… Anger at upmarket site in Jeremy Corbyn constituency
… Should residents involve the Leasehold Advisory Service, given that its chairman Roger Southam also owns the embedded management company?
… Taylor Wimpey seems to be saying that an embedded management company can be turned into a residents’ management company – just so long as leaseholders make enough fuss
Buyers at an upmarket Taylor Wimpey development in north London, Mulberry Mews, may have thought they were purchasing flats where they would control the site through a residents’ management company.
Instead, they have been left with an embedded management company in the lease, called Aberdeen Lane Limited (08367504), over which they have no control at all.
It is wholly owned by property management company Chainbow whose proprietor is Roger Southam, the chairman of the taxpayer-funded Leasehold Advisory Service.
Furthermore, records at Companies House show that Mr Southam is the director of nine new Taylor Wimpey embedded and / or residents management companies, and he resigned from a tenth in January last year. (Full list below)
On the face of it, residents at Mulberry Mews in Highbury, a mixed site of 72-odd flats, freehold houses and a social housing block have no control whatsoever of Aberdeen Lane Limited, which has responsibility for the management of the site.
Last year both Taylor Wimpey and Mr Southam made this clear to the residents in emphatic terms, as quoted below.
But when LKP raised the issue last week, both Taylor Wimpey and Mr Southam seemed to be suggesting that Aberdeen Lane Limited was indeed a residents management company that would somehow be handed over to their control.
Mr Southam initially urged LKP’s MP patrons Sir Peter Bottomley and Jim Fitzpatrick to suppress publication of the issue on the LKP website, describing our inquiries as “sensationalist”.
He referenced “wild unfounded allegation and insinuation”, and said: “Not for the first time LKP have the wrong end of the stick.”
Subsequently, he did provide statements for publication, however.
It is not clear at this stage how transferring the ownership of Aberdeen Lane Limited could actually be achieved.
There is no participating membership for the residents stated in either the lease, or the company articles of association.
A further complication is that last summer Taylor Wimpey sold the freehold of the site to Guernsey-owned Adriatic Land 4 (GR1) Limited, whose interests such as ground rent are managed by Home Ground Management Limited, owned by the prime minister’s brother-in-law Will Astor. If the lease is to be varied the freeholder would have to agree.
Coincidentally, Mulberry Mews is in the constituency of Labour leader Jeremy Corbyn.
The current attitude of Taylor Wimpey and Mr Southam contrasts with their responses to leaseholders last summer, who began asking questions about Aberdeen Lane Limited.
In August the residents were told by Ingrid Skinner, MD Taylor Wimpey London:
“For the avoidance of doubt and in accordance with your leases this is set up as an embedded management company. This means that the obligations for the management company remain with Chainbow as opposed to having resident directors.”
Mr Southam also confirmed the status of the company in an email in October:
“1. There is no legal right for formal representation within Aberdeen Lane Limited … 2. Chainbow owns Aberdeen Lane Limited and has control of the Company.”
These statements appear to be at odds with the attitude today of both Taylor Wimpey and Mr Southam who, on reflection, have decided that Aberdeen Lane Limited may be a residents’ management company after all.
The arrangements at Mulberry Mews contrast with those at Taylor Wimpey’s Argyll Place in Kensington. Here Mr Southam has been the sole director since October 11 2013 of Argyll Place (Kensington) Residents Management Company Limited (08228760).
This appears to be a standard RMC formed in a company limited by guarantee – ie no shareholders – with participating members. The articles of association make clear that only “unit holders” – that is, the property owning residents – can be members of the company and directors.
As the site is still not completely sold, Mr Southam’s continued directorship is explicable. It means that once all the properties are sold the resident directors can take over control of the company.
This procedure is absent in the leases and the company documentation for Aberdeen Lane Limited. This is a standard private limited company, which can be a vehicle for an RMC provided the leaseholders are also shareholders.
Mr Southam, through his company Chainbow, has long been involved in leasehold property management, although he sold most of his block management contracts in 2012.
Although he has publicly downplayed it, he acknowledges retaining some leasehold block management activity in his declaration of interests at LEASE.
