The £7 million (?) (US$12m) swindle, engineeredby surveyors and lawyers, and implementedwith the assistance of tribunal, courts,accountant and police |
The Business Model of the unscrupulous landlord in 21st century England |
Business Model - Home
The following represents my view of the business model in operation in the residential leasehold sector. I have named it 'The Business model of the unscrupulous landlord in 21st century England'The shorter description is: "Methods used for ripping-off leaseholders" As it is essentially a summary of the events in my case, in parts reinforced by the experience of numerous other leaseholders I am in contact with, the focus is on the methods used for getting leaseholders to pay service charges for works that are not due and payable - with the additional payoff of getting some flats at below market price due to the resultant situation. (I know from other leaseholders that other models demonstrating 'methods used for ripping-off leaseholders' can be drawn-up e.g. when leaseholders want to exercise their 'right to buy the freehold - e.g. see My Diary 11 Nov 06) While, in the case of service charges for works, there are of course variations in the events and their sequence, sadly, the following model is, for the main part, reflective of the practices used by many of the players in the English residential leasehold property sector. Examples are provided in support of the statements for the benefit of the visitor to the site who has not read other sections on this site. (Unless you are one of the hundreds of thousands of leaseholders who have had a similar experience, in all likelihood, you would find many of the claims impossible to believe without the supporting evidence. And even more so if you are from overseas) Please NOTE: As emphasised throughout this site (e.g. My Diary 6 May 2008 ; home page # 15 , # 4.17 , # 4.18 , # 4.22 , # 4.23 , # 4.24 , # 14 ) NONE of my complaints have been upheld Please note also that, as I have stated on numerous occasions throughout this site: I am NOT a lawyer. (My knowledge is essentially self-taught from books, first-hand experience, as well as desk research. But, against that, I'll boast about the fact that, after a 16 months battle with Portner and Jaskel and West London County Court, "ALL of the 27 February 2007 claim" against me was dropped on 6 June 2008 (Portner # 28 , # 29 , # 30 , # 31; My Diary 7 Jun 08), following my 'knock-out' 3 June 2008 Witness Statement - and I managed to recoup some of my costs (although I consider that I should have been able to recoup ALL of my costs, as well as have the courts take action against Portner and its client, Mr Andrew Ladsky) - see My Diary 30 Jan 09 Sections
What kind of people can do that? Obviously: very, very sick, morally depraved, despicable, beneath contempt scums. As to' why they do it?' Because they know they have carte blanche to do exactly as they please. It's a 'free for all' - a bottomless cesspit of interconnecting caves of corruptiion - and there is absolutely nowhere leaseholders can turn to for help. As a visitor to my site wrote (# 17) "If you complain you are accused of threatening "Them" and if they threaten you, they are protected"
And the implementation of the business model also relies on FEAR... among others - (which I also view as a factor for the complete silence from consumer and Human Rights groups in relation to what is going on in the sector). (I and other people I know have approached both types. When we received a reply it was: "We don't deal with leasehold matters"). (Note at April 2009: BBC1 Watchdog is beginning to dip its toe - see the blog on a firm of managing agents at http://www.bbc.co.uk/blogs/watchdog/house-and-home/) Hence: FEAR is what keeps the residential leasehold system firmly in place - and growing (home # 4.19 ; points # 29 and # 30, below) (Control of people through 'fear' (and surveillance: overall ; in my case) is on the increase in this country - down to the level of the darkly comic e.g. the 'dustbin police' ; ending-up in jail over an apple core ; ending-up with a criminal record for forgetting to swipe a bus card) However, the impact of the recession is forcing leaseholders to 'come out', as they find it increasingly more difficult to "hand on the baton" e.g. The Observer article of 5 April 2009 "Flat owners left flat broke as service charges shoot through the roof" • Leaseholders' ignorance of their common law rights and statutory rights, and the general public's fear of legal matters - make them 'easy prey' for the scare tactics used by rogue landlords and their aides. The endless amendments and additions to landlord-tenant legislation further add to leaseholders' feeling of incompetence... • ...combined with no public funded support in place to assist them, other than (in my view, intentionally) ill-equipped Citizens Advice Bureaux - thereby forcing leaseholders towards the very expensive private sector for assistance. (LEASE has good knowledge of legislation, but my first-hand experience is that, being a government department, you get the 'party line') This is the second major element of the foundation of the business model, as it makes leaseholders more 'amenable' to their 'advisers' argument of 'making a commercial decision' through striking a deal...to the benefit of all - at the expense of the leaseholder. • A system that provides assistance to abusive landlords and their aides in using and abusing leaseholders at will • Legislation that is heavily biased towards landlords - with changes that would make a difference, held on the back-burner (that way they can be 'fed' to the media as evidence that the government is 'doing something about it'), while others further play into the hands of crooked landlords • Courts and tribunals where only 'professionals' (regardless of their profile) have a voice • Inequality of arms as landlords tend to employ expensive counsels to fight the leaseholders, and then charge the costs to the leaseholders - often with the 'blessings' of tribunals and courts • Professions that are motivated solely by their own interests, free to do exactly as they please, without fear of sanction - due to self-regulation • The police which - at best - will not intervene in landlord-tenant disputes, including those involving criminal actions by landlords and their aides (fraud, theft, blackmail, harassment, intimidation, etc.) In other words: an ideal environment for institutionalised corruption or, as a visitor to my site wrote (# 17) "organised crime". (B) The business model in detail
