire property manager telling them to contact the electricty supplier immediately and get the rate changed to 5% asking the supplier to start calculating a refund! Keep an eye on this issue to make sure the refunds do actually come back in the Service Charge accounts! (DON’T DO HALF A JOB) (DONT TRUST THEM) Ask Solitaire to copy you into all emails they send to the power supplier. Print them off and keep them in a new folder! Get organised.
This is invaluable information for other developments that are in the process of commencing LVT action and do feel free to ask any questions relating to the above, as City Heights are an active contributor to TTAS.
Finally, we have a request for anyone interested in having their experiences / stories heard, who have issues with Peverel (and associated companies), in particular those in Shared-Ownership schemes.
Please contact us with details of your issues as we are currently collating information to provide to media sources and if you are happy for us to forward your contact details, please let us know.
Send any correspondence to the usual address, that is found on the Contact Us page.
Well how disgraceful. I kind of expected Peverel to appeal against the City Heights decision, but it sounds like they are just going to try and cheat people out of the award. I would not hesitate to take Peverel to court, make sure Billson is named, the publicity would be magnificent.
It teaches me that in the process of LVT and RTM, make sure you retain leverage to ensure Peverel continue to co-operate.
The VAT scam on power is unbelievable – the accounts are supposed to be audited, and yet this has been going on for years.
I must admit I haven’t researched this, but surely charging VAT at the wrong rate is breaking some law or other…???
Surely the original bill/s as issued by the electricity supplier will have shown the correct VAT rate of 5%, in which case who has then allowed the amount added to the service charges to show 17.5% (or 15% during the recent reduction)…??? And what explanation can be offered for billing at the wrong rate…???
If it was an error on the original bill/s from the electricity supplier, then they should be reinbursing the over-spend. BUT, why wasn’t the problem picked up by Solitaire / Peverel upon receipt of the bills…???
Perhaps Andy can shed some light on what is going on, and how many other developments are affected by this issue…???
Hi
This latest email has compelled me to send a quick post. I’ve been following the various threads for a while given that I own a flat in South Manchester which is “run” by Solitaire.
One additional avenue of attack regarding any inaccurate charges / accounts concerns the Proceeds of Crime Act – if you receive accounts which include items which have not been requested or even used – we were charged for scaffolding which was never erected – then if the auditors are put on notice, they are under a legal obligation to notify SOCA and indeed there is nothing stopping people formr eporting directly. NB. if you notify SOCA, its an offence to then tip off so c.f.
The failure to identify reserve funds and hand them over is a disgrace. It’s a shame that the LVT has no power to award sensible damages against the Consensus Business Group.
We have already proved beyond doubt that Peverel is not at all well run and a shambles but we can’t jump to conclusions from one site.
There is something really fishy about our electric bill which has gone down in years when national prices went sharply up and vice versa. I still have not got to the bottom of this. In trying to I did obtain the electric invoices for last year and the VAT is definitely charged at 5%. In our case Peverel employ Maks Consultancy to select the best tariffs. In my career some of my employers also employed specialist consultants to do likewise.
On the other hand I have shown you that in our case the accounts are not audited properly or done for the benefit of service charge payers. There should be regulations that the service charge payers and not the managing agent or freeholder appoints the auditor.
I ought to point out that our block was not managed by Solitaire but by PeverelOM. It seems a good assumption that TTAS has made that most original Solitaire managed sites could have this VAT mistake.
Sorry to hear that ‘City Heights’ are still battling, but sadly not really surprised at this news.
Regarding electricity – a Site Manager (whatever that is in OM land) told me last year that Peverel had negotiated special rates with EDF; that that time EDF’s normal tariff was about 18p per kilowatt / unit. But when I asked what this special rated was, I didn’t get an answer!
And for Neil and others that might be affected – MAKS CONSULTANCY -I knew it rang a bell and I’ve just turned up the relevant LVT determination in which I first heard about them
It’s in the London Residential Property Tribunal Service Leashold Valuation Tribunal ref LON/00BK/LSC/2008/0493. Date of Hearing 24/03/09 Date of Decision 28/04/09.
