The sub-let fee battle
By admin | January 13th, 2012 | Category: Past Articles | 37 comments
The subject of ‘sub-let fees’ has once again reared it’s ugly head with more landlords getting in touch to say that they dispute the excessive charges being demanded by Peverel related companies.
It’s not just landlords that are receiving such demands, even leaseholders that don’t rent their property out and actually live in it are being asked to pay a ‘sub-let’ fee!
When these leaseholders inform Estates & Management (who are working on behalf of Proxima GR Properties) of the fact they actually live there. E&M demand proof and still dispute this when it’s supplied.
In E&M’s usual non-de script way, they sign all correspondence as the ’Sublet Department’ so that no individual is mentioned. Therefore, making it incredibly difficult for residents to name names or accuse individuals of failing to do their job.
Another landlord also got in touch to tell us that that they feel E&M are moving the goalposts all the time and their reasons for this are based on the following:
Estates & Management who appear to be acting on behalf of Proxima GR Properties Ltd have asked me to pay a consent fee to let out my property.
I am the leaseholder and having checked your website, it appears that some other leaseholders are concerned about these on-going charges.
I have already made a payment last year of £85.00 and had to provide a copy of the tenancy agreement to E&M.
I have just received the e-mail below requesting another payment for my tenant.
Could you advise if I have the legal right to refuse paying such charges?
“We write to confirm that consent to let is issued on a per tenant per fixed term basis. When a tenancy goes on to become a rolling month to month contract we are unable to issue consent on a monthly basis or leave it open ended, as such unless a new fixed term is provided we will issue consent using the tenancy agreement original term – updated to the current year or as applicable.
For example, the tenancy agreement you provided us with for the subtenant had the original term of 6 months from 19th June 2010 to 18th December 2010. We therefore updated the consent for 6 months from 19th June 2011 until 18th December 2011.
The fee to renew consent to let for a further fixed term is £47.50 (50% of the registration fee) if the same subtenant is in place or £95.00 to register a new tenant and issue consent. These fees will be due whenever the consent to let term expires or when a new subtenant comes into occupation.
If you wish to provide us with a new fixed term for your current subtenant we will require something in writing and signed by the tenant. Your subtenant can agree to intend to stay in the property for any term up to 36 months in duration, their 30 day notice to leave still valid. We would then re-issue consent to let for this term and a renewal fee would only become due once this term had expired or when there is a change is tenants.
We trust this is acceptable and look forward to hearing from you soon with our clients fee of £47.50 and confirmation of the new fixed term.
If you require any further assistance please do not hesitate to contact me again.
Yours sincerely
Sublet Department
E&M
Another landlord who owns a property in The Collegiate in Liverpool, has also just received a very expensive charge that this time was sent by OM Property Management, regarding sub-leasing of their flat and claim it’s a registration fee.
We’re waiting on more details of this matter, but as expected Proxima / OM are clamping down on subletting because clearly it’s a revenue stream that has been forgotten about.
To Buy or Not To Buy
A question that even Shakespeare would probably be asking if he were to consider moving into a retirement property!
It’s a popular question that we get asked regularly, but one that we feel is necessary to continue to highlight as it demonstrates the number of prospective retirement property owners, that are worrying about what they should do.
From what I’ve read on the internet I’m sure you’ve been asked this question a thousand times.
After much deliberation my wife and I concluded sheltered housing was probably the right route to go, we’re not old old (both 62) but my recent health has not been brilliant and we have no family to speak of, so if I suddenly fall off my perch it leaves my wife isolated in our bungalow. Therefore being with others in similar circumstances offered an element of security.
But, with all the trials and tribulations being experienced with the ‘management companies’ should we even consider buying into this mess.
It would appear to be another fine example of corporate greed in what is an easily exploited area, or is there an honest company operating out there and if so which developments and where are they.
If you can offer any advice it would be appreciated as we now feel we are back beyond square one.
We replied to this contributor with the following:
Your message echoed the sentiments of many that contact TTAS in a similar position.
The first piece of advice we can give is to undertake as much research as possible in regards to any property that you may like and if anything, when Peverel Retirement or Fairhold Retirement are mentioned – run a mile!