The majority of leaseholders are 'easy targets' due to their lack of knowledge of the leasehold system and of their rights - aided by an environment of complex and ever changing legislation, as well as a supporting infrastructure that benefits greatly from keeping the system in place. (People's misunderstanding of the leasehold system is apparent when they (British and foreigners alike) say that they " bought a flat ' (apartment). If it is a leasehold flat, they have not. They have only bought a lease. This misconception is understandable when you consider that leasehold flats in the U.K. are among the most expensive in the world - where flats are generally bought in perpetuity) Most leaseholders do not even tend to read their lease (which can vary greatly), partly due to the frequently convoluted text and partly because they view it as 'something legal, best left in the hands of a solicitor'...more often than not to their demise. The 'ideal' leaseholder profile: • On a salary making them easy targets for bullying, blackmail, intimidation and harassment as they will not have the funds to employ advisers - and have no where else to turn to (e.g. solicitor letter to me v. 10 days later to the solicitors of another leaseholder) • Foreigners because they are totally clueless (no offence meant) about the leasehold system as, in their country, you buy a flat in perpetuity and are your own master - and you most definitely do not pay service charges without proper justification (e.g. Resident M to the Leasehold Valuation Tribunal) • Leaseholders who use the flat as a second home: living overseas will force them to employ solicitors, etc. to represent them; the rapidly mounting costs will lead them to 'cave in' to the demands fairly quickly (e.g. Leaseholder C ; Leaseholder M ; LVT 8.1.2 ; Other Residents ) • Leaseholders who 'bought' the flat for investment purposes: their tenants provide a lever as they are easy targets for harassment and intimidation (e.g. Leaseholder F ) 'Profiling' of individual leaseholders is gathered through 'insiders' befriending leaseholders. It can also entail listening at doors, going through the rubbish/garbage bins, intercepting private mail (including 'dipping' into the postman's bag (which is a criminal offence under the Postal Services Act 2000, s.83 and s.84) if he has left it in the entrance to save carrying it up several floors while delivering the mail), having leaseholders followed (e.g. My Diary 26 October 2003 ; 1 June 2005 , 16 May 2006 , 25 October 2007), installing bugging devices, etc., etc.
'Hand-picked' team of greed ridden 'professionals' comprising of surveyors, lawyers, builders, etc. who will stop at absolutely nothing to ensure the successful execution of the scam - including breach of legislation (e.g. filing a false court claim, and another example; Court claims = FRAUD TOOLS)
Under statutory requirements, a change in the ownership of the headlease / freehold requires issuing a notice of 'first refusal' to the leaseholders. A pretence at going through the motion leads to issuing 'notices' that rely heavily on the 'bag of tricks' to dissuade leaseholders from contemplating the offer: the threat of impending litigation is one of the favourites (e.g. 13 December 2000). To make sure leaseholders 'get the message', it can be followed by additional correspondence (e.g. 25 January 2001 ), as well as appalling harassment and intimidation of the person driving the leaseholders response to 'the offer' (e.g. Head of Residents Association ; 13 December 2000 "Notice") The 'notice' is usually sent to coincide with a holiday period with the objective of curtailing leaseholders' ability to reply within the statutory set time. The 'favoured' time is just before Christmas (e.g. 22 December 1999 ; 13 December 2000 ). (A notice sent around this time of year is a telltale sign of an intention to breach leaseholders' rights / rip them off). Capitalising on leaseholders' lack of experience, omissions / errors can be included - with ulterior motives. If leaseholders are not tricked by the false claims / threats and manage to overcome the hurdles, at the last post the 'notice is withdrawn from 'under their nose' - using the 'just in case' fall back measure that had been factored in at the time of issuing the 'notice' (e.g. appendix not supplied ) Meanwhile, the change in ownership nonetheless takes place - and hence, in breach of leaseholders' statutory rights (e.g. change at 1 June 2001) The 'upside' during that time is that landlord and aides have 'a good laugh' seeing the lessees trying to organise themselves - and spending money. The more money they spend, the better. Among others, it will put quite a few lessees off from taking part in another joint action - which, of course, works to the benefit of the landlord and his aides. Relying on the knowledge that they have carte blanche to do as they please, landlords and solicitors will even issue bogus notices.