Although Taylor Wimpey is no longer the freeholder of Mulberry Mews, it appears to be intent on sorting out the issue and refers to Aberdeen Lane Limited as a residents management company in correspondence.
In a statement to LKP, Taylor Wimpey said: “Further to your query yesterday regarding how the residents could take over the RMC. We are in direct dialogue with the leaseholders on this matter.”
It is understood that the housebuilder’s legal team will be in touch with residents this week.
How Taylor Wimpey can reconstitute an RMC in a site where there is no reference to participating members in the lease or company articles, and where it no longer owns the freehold, is an open question.
As things stand, Aberdeen Lane Limited belongs to Mr Southam to do as he wishes including, it must be assumed, gifting it to the residents.
Mr Southam gave the following apparently contradictory explanation to LKP:
“The leases do not have an obligation for leaseholders with regard to being members or shareholders of the embedded management company.
“The embedded management company is set up as an RMC so that it can be handed over to leaseholders.”
Mr Southam gave the example of the Mill Apartments, in West Hampstead, where he resigned in January 2015 as a director of The Mill Hampstead Management Company Limited (08543775).
It now has three resident directors, who are managing the site. Like Aberdeen Lane Limited, this is a private limited company with shareholders comprising 18 resident leaseholders. However, this contrasts with the company at Mulberry Mews, where there is just one shareholder: Chainbow.
Chainbow’s involvement in the Mill ended acrimoniously, the directors say, and it is now under new management appointed by the residents.
The importance of residents having control of a residents management company is only too clear at two sites in Ilford in east London, Images and Invito.
Here Desmond Moreira and Daren Touhey, of LKP accredited managing agent Rynew, are sorting out a host of build warranty issues.
“If the residents had not had control of the residents’ management company this whole process would have been far more difficult,” said Mr Moreira.
“Every modern block should be built with an RMC, and anyone buying a new flat off a developer should absolutely insist that there is one in the lease.”
In a statement to LKP, Taylor Wimpey said:
“We are supportive of residents who want to play an active role in the management of their completed developments.
“However, we have often found that groups of residents prefer not to be directly responsible for the administrative burden and responsibilities of looking after the management of their developments.
“Therefore, when suitable we, like many developers, use an appropriate embedded management structure, run by an external agent. We have found the embedded management structure offers the best of both worlds; namely, a development can be managed by a professional and competent manager/managing agent or by the residents without the involvement of a managing agent.
“Accordingly, we have already successfully handed over full management responsibilities to residents at a number of developments where this has been asked for.
“Taylor Wimpey continues to be willing to engage with residents and to meet their needs where possible, if they feel these are not currently being met by existing arrangements.”
The companies at issue are listed below. Some concern sites that are not yet built or completed. At others, such as Argyll Place, the residents management company has been fully established. Here the means exist for Mr Southam to step down as director once the site is fully sold.
1/ Palace View
Lambeth Bridge
PALACE VIEW APARTMENTS MANAGEMENT COMPANY LIMITED (09917388)
Company limited by guarantee
Directors: Roger Southam and Gail Ann Lawrence (Chainbow Client Services Director), both appointed Dec 15 2015
2/ Onyx Apartments,
Kings Cross
ONYX APARTMENTS MANAGEMENT COMPANY LIMITED (09735025)
Company limited by guarantee
Directors: RS and GAL. Appointed August 16 2015
3/ Battersea Exchange
BATTERSEA EXCHANGE MANAGEMENT COMPANY LIMITED (09628768)
Company limited by guarantee
Directors: RS and GAL. Appointed June 8 2015
4/ Westminster Quarter
WESTMINSTER QUARTER APARTMENTS MANAGEMENT COMPANY LTD (09412996)
Company limited by guarantee
Directors: RS and Gail Ann Lawrence. Appointed January 29 2015.
5/ Argyll Place
North Kensington
ARGYLL PLACE (KENSINGTON) RESIDENTS MANAGEMENT COMPANY LIMITED (08228760)
Company limited by guarantee
RS sole director. Appointed October 11 2013. 3 directors resigned October 11 2013.