Sadly, this will leave you with a restricted number of options – however, do not despair as there are many retirement properties out there that aren’t managed by Peverel related companies. It’s just a matter of find them which is the hard part, because these properties are the ones that sale quickly due to not having Peverel assocated with them.
When you do find a property, ask many questions in regards to the management charges, who the agent is and what increases have taken place in the past.
Unfortunately, you won’t be able to ask if there are transfer fees involved at this point – as many will say no. Therefore, be prepared to proceed with the purchase to the legal stages whereby we stress you put a lot of pressure on your solicitor to confirm in writing that no transfer fees are applicable.
For your information, Peverel associated retirement properties incur a charge of between 1-3% having to be paid to them on the sale of a property, but you’ll have problems selling the property due to Peverel and therefore could be faced with large fees and further stress in the future.
As an example, my wife’s grandmother died in 2010 and as the property sell was handled by their solicitor, they happily paid £2000 to Peverel to simply ‘sale’ the property, when Peverel didn’t even do anything!
We later found out that Peverel in their leases, tie themselves into them whereby they have to be the exclusive Estate Agent to market the property for 6 months (so that they can be paid commission for selling the property, plus receiving the transfer fees!) a massive con I’m sure you’ll see.
That’s all we can probably say on the matter at the moment, but we’ll be publishing your story today for others to pass comment and advice, that you may find of interest?
Many contributors have mentioned that you feel Grant Shapps is ignoring our plight, but we have it on good authority that Mr Cameron is listening and is apparently trying to address the situation.
We need to hear from more prospective leaseholders and retirement leaseholders who are scared about buying a property that has management charges associated to them, so that we can promote this.
A large proportion of prospective leaseholders will be first time buyers and these type of people are needed to kick start the housing market in the UK. Except, they need to be confident that they won’t be exploited and end up with regrets about purchasing properties that they have worked hard to afford.
If you have a story to tell us, don’t be afraid to get in touch by e-mailing admin@thetruthaboutsolitaire.co.uk with your story.
“TO BUY OR NOT TO BUY”
TTAS have done a marvelous job in hounding Solitaire and its sucessors like OM but for Heaven’s sake give Peverel Retirement a rest! I bought new six years ago. Exit fees in the Lease are ‘not exceeding 1%’ to Landlord (a Peverel co.) and 1% to Contingency Fund. My Solicitor described the first as unreasonable and the second as sensible. There is no restriction on sale in the Lease, flats that have been sold have gone via local agents from day one. Peverel Homesearch have not sold one.
Service Charge has been based on an agreed detailed budget each year and increases have not been unreasonable. For the forthcoming year about 4%. Where work has been carried out, ground maintenance etc,
I have no complaint.
Finally, I am NOT a mole!!
Martyn
If your solicitor thought paying a 1% transfer fee to Peverel for a ‘contingency’ fund was “sensible” he is obviously as naive as you and the rest of us were. Transfer fees are not included in standard leases, only in the retirement sector, so how can that possibly be fair and reasonable? When I asked Peverel to explain the reason for that anomaly they didn’t have an answer. These rogues have been quietly ripping off thousands of older people for decades.
TTAS, Peverel Action and Carlex have all done an excellent job in exposing this scam together with the building insurance, electricity and other rip offs that are all carefully hidden in the budget accounts that many residents like yourself never bother to question.
If you are happy to be managed by an unscrupulous company that is up to you but there are thousands of others like myself who are not and will fight Peverel to the death over their corrupt unethical behaviour – including Peverel Retirement…
Martyn
you have been TOLD by peverel that the increase is only 4%.
can you please publish the TOTAL charge that you have paid for each of the six years you have been in residence ?
it was NOT until we started plotting graphs that we found that were being SERIOUSLY ripped off. and then we started doing simple calculations to find that what we were being charged was FAR TOO HIGH …
please remember that peverel’s motto is that YOUR money is better off in THEIR pockets …
happy days
I would write the following letter,
Dear E&M,
Thank you for your letter from your sub-let department.
In order to settle this matter i need the following information.
I need the name of the person who has written this demand, so I can verify it is a genuine demand and not a potential fraud on you.