If the experience has proved to be a 'close shave', next time round leaseholders are not given 'first refusal ' (1.1MB). (It amounts to committing a criminal offence, under section 10A(1) of the L&T Act 1987, but that's of no concern as there is no fear of sanction). Meanwhile, the Land Registry obligingly registers any title regardless of the implications on the leaseholders' lease - and in spite of previous decisions to the contrary. Who cares! There are only 'insignificant' leaseholders, with limited financial means and no influential connections - there to be used and abused by the dearly beloved, sacrosanct landlords - and leaves the leaseholder to sort out the mess it created , repeating the same message.
Harassment and intimidation tactics can be used to get rid of the residents association in order to eliminate all opposition and the possibility of leaseholders acting as a group (e.g. 18 December 2000 ; 14 January 2001 and covering note ; 16 January 2001 ; 29 January 2001 ; 30 January 2001 ; 31 January 2001 and witness to some of the events) This tactic is based on the anticipation that leaseholders will then have no/little contact between each other, leaving the field wide open for coercion by spinning different stories to individual leaseholders (e.g. Resident F ; 5 August 2003 ) Leaseholders who attempt to set-up another association are shot down in flames (e.g. email 30 January 2002 )
A notice of an intention to appoint a surveyor is sent just before... yes! Christmas! (e.g. 21 December 2001 ), greatly increasing the probability of the landlord having his selected surveyor to undertake the survey. Leaseholders who manage to respond within the severely curtailed timeframe can nonetheless be told that they missed the deadline in spite of having stated that they replied within the deadline (e.g. email 30 January 2002) (= an expedient way of avoiding compliance with section 20(4)(e) of the L&T Act 1985) Outcome: landlord's surveyor is appointed. Landlord's surveyor goes 'heavy' on the terrible state of the building, placing strong emphasis on all of the most expensive items affected by the plans (e.g. roof, lift and boiler), describing them as having "come to the end of their useful life" and, consequently, in "urgent need of replacement" (e.g. February 2002 (2.3MB)) Of course, these false claims will continue on being repeated at every opportunity (e.g. 26 March 2002 ; 16 December 2002 ; 4 March 2003 ) - including the claim of "urgency" (e.g. 30 January 2002 ; 20 January 2003 ; 4 March 2003 ) The appalling state of the building can actually be the case, due to lack of repair and maintenance while the setting-up of the scam was in motion (e.g. stating on 7 June 2001 that " works are now overdue" and not starting the works for another three years ; admitting that repairs had not been carried out for nine years, point 38 - thereby in breach of repair covenants)
(19.1) Using the 'managing' agents to do this - Examples• Vehemently asserting that the information has been supplied and claiming that the only reason the leaseholders are challenging "the perfectly reasonable demand" is because they do not want to pay it (e.g. 16 December 2002 ) • Repeating the same lie to the tribunal (e.g. 20 January 2003 ) (proof of lie: point 14 ) • Claiming rapid deterioration of all the major items that will be affected by the plans for expansion (e.g. 20 January 2003 ; points 19, 27 and 35 ) - and attributing these to the leaseholders' challenge of the application under the excuse that it prevents "repair" works from taking place. • Leaseholders can be also be portrayed to the tribunal as callous and inconsiderate by making-up other equally fictitious, scurrilous claims (e.g. point 27 ) (19.2) Using the landlord's surveyor to do the same thing - Examples• Claiming that the required information was sent to leaseholders (e.g. point 2.10 ) (Evidence against: envelop at the end of the pack) • Communicating outrage to the tribunal in relation to leaseholders' claim of non-provision of the information required under statutory requirements and under the terms of their lease (e.g. point 2.11 ) (v. self admission to the contrary under point 2.04 ) • Claiming that the challenge by the leaseholders is totally unwarranted and will only lead to the outcome of increasing costs unnecessarily (e.g. Section 5 ; Brian Gale # 4) (leading a leaseholder to hand out a reply to the LVT ) • Denial of the intention to undertake works other than those allowed under the terms of the lease e.g. point 4 -1.4 "I am able to categorically state the specification makes NO provision for the building of a penthouse flat" ; point 19 "regarding the penthouse...subsequently found that it was not a viable proposition" As can be seen in this pack (2.3MB), Major