6/ Ladbroke Grove
LADBROKE GROVE APARTMENT MANAGEMENT COMPANY LIMITED
Private Limited Company
RS sole director. Appointed August 30 2013.
7/ St Dunstan’s Court
Fetter Lane, EC4
ST DUNSTANS APARTMENT MANAGEMENT COMPANY LIMITED (08730011)
Private Limited Company
RS sole director. Appointed October 14 2013
8/ Mulberry Mews
1-55 Aberdeen Ln, London N5 2EA
ABERDEEN LANE LIMITED (08367504)
Private limited company
RS sole director. Appointed January 21 2013.
9/ Great Peter Street
London SW1
GREAT PETER PROPERTIES LIMITED (04417112)
Private Limited Company
Five directors including RS (since April 15 2002)
10/ The Mill Apartments
West Hampstead
THE MILL HAMPSTEAD MANAGEMENT COMPANY LIMITED (08543775)
Private Limited Company
RS resigned Jan 30 2015. 3 directors (presumably leaseholders at the site) appointed January – April 2015
Related posts:
LKP meets Roger Southam and Taylor Wimpey over embedded management companies
Southam sells Chainbow to Savills, so who owns the embedded management companies now?
Should the chairman of the Leasehold Advisory Service be the owner of embedded management companies?
LEASE chair Roger Southam in Private Eye (again)
DCLG rejects second complaint about Roger Southam as LEASE chair. He was appointed on merit, it claims
BBC features 50 Oxford City Council leaseholders facing £50,000 major works bill
Dear old Roger, well am I surprised? I was quite tempted to put pen to paper with the more recent announcement of his links to the publicly funded advisory service LEASE – and thought better of it. Because, well, actually, I am quite busy and how long have I got to retrace Chainbow’s faltering steps from early beginnings in Bristol through to being HQ’d in London – various different addresses and various iterations of the same business, a less than colourful balance sheet in stark contrast to the man with the trademark bow tie. We’ve exchanged emails in the past on the thorny question of accounting for service charge – this being my pet subject.
We agreed to disagree over just how transparent service charge accounts should be. Like many an agent, he prefers secrecy – the idea that service charge accounts should be published in full at Companies’ House fills him with dread disguised in legalize as to whether SC accounts are trading accounts in the normal sense. No they aren’t – but so what? What’s wrong with leaseholders publishing the gory details of how much the likes of Chainbow charge us?
Now, Roger likes to distance himself from the whole tacky business of managing agency work. Chainbow has submerged its flat management activity with Trinity Estates – another interesting player.
As to Argyll Place (Kensington) Residents Management Company Limited (08228760). I guess this company – like most in the field – will be limited by guarantee and its Mem & Arts will say that the minimum number of directors is one – use Roger in this case.
All I can say to fellow leaseholders is Courage met amis,and don’t let the bugger(s) get you down. As you buy a flat you become a de facto member of Argyll Place. Take it from there. Become a director and oust any directors you don’t like the look of. Keep calm.
The other very important point is this. What does it say in the Mem & Arts? It should say that all flat owners will be members of Argyll Place (or words to that effect) and will either state, or imply, that nobody can be a member or director if they aren’t a flat owner.
Does Roger own a flat at Mulberry Mews? [Cheers, Roger!]
It’s frightening for leaseholders, particularly those in Retirement complexes.
If they cannot rely on LEASE and its Chairman to support them what hope have they got.
Totally agree with Sue and MH.
What I just cannot never understand is why do leaseholders not get any help from the publicly funded advisory service LEASE.
{t is a total waste of tax payers money and a complete sham.
with his involvement with Managing Agents etc Roger S has conflicting connections and should not be involved with LEASE.
Trinity Estates Hmmmmm!
Not sure, Trevor, that I fully understand the difference between a flat management company where the leaseholders will be the directors (though, for obvious reasons, not the first directors) – and an embedded management company. The latter sounds as if it could be a managing agent but it would be contrary to the spirit of the law – and difficult in practice as to continuity – to ’embed’ a named managing agent into the lease. What happens when Roger dies (heavens forbid)?