I also need to have sight of the authority to act on behalf of the freeholder.
Further, you must supply in the form of the relevant part of the lease that allows for permisions to be granted, or a tenancy to be registered. Having supplied this information, you need to show via the lease on what basis you can recover fees, and if this is satisfied you need to show that you are recovering your costs and are not making a profit on such charges.
It would add to my confidence in your claim, if you were finally able to file your accounts with Companies House.
With regret until you comply withy my requests, i will be unable to acceed to your demands.
With respect my I remind you, that it is your duty to satisfy that this demand for money lawfully exists.
It’s a lot of nonsense. Your correspondent should go to the LVT. The phrase is ‘consent to let’. Unless you sign another agreement with your tenant, the property is let as a one-off event at the start of the tenancy.
Martyn,
Trying to get OM, E&M, Peverel and Peverel Retirement to be honest is not “hounding them” in my book.
I am delighted that you are satisfied with them. I suppose you had the fortune not to live in Gibson Court,
you might then not have been so apppreciative of Peverel Retirement.
I wonder, if your satisfaction with Peverel Retirement extends to their accounts?
> I am not a mole
Mrs. Christine Keeler’s famous words come to mind.
Our increase in service charges for 2012 was 33% this year. The demand crossed the RTM claim in the mail. The PM wrote to say how disappointed he was.
Mrs. Christine Keeler’s famous words came to mind.
I’m not mole either.
Martyn,
Just one further thought, which you and others may wish to pass a comment on.
How many people do you think, that are happy with a company, seek out a site that fights for justice against that company? How would you even know of the existence of such a site?
Very odd!
I did mean Miss Keeler, of course.
Extortionate demands are not restricted to developments run by the usual suspects. Freehold Managers plc takes it upon itself as landlord to demand a £108 sub-letting fee [sorry, Notice of Registration] “as per the terms of the lease”. My lease does not include such a requirement. I am considering whether this might be considered in law to be demanding money under false pretenses.
Dai Smile,
If you read the comments on this link you will see that someone points out a connection between Freehold Managers plc and Solitaire.
http://forums.moneysavingexpert.com/showthread.php?t=158507
There are also inteesting comments about ‘Chief Rent’ and Lords of the Manor!
Well,well,well…….I’ve just taken a look at the Companies House website and COMPANY NUMBER 2783487.
You know that ‘comfortable’ feeling one gets when you see familiar names and adresses? Do me a favour everyone and take a look yourself.
Sorry Dai, you’ve got it wrong this time, these are the ‘usual suspects’ writ large!!!
I have known for some time that FM is part of the network. It was sold to Solitaire in the mid-Nineties before the multiple name changes and Peverel link was established yet persists in use of the original name. The obvious clue to the connection is its address: Marshalsea Road, London SE1 – where several other names discussed here are lodged. Despite
I’ll probably ignore the latest demand, as requests in the past for the so-called “sublet department” to point out the clause in my lease requiring permission have never been answered. I believe someone in the organisation once admitted that they sent these demands to anyone paying ground rent from an address different to the property. In other words, it is a trawling exercise. Unfortunately, many BTL landlords pay up without checking their lease
Dai Smile,
Something about the name Freehold Managers rings a bell!
I think at an LVT, Freehold Managers were represented by Mr Richard Sandler, the E&M “in house” solicitor .
Dai Smile,
Quite right not to pay, but never ignore!
Even if they never reply, keep copies of every letter or email you send them, so that you can show any LVT the steps you have taken to establish the “apparent” debt.
Remember, whilst in dispute it is for the claimant to establish the debt. No recovery action can take place until a debt is admitted or proved.
To others who are reading this post, when you get a demand such as for registration or sub-let fees, please read your lease. Once you do it may suprise you in that it is not complicated,and has very little technical stuff in it. So do not be frightened into thinking that for the sake of a few hundred pounds you will end up in court challenging the interpretation of a word to prove your case.
That will not happen. The lease is written in a way that everyone can understand.lt will say the Freeholder can charge for granting a sub-let . If it doesn’t say it, they cannot do it.
I note the rise of “registration charges” instead of “sub-let” charges.