works and photos - the above were false claims, or put simply: LIES . (19.3) Getting the landlord's counsel to join in on the act - Example• By having him claim at the start of the tribunal hearing that "the reason [the leaseholder has] been challenging the service charge demand is because [he./she] did not want to pay it" (i.e. is dishonest and in breach of the covenants in the lease) If only one leaseholder is left 'facing the music' in the tribunal because of being deserted by the others (who are running scared as they have been 'hit' by the court claim before the tribunal hearing ), or have not been informed of it (LVT # 8.1.3 , # 10.1) the opportunity is taken by the landlord (e.g. point 50 ) and his aides (e.g. point 5.02 ) to portray the leaseholder as being the "only objector" to the service charge demand (e.g. Brian Gale # 4 , # 4.1 ) Of course, the tribunal conveniently ignores the fact that it has been informed - with evidence in support - that the landlord has filed a claim against 11 leaseholders representing 14 flats. Mysteriously, one year - AFTER - the tribunal hearings, the managing agents sing an entirely different tune by communicating to the lessees that "Due to extensive delays in collecting the contributions from all (NB!!!) lessees..." (19.4) Not wanting to be left out, the landlord comes out of hiding from behind his puppets to add his contribution during the hearingsHe piles on the scare tactics during the hearings - thereby adding to the intimidatory actions over previous days: from the 'friendly' local police, and from his solicitors. Frustrated that it has not achieved the objective, he writes a letter to the tribunal ahead of the next hearing, in order to discredit the leaseholder (e.g. point 50 )
While the report by the tribunal can be very damming of the specifications and costs, the war is not lost as, at the 11th hour, the tribunal can make what amounts to a U-turn by not including a summary of its determination on the global sum demanded - thereby failing its remit " to determine the reasonableness, or otherwise of the service charges as a whole to go on the service charge account" The first request for a summary to be included is refused on the ground "that the tribunal does not have the power to re-open a decision" When the reply highlights that including a summary does not amount to "re-opening a decision" - "rather it is about your tribunal completing an unfinished report" - and reiterates the request, it is yet again refused on the grounds that "this may well be regarded as providing additional reasons" (YES: to the leaseholders to challenge the service charge demand!) Escalating the request to a higher level leads to the same 'get lost ' reply (Prescott # 1.4 ). Of course, the benefit to the landlord of NOT having a summary included in the report means that leaseholders who did not attend the hearings will find it next to impossible to use it to challenge the service charge demand. This is in spite of the fact that the tribunal's determination applies to the WHOLE block i.e. to every leaseholder in the block (e.g. point 64, page 15 , 21 July 2003 ; 9 August 2003 ) In tandem with this, the summary of the case placed on the LVT's website is factually inaccurate , and will remain as such - as the request to have it amended to reflect the true situation is refused The game plan in not including a summary also relies on the fact that leaseholders have been forced to incur massive professional fees during the tribunal hearings (as professional representation has proved to be necessary), thereby reducing the probability of their spending yet, another considerable amount of money to get a professional assessment of the tribunal's determination - and will consequently give up. And if the lessees take-up the challenge? Who cares! The taxpayer picks-up the cost of the tribunal. Another 'little bit of help' to the landlord comes in the shape of a prominent ( placed on the first page ) categorical statement that a price increase will take place - TWO weeks AFTER - the tribunal signs its report and, in the process, blames the leaseholders for this. Of course, this is also picked-up in the summary accessible to the public, by being placed on the database, as this information will be extremely helpful to the landlord and his aides as justification for demanding more monies - by communicating this to other leaseholders who opted to not challenge the original extortionate service charge demand (They will not know any better as the tribunal has not issued a summary of its decision on the "reasonableness of the global sum demanded" ) Thanks to the poisoned chalice from the tribunal, the leaseholders' battle with the landlord's aides rages on for another year, this time, in the courts.