D’you know what? I’m thinking it’s the usual balls-up that we increasingly associate with managing agents who sail close to the wind if they don’t actually flout the law. Most are, let’s be honest, hooray henrys, chancers, spivs …. management by soundbites.
I’m sure Roger Southam doesn’t fit into the above categories – and we shouldn’t be misled by his bow ties. No doubt there’s a perfectly sane explanation as to what all these embedded companies are about and I’m thinking Roger. himself, will welcome the opportunity to put LKP readers right over what’s going on here. Go on, Roger, do tell, please.
Nice one from a Michael Epstein, below, to ask LEASE for the ‘legals’ on Roger’s leasehold activities.
How do we oust Roger Southam? Good question?
What does the “impartial” Leasehold Advisory Service suggest?
As Roger S is chairman of LEASE will he be able to advise Mulberry Court how to oust himself!!
You just can’t make it up can you
I thought that LEASE had adopted the Chinese Whispers method of making judgements. Roger will be arguing his case to stay with Mulberry Court whilst his colleague sat at the next desk behind a partition will be arguing for him to be ousted
Perhaps Roger Southam might want to step aside to let Martin Paine or Vincent Tchenguiz run Lease?
How can this man be seen as a trustworthy chair of LEASE offering impartial advice to leaseholders. Mr Southam has claimed he has even worked on the LEASE help desk finding most issues about leaseholders having disputes among themselves or a lack of understanding.
It now turns out in his day job he acts as a managing agent working for landlords. He also seems to have acted against the interests of his leaseholders.
Since Mr Southam should know the law better than than most you have to ask the question why this has happened? Did he not notice the lease did not allow the leaseholders to take control?
Its OK though. Rodger Southam is allegedly changing the name of “Lease” to “Exclusively for Dubious Managing with a little bit of the best for themselves”
CISCO
From Shula – Brighton Leaseholders Association –
I’ve heard the Chair has also manned the Lease advice line. This will be the first time an advisor would have to declare a conflict of interest if one of his leaseholders calls for advice on how to get rid of him!
Like any other managing agent and landlord Mr Southam would also be entitled to call LEASE for their free and impartial advice on how to use the law to avoid being removed by the leaseholders.
Only in this case he does not even need to do that as his company is embedded in the lease.
We have been told before that in a case like this LEASE adopt the Chinese Whispers solution.
Perhaps you mean Chinese Wall … although Chinese Whispers may be the more accurate result.
Should LKP supporters put forward a shortlist of candidates to run LEASE? Obviously, based on our personal experience and recommendations. For me, right up there are Duncan Llewellyn Rendall (of Gray’s Inn); or his co-director at managing agents Rendall & Rittner – Matt Rittner.
Interesting Google reviews on the RR website, viz: ‘One of the worst property management companies’; and ‘Simply disgusting service that does not justify the fees charged.’
Come on, surely not? Does anyone really believe that?
Sue,
That probably explains why if they can’t appoint Freemont Property Managers, Estates & Management have Rendall &Rittner as their go to property managers.
Any leasehoder contacting LEASE hoping for impartial advice needs to be very careful with their recommended list for solicitors. Research them and then research them some more…it’s practically a full time job to untangle the web of directors, management companies, freeholders and their solicitors all working together to defraud the poor flat owner.
I agree with Leaseholder. I would beg anyone not to use any firm on the LEASE recommended list. It goes without saying that if they are advertising on the LEASE website, they need the business and they aren’t top of their tree.
I speak from some experience – one law firm who represented me back in the 1980s in a dispute with a flat management company was actually well intended – I had the senior partner acting for me – great on conveyancing but totally ineffectual over leasehold matters. This firm now claims on the LEASE website to be an expert in such things and I swear it was the several years of acting for me that gave it the very idea that here was a good revenue stream to be exploited in full.
Far better to search the two privately owned, competing, directories of law firms – Chambers or Legal 500 – and I have to say I much prefer the latter for being spot on with more up-to-date listings and profiles. Here you will find not just what these firms say they are good at, but what their clients say they are good at. Choose, if you can, a Tie1 or Tier 2 firm within the area of Property Litigation. Then you know you are in with a chance.