In my opinion, that is merely a ruse to evade the remit of an LVT.
That said, it follows, that to “register” is much less than a “grant to sub-let”.
Even if a proper charge, registration could not cost anymore than £25.
It is only a question of filing a name at an address, which even a poorly paid secretary can do, whilst pondering “how long before my company is wound up and I have no job?”
Many comments have been made about the Feudal origins of the leasehold system and I now find that even ‘freeholders’ can be bound to the payment of a ‘Chief Rent’ due to the ‘Lord of the Manor’ as quoted in the link in my response to comment number 7 above.
It was with much interest therefore that I read the following:
Quote
To find the origin of the auditor’s powers, and indeed of many of our accepted ideas of financial control , it is necessary to cast at least as far back as Norman England in the 12th century. Even at that distant time we find a well-developed organisation. Local government under the Normans and Angevins was in the hands of the sheriffs, appointed by the King and operating with the local customary courts which had existed before the Conquest. Membership of these courts seems usually to have been an obligation arising from tenure of land in the area.
The sherriff collected royal income arising within the shire – rents of manors, levies such as Danegeld, scutage, and aids, and debts due to the King. In practice, the periodic manorial rents were usually commuted into a lump sum, the ‘farm’, from which the sheriff had to account whatever the actual ampount of his collections. – Unquote.
From E J Burdon – The Antecedents of the District Auditor – Chapter in ‘Watchdogs’ Tales – The District Audit Service – the first 138 years’
The ‘District Audit Service’ was swallowed up by the ‘Audit Commission’ in 1982, a quango that is now itself about to disappear.
Such a crying shame that we have been left with the feudal land tenure system that has been so ruthlessly exploited, but have completely lost the ‘obligations’ on landowners and lost for all time, the tight systems of financial control that went hand-in-hand with obligation and land ownership.
What do we have in their place? Operating companies and Landlord Agents that contnue to send out service charge and ‘ fee’ demands (some of which are of dubious legal status) but fail to complete the Annual Accounts for the estates they manage within the legally prescribed 6-month period AND fail to submit their own Annual Accounts to Companies House.
But………is this of any use>
http://www.lease-advice.org/publications/documents/document.asp?item=71
For anyone receiving a demand from E&M for sub-let fees, before you do anything else, start with the following letter or email.
For the attention of Mr Richard Sandler,
Dear Sir,
I am very concerned that either a member or connected member of E&M staff, may be attempting a fraud on your company.
A demand sent to me using E&M headed paper has no name attached to it.
Therefore, I am concerned that it may not be a genuine demand, and you may be unaware of it being sent out. So that I can proceed further, and to reassure me that all is in order, can you kindly resend the demand in your name and with your signature.
To further expedite matters, as a solicitor, it would be of great help if you could state the section of the lease you are basing any claim on.
Hi,
I won a LVT case against E&M in July last year (Global £330 -> £150, Standard £150 -> £75). The tack they’re taking now is that they won’t offer me a Global License, only a Standard License. I would love to hear from anyone who has a recent demand (last couple of months) for a sub-let fee from E&M. I would like to know if they’re still offering the Global License.
If so, a scanned copy of the demand for the sub-let fee would be perfect.
Many thanks,
John
John,
I think you may be best advised to contact any fellow lessees at your block who let their flats. If they are being offered a global license, you could complain to the LVT. (Ask admin here if anyone else has sent details for the ‘find a friend’ section.)
I dare say E&M would claim they had changed their policy regarding subletting solely at your block if you only produced papers from another block.
James,
Thanks for the advice. How do I ask admin?
Regards,
John
Click on ‘contact us’ above, and send an email
J.
I wish I has seen this web site before.
I have recently paid for a Global Licence to sub-let my flat in Manadon Park. I own two other flats in different blocks run by a local management company and I don’t have to pay a penny to rent either of them. I think OM are taking the P*** out of us, as like most of you I find their charges far to high. I would like to take the management of the block away from them,but it isn’t easy.
Any advise would be helpfull.
Ian
jbh,
I’ve recently had a demand for these charges:
Retrospective standard consent +notice of underletting: £190 total
Global licence including notice of underletting: £350
So, yes – they’re still offering the global licence.
jbh,
Look at a previous post of mine, and use my suggested letter.