I have the complete document and will pass to ADMIN – it’s a very interesting one as most of the decisions were in the Applicants favour.
I quote: “Electricity Supply and bulb replacements
41. Initially Mr XX challenged both the charges for electricity and bulb replacement costs. At the hearing he decided only to contest the electricity charges. In particular he questioned the level of charges for the years 2003, 2007 and 2008.
42. The Tribunal was provided with the invoices and an audit trail for electricity charges. Ms YY said that the costs charged were the costs incurred and fluctuations could be accounted forby different levels of consumption and variations in electricity charges. In 2007 Peverel decided to use a company known as Maks Consultancy as a broker for the placing of the electricity supply at the scheme. Maks Consultancy are not part of the Peverel Group and are independent. Their commission is based on 25% of the saving difference between EDF and the figure they negotiate. In 2007, it was said that Maks earned £1,615.62 which is 25% of the saving achieved plus VAT. Thus £1,615.62 net of VAT multiplied by 4 is the total amount that MAKS saved the scheme for that year.
43. Mr XX pointed out that the bulk of invoices are estimates and surmised that this may have caused a problem in terms of accurate billing. His main contention at the hearing however, was that the cost of the commission to Maks Consultancy was not justified…etc….”
JUDGEMENT:
” Electricity supply and bulb replacement
64. The Tribunal decided that the commission paid to Maks Consultancy in 2007 and 2008 should be disallowed. There was nothing in the evidence to demonstrate that by using Maks, Peverel had effected a saving in the cost of electricity. On the contrary, the bill produced by Mr XX showed in fact that better night rates had been obtained by Messrs ZZ without the intervention of a broker.”
Full LVT hearing papers winging their way to ADMIN once I’ve added this comment.
Oh Archangel,
With your revelations about MAKS you are damaging my confidence in Peverel. It is remarkable that almost everything in the provision of our services is not what it seems.
I requested copies of the electric bills last year and we paid 7.03p in one quarter and 8.633p in another. Yes I have an invoice I didn’t understand and had ignored showing Maks were paid 25% of ‘Total Saving’.
I was already aware that I need to get to the bottom of light bulb replacement for previous years. As several of us were not content with the cleaning a couple of years ago we wanted to say something to the cleaner. We requested from PeverelOM to know exactly what the contract included. One of the items was replacing the light bulbs.
Following the accounts last year I requested a copy of all invoices over £100. One of these was from a firm of electrical contractors for £354.71 for replacing 11 light bulbs. They had to make a round trip of 140 miles to do this, even though Peverel had already contracted with the cleaning company for this task. Wonder what the LVT will make of this? Roll on RTM.
Dear All
After continually asking for a copy of the original Insurance rebuild value for our develoment we were informed that the rebuild value was based on the RICS method.
I have been made aware that at some point a valuation must have taken place however we have not received a copy of this.
BUT for some reason our ex property manager sent us a copy of a Reinstatement Valuation carried out by a Cunningham & Linsey on 12th October 2009.
Two things stand out here. Firstly we had served notice on Solitaire and were to take over RTM on November 25th 2009 and the current insurance via Oval et al ran until March 2010.
So why would this valuation have been arranged?
My only thought being it was part of the Fortune 500 and they for some reason had all been revalued?
We have yet to receive 2009′s accounts but if as I suspect we were charged for this then I will demand I refund of costs.
Lastly the company that carried this out are known more as loss adjusters???
Any comments?
Peverel used C & L twice on my development, I wonder if they are part of the Peverel/CBG crowd. The fee for the revaluation was about £750.
It is standard industry practice to perform an “independent” revaluation every 10 years or so, for insurance purposes, to be sure that your building and decorations are not under-insured. It seems it is a valid thing which the manager is obliged to do. Your timing is a bit suspicious, but you can now use the valuation to arrange insurance when you take over.
I believe the normal policy anniversary for the Zurich/Oval/Kingsborough/Peverel arrangement is 1 July. We took over at the start of April, but Peverel have been witholding the claims history for our block which has prevented us from cancelling the old policy in favour of a new one, which would have saved around £125 per month.