To be fair to LEASE, cross-check the firms you find on Chambers or Legal 500 with the names on the LEASE website. How good is the match 😉 ?
Outer London firms can give better value for money. My ‘go-to’ firm is Iliffes Booth Bennett (IBB).
The Legal 500 says of this Tier 1 property litigation firm that IBB ‘can compete with any Magic Circle firm in this area’. Andrew Olins (‘a fearsome litigator’) and Jon Mowbray (‘excellent at devising commercial solutions’) jointly lead a hugely experienced team, which also includes senior solicitor Ryan Diamond.
In my time, I consulted with senior solicitor Ralph Bankes – since emigrated with his family to Australia. The legal advice he gave – in particular, on the mechanism of the lease in respect of accounting for service charge – was so thorough that I have recycled it time and again without having had to revert to IBB, saving myself £000,000 in fees.
I would love to read through and understand the advice on the mechanism of service charges. Every time I ask a question the ‘managing agent’ responds with, oh it’s ‘based on last years estimate’ – ‘and costs are expected to rise annually ‘. The suggestion of making it an obligation to publish service charge, independently audited accounts would be one solution.
The mechanism of the lease, as I understand it, is akin to cogs in a wheel – without the cogs the wheel won’t turn.
Ditto the lease. The lease sets out in some detail how the landlord/flat management company (or managing agent if employed) will account for service charge: these are the cogs. When ALL the financial cogs are in place, the wheel of revenue collection starts to turn and the leaseholder/tenant is obliged to hand over the cash. But not until then.
OK. So many management companies collect service charge in advance. But they do so on trust – only on the understanding that they will comply with both the mechanism of the lease – and with the law, notably Landlord & Tenant Act 1985 s19(2) :
‘Where a service charge is payable before the relevant costs are incurred, no greater amount than is reasonable is so payable, and after the relevant costs have been incurred ANY NECESSARY ADJUSTMENT shall be made by REPAYMENT, REDUCTION OR SUBSEQUENT CHARGES OR OTHERWISE’.
The cogs in the lease are typically: audited service charge statements which are appended to the dormant accounts; alternatively, audited service charge accounts submitted in full to Companies’ House as being the trading accounts of the flat management company.
Current guidance from the accountants’ bodies ACCA/ICAEW is that any whiff of the word ‘audit’ in the lease means a full proper audit in accordance with International Standards on Audit ISA 8000. It’s quite normal for managements and their gee-whizzo managing agents to argue the toss over the ‘meaning’ of the word ‘audit’ in the lease. In this, they have the backing of ARMA and, I dare say, lawyers at LEASE whilst other regulatory bodies like RICS tend to keep quiet on the subject.
Leaseholders should bear in mind that, when it comes to regulatory compliance, the relevant bodies provide the courts with the appropriate standards and guidelines. Here you can forget ARMA, LEASE and RICS. In the case of service charge accounts, ACCA and ICAEW provide the gold standard – what they say goes.
The other cogs in the mechanism of the lease are, typically, how long after the accounting year end the service charge statements should be sent to leaseholders. The law says six months’ after – but the lease may be more prescriptive – say two months’ after, as with my lease. Another cog will state how service charge is to be apportioned. Typically, some costs will be apportioned on a block-by-block basis e.g. lighting of common parts and buildings insurance whist other costs e.g. managing agents’ fees will be divided equally amongst all members of the management company. The lease can be quite specific on how charges are to be apportioned. For years until quite recently our management has ignored this requirement to apportion charges meaning some leaseholders have been subsidising others.
Management needs to comply with ALL for service charge to become due. If you should get a letter from the management’s solicitors threatening court action, reply nicely requesting the accounts’ information in accordance with your lease – it’s helpful to list the information you require. They are likely to reply that they are consulting with their clients and you won’t hear any more – at least for the time being.
The point you raise about ‘last year’s estimates’ and ‘costs rising annually’ brings into play another tricky aspect of service charge accounting. It’s not unusual for management to chuck unspent service charge into what they glibly call Reserves. This is unlawful. Section 19(2) of LTA85, above, requires quite specific accounting 0f service charge that is left over at the end of the accounting year.