During the pre-trial hearing, the tribunal clearly communicates to the leaseholders - in the presence of the landlord's party - that it only has jurisdiction over " service charges that are still unpaid " (page 5). In other words, the tribunal tells the leaseholders to NOT PAY the service charge until it has issued its determination, and it has therefore been implemented. Getting concerned that things are not running as smoothly as anticipated, to frighten and coerce the recalcitrant leaseholders into paying, the landlord ignores the instructions given by the tribunal to the leaseholders and asks his solicitors to draw-up a claim against all of them - for the original sum demanded. The claim is endorsed by a 'Statement of Truth' from the 'managing' agents that the sum claimed is "due and payable". UNBELIEVABLY, the court accepts the claim and proceeds with it, issuing charging orders, judgments etc. against the leaseholders - in spite of the fact that it is in very serious breach of Civil Procedure Rules as "Managing agent who manages property or investments for the party cannot sign a statement of truth" and that "a party may not rely on the contents of a statement of case as evidence until it has been verified by a statement of truth”. For good measure, the landlord also attaches a lease to the claim that has a very convenient clause ( (2)(2)(c)(i) ) as it states that "The amount of Service Charge payable by the Lessee for each financial year...shall be a fair proportion ( to be determined by and at the sole discretion of the Lessor )." - and FALSELY claims ( point 5 ) that this lease is representative of all the leases in the block (it most definitely is not ) (CKFT # 6.7 ) (WLCC # 3 ) (21.1) The court wrongly lets the landlord's aides file just one claim against all the leaseholders(In my non-lawyer opinion), to allow the landlord to file just one claim (1.1MB) against all the leaseholders is wrong as it implies that they are jointly and severally liable for the claim - which they are not - as they are merely liable for the percentage of the total charges, as specified in their lease (WLCC # 1 ) The upside to the landlords is that it costs only £500 (US$880) to file the claim. (21.2) ( Like the tribunal ) the court turns 'a blind eye and a deaf ear' to an abuse of process of court and, when challenged, puts the responsibility on the leaseholders to sort out the situationAlthough it amounts to an abuse of process of court (e.g. 12 December 2002 ; 9 April 2003 ; CKFT # 6.1), as well as places the leaseholders in a situation of double jeopardy (same action pursued simultaneously under two separate jurisdictions), the court turns 'a blind eye and a deaf ear' to this (e.g. my EIGHT documents to West London County Court), eventually replying to the leaseholder that it is up to the leaseholder to seek agreement from the landlord's solicitors to stop the action (WLCC # 4 ) = the leaseholder is sent from 'pillar to post' and is evidently expected to police the conduct of solicitors The same request for assistance to the tribunal , leads to the "not our problem" reply. Not surprisingly, given this 'Wild West' environment, more leaseholders end-up paying the unjustified and consequently, unlawful service charge demand - taking the 'I made the commercial decision pill' so freely handed out by legal 'advisers' to make leaseholders feel better. (21.3) In spite of being informed that the same action is being pursued in the tribunal, the court plays an active part in making some leaseholders pay - BEFORE - the tribunal has issued its determinationFor the remaining brave leaseholders who are still fighting the fraudulent claim, the court helps the landlord secure, among others, judgements against some of them BEFORE the tribunal has issued its determination (e.g. 23 May 2003 ; 1 April 2003 ; 29 June 2004 ; 23 August 2004 - point 11) It does this in the full knowledge that leaseholders have been told by the tribunal to NOT pay the service charge until it has issued its determination (e.g. my EIGHT documents to West London County Court) As well as doing it against the tribunal's determination: ".the Respondent and other tenants (NB!!!) could not be forced to contribute in the case of improvements and/or works not determined as reasonable by the Tribunal..." ( point 64, page 15 ) In the process, the court turns 'a blind eye and a deaf ear' to all other information supplied against the claim not only from leaseholders acting in person (e.g. 22 June 2003 , 15 July 2003 ; 9 August 2003 ) , which it clearly views as non-entities, it also ignores correspondence from the tribunal - on which it has been copied (e.g. 21 July 2003 ). Of course, it also turns a blind eye to the documents filed by the landlord's aides which it could use to question / challenge the action (e.g. an application for hearing claiming that amendments have been made since a previous hearing when, in fact, comparison of a document supplied with the application with that supplied for a previous hearing , clearly shows that this is not the case. In this instance, it also ignored the blatantly obvious evidence that leaseholders could only be charged on the basis of a fixed share of a global sum that has to be the same for all) (WLCC # 9 ) In fact, it happily accepts anything and everything from a member of 'the tribe' i.e. lawyers (e.g. 3 September 2003 ). Hence, a repeat of what happened with the tribunal where the dominant 'tribe' are surveyors. The court can keep on turning 'a blind eye and a deaf ear' to the evidence (e.g. 22 July 2004 ) until the very end (e.g. order against the last valiant leaseholder). And if the leaseholder is yet again dragged through the courts by his criminal landlord - with the help of his equally criminal lawyers? That's an opportunity to repeat the show! Of course! It's a lot of 'fun' persecuting the 'little people' - by abusing power.