E&M are cunning, devious, desperate for money crooks.(this is an opinion, based fairly on my experiences with them)
So, I suggest, you act cunning as well. Remember, you are not dealing with a normal company, so the normal rules do not apply.
By writing my suggested letter, you delay. You can keep this issue going and going, certainly long enough for E&M to go out of business.
In a battle, you must let the opponent react to you, not you react to the opponent if you want to win.
You may have sound legal grounds against E&M, but acting in an illegal manner has never stopped E&M.
So I suggest you think outside the “Box”. Never respond the way E&M expect you to do.
Jhb,
Many apologies,
I missed your original post, so clearly my post to you was not appropriate to your situation.
I hope you can forgive me, given the number of posts I write I sometimes get the wrong end of the stick.
Michael,
No apology necessary. It looks like you’re doing some great work here!
I agree with you about E&M, they’re exploiting a relationship which is not intended to be profit-making.
Out of interest (you probably know this already) – I had a look on Companies House tonight and noticed that Ramvel Limited (the freeholder from my case) and E&M seem to have had the same directors at one time or another.
Regards,
John
Jbh,
For the sake of this post I will assume that E&M are entitled to charge a sub-let fee, though I have my doubts.
This charge as ruled by LVT’s are to cover their costs not for E&M to profit.
This is why the charges were reduced. Since it is for E&M to mitigate all costs, the idea of a global license makes sense. As E&M had previously granted you a global license, a precedent has been established, so they now cannot refuse you. Indeed the only issue is not the granting of a global license, but the amount you should pay,
but that has been established by your and others LVT decisions.
Therefore, you have acted in a correct manner, by informing the freeholder you are sub-letting.
It is up to E&M as to whether they charge you for the sub-let. If they do, you will pay the LVT decided charges, not a penny more.
Whilst it is reasonable for a more expensive short term charge in the case of a short term sub-let, for your situation it is wholly inappropriate .
E&M would have to argue their case in a LVT.
Taken to its extreme, as the Peverel Empire crashes, maybe E&M will try to impose daily sub-let charges?
Michael,
I get the sense that they are desperate and based on my experience, they will try anything to get their way and make some profit. If I hadn’t studied law as a degree, I wouldn’t have been able to deal with their procedural tactics.
Do you know of any politician-interest in their actions with a view to more formal regulation?
Regards,
John
Grant Shapps, minister for housing, will refer you to your MP if you write to him directly, so write in the first instance to your MP and ask him or her to take up the issue with Mr Shapps or the Prime Minister or … whomever, if you wish. Shapps is on record as believing the law does not need to be reformed and seems quite recalcitrant. Cameron is allegedly aware and monitoring. They want to keep receiving money from wealthy landlords (the Tchenguiz Family Trust is a donor) but are probably concerned to avoid a scandal that becomes and stays front page news, Andy Coulson style. In reality, they are sitting on a ticking bomb and if the ticking gets too loud there will be a change of heart. It’s far from inconceivable that we might yet see a parliamentary inquiry that makes it very clear that the need for reform was known to be overwhelming and that it was buried for the most cynical, discreditable political reasons.
Let me quote from the E&M accounts 2010.
“OTHER THAN THE DIRECTORS WHO RECEIVED NO REMUNERATION, NO PERSONS WERE EMPLOYED DURING THE YEAR”
Now let us assume that if your lease allows for a sub-let charge, that sub-let charge must be reasonable.
It would be to cover reasonable costs incurred in the administration of the granting or registration of a sub-let.
Clearly, many disputes involving E&M are over the amount that E&M have attempted to charge.
As we are aware that often those charges, if ruled applicable have been greatly reduced.
This has been on the basis that too much time has been charged at too high a rate.
Suppose, as is very likely, the claim has come from E&M for sub-let fees.
Their apparent reasonable position to support their claim is the costs of their staff’s time in the granting or registering of the sub-let.
But, look at the accounts. It is in the E&M accounts, which have been signed by the Directors of E&M as being true, and passed by E&M’s auditor.