The lease will quite likely state how the Reserve fund element of service charge is to be operated. My lease says that if the management chooses to operate a Reserve fund, then the money set aside for capital expenditure items (e.g. roof repair) must be updated every three years. For obvious reasons, that requires a capital expenditure plan (Capex) to be in place (you can’t update moonbeams).
Currently, I am battling with management over this particular issue of accounting for Reserves, having largely succeeded in persuading them that compliance with the mechanism of the lease is next to godliness in management terms. But it’s not been plain sailing.
We were one of the estates affected by the Rendal & Rittner/Simon van Houtem fraud scandal, making it doubly important too ensure that our Reserve funds are properly managed and accounted for.
For detailed info relating to your particular lease, try IBB, see what they say 🙂
These leases didn’t come about by accident. They are the result, like so much else in leasehold, of sharp practice. The managing agent contracted by the developer normally has a quite an influence on the terms of the lease. It is not credible that Mr Southam could have inadvertently omitted ensuring that the leaseholders had the right to take over the site.
As for the idea that most problems being caused by leaseholders arguing among themselves when they fall out with RTM and RMC directors: this is also not a credible assertion and I note that it is unsupported by any data.
I have been a leaseholder for nearly 20 years. I have been an officer of an RTM for 6. During that time I have been in contact with dozens of other residents’ associations, RTMs and RMCs in London, as well as with ARMA, LKP, FPRA, CARL, the Law Commission and others. I have a reasonably good understanding of the leasehold landscape.
Most problems in my experience are a result of conflicts of interest, which is exactly what Mr Southam is manifesting PUBLICLY.
Was he asked to make a declaration of interests before taking up his role with LEASE? Did he make a full disclosure?
Mr Southam has been a member of the Transparency Working Group of the Royal Institute of Chartered Surveyors and works as a business coach and mentor and he likes to publicise his charity work and his connections with royalty. [REDACTED …] I’ll take less colour with unimpeachable integrity every time. How’s about that then Roger?
This is shocking.
A family member has bought into a shared ownership scheme in one of the developments apparently controlled by Mr Southam and has found first, unexpected and unfair expenses and second, intractable problems with the newly built apartments including: underfloor heating that doesn’t work; leaks and damp; water heating that doesn’t work; transfer of noise from other appartments; plans that fail to show the correct location of resources.
A range of companies have denied and/or passed on responsibility for major building flaws, and a sequence of builders have been in and out of the apartment with no apparent improvement in the situation, but a lot of holes in ceilings and removed tiles.
All the apartments in the development seem to be suffering similar problems, and there is an active residents’ group attempting to get redress, but finding that the byzantine ownership/management structure frustrates them, and that the dual roles of Mr Southam have made them cynical about any possibility of support from the organisation financed by government to help them.
Byzantine ownership and management structures aside, what year were the newly built apartments actually built?
These developments should be covered by the NHBC Buildmark warranty that provides cover at various levels up to 10 years. It includes insolvency cover if the builder goes bust with 2 years and a RESOLUTION SERVICE if he proves to be intransigent during those first 2 years when he is liable for making good the issues you mention like underfloor heating, leaks and damp. In years 3 – 10, Buildmark covers damage to e.g. floors, staircases, roofs, drains, windows and doors.
In addition, it would be helpful to know who was the Builder Control officer – and at which Local Authority. They can be helpful in enforcing regulatory compliance. It may be that NHBC itself performed the role of building control – signing off at each stage of the building process at the development/s you refer to.
In any case, if the byzantine ownership itself proves intractable, I’d raise the roof down at the local authority offices – not just building control, but health & safety, sanitation etc. And don’t forget the fire officer – sounds like he could be interested, too.
If these guys think there’s an issue, they’ll waste no time in tracing the culprits, no matter how byzantine or intractable the management is. The development doesn’t have to be local-authority owned.
Mr Southam will probably seek to discredit any criticism by pointing to his long track record.
The question to be asked is how could such leases have been created by accident.
Anyone who knows how leasehold sites develop can explain – they can’t.