It's a lot of 'fun' persecuting the 'little people' - by abusing power. Examples . Wrongly insisting that a charging order concerns a leaseholder (Lord Falconer of Thoroton # 1 ) . Wrongly informing the leaseholder of being the defendant in a trial ( summary of events ) (LFT # 5.1 ) . Wrongly informing leaseholders that a judgement has been entered against them (e.g. 29 June 2004 ; 23 August 2004 ) (LFT # 2 ) . Not following instructions , leading them to miss a hearing , and then insisting during a subsequent visit to the court that no hearing took place (LFT # 3 , # 5.2 ) . Sending a notice of a hearing without any explanation, and doing this before the leaseholder receives the necessary information - who did not know when it was due to be released (LFT # 5.4 ) . Agreeing to a hearing in spite of the fact that the leaseholder has communicated to the court having leave of appeal (a combination of the lack of information in the notice of hearing , sent before the leaseholder has received the necessary information and the unbelievably short amount of notice, puts the leaseholder at a great disadvantage... just what the landlord ordered as, the greater the number of hearings, the greater the likelihood that the leaseholder will 'throw in the towel'. Nonetheless, a token gesture can be made by throwing a few crumbs at the leaseholder) . Judges not reading even the skeleton argument, leading them to take directions entirely from lawyers as to what they should do (e.g. transcript of the 28 May 2004 hearing ) (LFT # 3 ) . Giving 'freebies' to the fraternity such as ordering that an action be stayed (open to further proceedings) - even though the judge knows that the action has been settled (In the process, the judge also gives a little bit of friendly advice to the member of the tribe for securing the deed with the 'troublesome' leaseholder) (LFT # 3 ) Etc., etc. (See Lord Falconer of Thoroton for detail)
The coercion tactics to strike a deal comprises of blaming the leaseholder for the resultant situation - including to the court (as has already be done with the tribunal) - and the use of the sine qua non of the 'Business Model of the Unscrupulous Landlord in 21st century England ': the threat of "costs" - if the leaseholder does not comply - amounting to, among others, committing criminal offences under the Malicious Communications Act 1988. But, this is clearly of no concern as, with all the other breaches of legislation, regulations and codes of conduct - there will not be any sanctions. Examples: 25 June 2003 - "It is our view and that of our client that to continue with enormously expensive legal proceedings make no sense whatsoever. It seems to us pointless to continue to waste further money. The net result of the proceedings is that substantial sums have been expended by all parties on legal costs" 25 June 2003 - "...the costly LVT process has now resulted in a percentage uplift in the contract figure and a significant delay in the project. We should, therefore, strongly urge you to meet with our client." 17 July 2003 - "We also take this opportunity to repeat our offer to attend a round table meeting in an effort to resolve this matter" 21 July 2003 , to the tribunal "... the costs of any further hearing or submissions are likely to be disproportionate and unnecessary" 24 July 2003 "Clearly substantial costs will be incurred if the court has to deal with the determination of this issue..this is a matter which could be dealt with between the parties at a round-table meeting. We note your failure to respond to our repeated invitations. In the circumstances, we reserve the right to refer to this and previous correspondence in relation to any subsequent issue as to costs" 7 August 2003 "...we have made numerous offers to meet with your client in order to try and resolve this matter by negotiation. She has declined to accept those offers. We shall contend that this is a relevant matter in relation to the question of costs " 21 August 2003 - "...In readiness for the hearing, we enclose, by way of service, our client's statement of costs" 21`October 2003 - "...and to continue to defend these proceedings is her own. Her decision to do so has caused inconvenience and expense to all the lessees of the building... If the offer is rejected and your client is held liable at the trial." (The threat of "costs" is also used as part of the revenge tactics: e.g. 26 May 2004 - "...Your advisor informed you of the consequences of refusing to agree the Order...we will be seeking an order for our client's costs." ) During that time, the 'managing' agents communicate to the other leaseholders that the 'hooligan-like', minority of recalcitrant leaseholders who "are delaying the implementation of the works" are being dealt with by the landlord's solicitors who "are actively taking action against the lessees in default in order that their payments are forthcoming" ( 5 August 2003 )