“OTHER THAN THE DIRECTORS WHO RECEIVED NO REMUNERATION NO PERSONS WERE EMPLOYED DURING THE YEAR”
That means only one of two possibilities. Either, by claiming costs for staff from a resident or at a LVT they are attempting to deceive the resident or the LVT, or, their accounts are false.
If you are about to go to LVT, or are involved with the LVT, it is vital you submit that part of the E&M accounts to the tribunal. Put simply, you cannot claim back the cost of wages, if you are not paying wages.
It maybe, that the real company is Fairhold Services Ltd, but if this is the case, it is E&M that have issued the demand not Farihold Services Ltd. So it would be for E&M to prove the costs they have incurred .
It would seem to me, that their own accounts undermine their sub-let fees demands.
Hi michael. I would like to thank all the people who contribute to this site for the valuable information regarding Peverel,Proxima GR, E&M and others for exposing them for their outrageous fees for consent to sublet.You say that the accounts mention no staff payroll at E&M but is that just for the end of year accounts 2010 or 2011 as well?.I would like to mention this in my LVT application but would like to make sure my facts are correct.Can anyone tell me what it means when the LVT say they have no jurisdiction of a sublet registration charge because it’s not a variable admin charge. Consent to Let £135 , Regisration £85. Have E&M found a loophole? If there is no mention in the lease of a registration can a Court decide, fraudulent claim maybe? Also, what about them trying to get you to pay a fee every 6 months when there is no mention in the lease, could that be fraudulent too?
Steve,
The latest available accounts cover the period to December2010.
That said, the Directors report was dated Jan 31 2012.
So had there been a material change, ie Faihold losing 126 members of staff and E&M gaining 126 members of staff, that would have had to be disclosed.
In a sense E&M did find a loophole by trying the Registration tactic in regard to LVT’s.
However, even if a LVT decides it has no power to judge on a registration charge, that does not prove the charge is justified. E&M will still have to prove the debt, or you must admit the debt before it is legally payable.
I have a leasehold for which the Manager (specified in the lease) is OM Property Management and they used to manage, and collect the ground rent for the freeholder (Proxima). A year or so back, Proxima asked EM to collect the rent, so now we have 2 lots of payments to make, then last year EM began their sub-let extortion letters, OM never previously having raised the issue of fees for sub-letting. The lease does allow the freeholder to ask an agent to collect the rent, but not anything else.
As EM is not the Manager, and the lease precludes 3rd parties from enforcing terms of the lease, I don’t see that I am obliged to deal with EM. I don’t think the lessee has to deal with more than one Manager, nor to pay the costs of dual management.
This is the line I am taking at the moment, before I have to start arguing over the level of fees.
Does anyone else have this argument?
pb,
Michael Epstein’s latest comment has drawn my attention to your post of 13 February which I had not previously picked up, as I believe I was away from my ‘award-winning’- OM-managed estate at the time.
I think you raise a very interesting point. For some time now I have been thinking about ‘Tri-partite’ leases and in what circumstances can/does a ‘tri-’ becomes a ‘quad-’, become a ‘pent-’, become a ‘hex’ etc.?
Others’ contributions to this conumdrum would be most welcome!
My thanks to Katie Norman, who is featured on the Peverel website, explaining why it is so good to work for them.
she writes:
“As a legal services co-ordinator, it is my job to act on behalf of the landlord during the transfer of a property from one person to another.
There is quite a lot of paperwork to be done and fees need to be collected before a transfer can take place. We also have to give consent to the transfer.
Although we work as a team, we are responsible for an allocated proportion of the work,mostly incoming letters from tenants and solicitors. Each piece of correspondence has to be studied and a decision made as to what needs to be done. We get help and advice on this if needed, because though we are thoroughly trained, we are not legal practitioners.”
So thank you, Katie and thank you Peverel.
Anyone challenging fees for sub-letting or transfer, now has evidence from Peverel’s own website, that they are not using legally trained staff. Naturally, this means that they cannot claim the costs of a solicitor for sub-letting or transfer fees.
Thanks Michael,
I concur, but good luck getting the LVT or Lands Chamber interested in that sort of argument. I tried with both, and both times was ignored.