Charles
I went direct to Oval for the information, the details are below
Dear Mr Dyson
I apologise for the delay in responding to your email below, please find below the previous insurance premiums for 1-19 Old School Court:
(Information removed)
We are unable to provide you with the revaluation report, but your freeholder would be able to provide this for you.
Please find attached a copy of the claim history for the policy.
I will forward copies of this by post.
We trust this to be in order.
Kind regards
Ann Sturgess
Account Handler
Oval Insurance Broking Limited
Metro House
Northgate
Chichester
West Sussex
PO19 1BE
Ext: 5714
Direct Dial: 08458 725 714
http://www.theovalgroup.com
Oval Limited
Registered office: 9 South Parade, Wakefield, WF1 1LR
Registered in England No: 01195184
Authorised and regulated by the Financial Services Authority
We have already arranged insurance and including Directors cover it was £1100, Oval were charging £3400!
My confusion arose as the rebuild cost has never been below £1.6 million but these individuals priced it at £1.4 million, our new policy is £2.2 million yet over £2000 cheaper.
The only difference is we chose not to take specific terrorism cover.
We went with Lansdown and the insurance manager was Mr Tim Davies and extremely helpful. They provided insurance and it was amended when we finally got the claims details.
Hope this helps?
——————————————————————————–
Cunningham Lindsey are just Loss adjuster firm, who take claim on behalf of the Insurance Company to settle with the claimant. There job is to interpret the Insurance Policy and then settle claim.
Zurich and Aviva ( Norwich Union) use the same Loss adjuster. They do have another Company they use for surveying and restoration . I was told that they are CL branch.
There is a coincidence that Revival and Clean safe both were “signed off”, who caused damage and work was not approved or signed off by me but they got paid. No investigation took place. Revival was appointed by Peverel and Cunningham Lindsey is appointed by Norwich Union who contracted Clean Safe.
Why no investigation and why the Aviva is paying for the job that is badly done. My health, loss of money and complaint has no valve and can be dimmissed.
Jon Dyson,
In my opinion the Reinstatement Valuation your property manager sent you is the Rebuild Value you are seeking.
According to our last accounts which claim to be audited but are not we too had our property revalued in early 2009 by a ‘Chartered Surveyor’. It cost £900. When I asked for a copy of the valuation it was by Cunningham Lindsey Ltd who are not Chartered Surveyors.
For reasons, it depends whether or not you subscribe to the conspiracy or cock-up theory of life. IMHO Peverel is a curious mixture of both. I have found the staff I deal with to be good people who would like to do a good job. However because they are not given the resources they require the standard of actual work is very low with lots of mistakes through overwork. Estate managers have to look after twice as many properties as in other firms. My conclusion is that the staff are not given the resources they need in order to boost the profits to pay the bondholders. Was it a mistake that you were revalued because they just forgot that you were already a lost cause? Or deliberate to boost the profit? Was it deliberate that Kingsborough aka Peverel ignored the new valuation when insuring our building because it was lower than the insured valuation and would produce less profit to them or just a mistake? Funny that all the mistakes are one way though.
Well I don’t know whether Cunningham Lindsey are surveyors or not, they seem to be a significant firm, with no known links to Peverel or CBG. There is nothing in the report or the valuation which causes me concern, and I accept that it was necessary.
Our most recent “Valuation for Insurance Purposes” was carried out in March 2009 by an A. Scott Longmuir who signed as an Associate Member of the Chartered Institute of Building – this sounds like a recent graduate rather than a qualified chartered surveyor, maybe you don’t have to be though.
I have asked our new broker to arrange an insurance quote on the basis of informal claims history, and subject to adjustment when the full history is made available.
As Neil says, you can get paranoid when dealing with Peverel. There are cases where they have been misleading, obstructive and devious. And yes, most of us have the feeling we have been ripped off. However, I too suspect much of their bungling is chaos rather than conspiracy, no-one could be that incompetent on purpose.
On the other hand, just because you are paranoid doesn’t mean they are not out to get you.