Being treated as a non-entity by the tribunal had forced the leaseholder to employ, at very great cost, a 'small army' of advisers. Seeing that the same situation is being repeated in the court, in terrible anguish about spending more of his / her life savings, the leaseholder opts to appoint a firm of solicitors in the understandable expectation that this will finally help obtain fair and just treatment in the courts i.e. justice. However, being new to the game, the leaseholder is not aware of the widely shared understanding between many leasehold property lawyers (whose clients are predominantly landlords as they often manage to charge all their costs back to the leaseholders), that landlord-tenant disputes are generally settled through striking deals - on the " strong advice " of the lawyers who believe that it is their "duty to do so" . Consequently, at the time of appointing the solicitors, the leaseholder communicates the objective of wanting the dispute to be settled justly and fairly - that is to say, as per the terms of the leaseholder's lease and statutory rights i.e. not through striking a deal. When the reply from the solicitors states that the landlord's solicitors called saying that "in view of the costs being incurred by both sides they asked whether we would be amenable to any deals", the leaseholder communicates the same message: NO! , while reiterating the reasons, and thinks nothing more of it than the solicitors wanting to confirm the position. Having paid several thousand pounds in fees, as events unfold, the leaseholder realises that the game plan IS to lead him / her to strike a deal. From then on, the daggers are out: the leaseholder WILL be made to strike a deal. It starts off with "Com'on, look at what you have spent so far. It's nearly as much as they are asking you to pay. It does not make any sense. Best you settle Dear, make a commercial decision. Strike a deal" Many leaseholders 'cave in' due to the rapidly mounting costs (the foundation of the business model) - thereby further encouraging this practice which has practically become the norm. (Hence the retaliation against the leaseholders who 'dare' to fight back) When the answer is still 'NO' because the leaseholder simply cannot understand why a deal should be struck given that he / she has a mutually binding legal agreement with the landlord that sets out the nature of the liability for service charges - supported by legislation - the 'machinery' is cranked-up another gear. Everybody jumps on the bandwagon - on both sides i.e. leaseholder's 'advisers' and landlord's aides by blaming the leaseholder for being 'unreasonable' and, by implication, for being the cause of the mounting costs (e.g. point 5 and 4(8) ) - very conveniently forgetting in the process that the landlord and his aides are entirely responsible for everything that has happened ( point 60 ) (In the situation where from Day 1, the leaseholder agreed that works needed to be carried out, but was not prepared to write a blank cheque ) Seeing that the leaseholder is intent on going all the way to trial if necessary, the landlord opts to make an ' offer ' (still taking the opportunity to make false claims) (as well as breaking all the rules in the process ) ( points 170-173 ) This 'offer' = threat of forfeiture and bankruptcy proceedings, as well as court claims = FRAUD TOOLS The cabal now gets into full swing - evidently with the shared understanding that the whole arsenal will be used to lead the leaseholder to strike a deal. (24.1) The threat of 'costs' is used as the key lever for coercionThe threat of 'costs' is incessantly used as a means of coercing the leaseholder into submission ( 19 September 2003 ) ( point 3.3 ) ( point 45 ) (amounting to committing an offence under, among others, the Malicious Communications Act 1988 - but who cares! There is no worry about sanctions) This can entail telling the leaseholder in no uncertain terms that he / she is in a "very weak position.with no technical defence to the claim" ( point 29(5) ) and is consequently " at risk for the landlord's cost if the case goes to trial " The leaseholder is warned that if this advice (of course, given under a "duty of care" ) is ignored, he / she will be made to repent when "...in the likely event that the defence fails, render a final bill for the costs of the litigation and remind the client that the disastrous outcome was in accordance with the original advice given" ( point 66 ) (When subsequently challenged on the rationale of the arguments, it led to "I accept that it is possible that, given the level of the sums disallowed by the LVT and the criticisms that could be made about the landlord's conduct, a Court may have been persuaded to make no order for costs" ( point 6 ; point 33 )) (24.2) A variety of claims can be made to undermine the leaseholder's confidence in his / her case - Examples• A tribunal decision described as "a mixed bag" ( point 21 ) i.e. would not stand-up in court (position not maintained when subsequently challenged as it led to "I accept that the outcome was a significant reduction in the amount due from the tenants" point 4(1) ; points 33, 37 and 38 ) • The landlord cannot be faulted as there has been "substantial compliance with legislation" ( point 3(2)) (thereby self-contradicting a previous statement of "inadequate specifications and inadequate way in which the works had been specified or tendered" ( point 58 )) • Holding against the leaseholder the turning down of opportunities to 'strike a deal' ( points 15 and 66) and having " only paid " ( point 8 ) part of the amount claimed - conveniently overlooking the fact that the leaseholder had followed the very specific direction from the tribunal to not pay the service charge until it had issued its decision and it had therefore been implemented ( points 34 and 35 ) - and the only reason the leaseholder had ended-up paying part of it was because of the 'Wild West' environment of the courts (as well as recognising from Day 1 that works were required). • Dismissing the leaseholder's request to be provided with the year-end accounts on the grounds that it " can only complicate matters " ( point 19 ) - even though non-provision amounts to a criminal offence ; ( point 20 ) • The leaseholder, yet again re-emphasising the position , as well as claiming that the offer does not comply with legal requirements , can be shot down in flames by stating that " it is not a realistic assessment of the strengths of the parties' respective position" (subsequently followed by back-tracking on the claims as evidenced by the above examples) To convince the leaseholders of the claims, it can be emphasised that it is "the correct advice, being given under a duty to do so" ( point 64 ) - and that it is done from a position of extensive experience (which is not put in practice ( point 8 v. point 13 ) ) Reality: threat of forfeiture (and bankruptcy proceedings), as well as court claims = FRAUD TOOLS (24.3) Steps are taken to prevent the leaseholder from inputting into the reply - as it says 'amen' to everythingTactics are used to keep the leaseholder under intense pressure while the deadline for the reply to the ' offer ' looms. (My Diary 11November 2003 , 12 November , 13 November ) The end game is to prevent the rebellious leaseholder from having the opportunity to input into the reply, because it falls right into the hand of the landlord by saying 'amen' to everything (points 52, 55, 56 and 79 ) - not voicing any criticisms at the landlord ( point 46 ). Among others, the reply might barely acknowledge breaches of the leaseholder's lease (My Diary 28 October 2003 ) ( PSB # 7.8 ) ( point 55 ) (points 23, 19, 49 and 123 ); ( points 29, 40, 52, 55, 66-70) and statutory requirements ( points 20, 43 and 44 ) (as some 'advisers' interpretation of requirements can be rather 'unique' ); it can ignore the findings from a tribunal ( point 16 ) - and the consent order can be drafted in such a way as to leave the door wide open to the landlord to continue with the action ( point 52 ) Consequently, barely 20 minutes after sending to the leaseholder , the draft consent order and notice of acceptance (which the leaseholder has never seen before) ( points 68-73 ), another email arrives stating that the reply will be sent to the landlord's solicitors " in the next 10 minutes " (PSB # 7.11 ) When the leaseholder manages, against all odds, to return his / her comments within the hour , the follow-on reply claims that the feedback was received "too late" and that, in any case, the reply was "as per the leaseholder's instructions " ( point 74 ) (My Diary 14 November 2003 ) Delighted with this outcome, the landlord's solicitors ask for endorsement of the consent order. (24.4) False claims are then made that the leaseholder agreed to the reply that was sentIt leaves the outstanding issue of the fact that the leaseholder has NOT given his / her agreement to the reply that was sent. This leads the solicitors to request it (10 days after sending the reply to the landlord's solicitors) and the leaseholder to reply "No, I am not endorsing it" In spite of having sent the request for endorsement, and of the barrister concurring with the fact that the leaseholder has NOT given his / her agreement to the reply ( point 80 ) the solicitors nonetheless claim otherwise on three subsequent occasions ( first , second , third ) ( points 97-102 and 108 ) (PSB # 7.13 # 7.13.1 ) (My 19 October 2003 Witness Statement) The coercion can include the psychological game of withdrawing support in an attempt to beat the leaseholder into submission ( points 103, 112 ) (24.5) The leaseholder taking back control of his / her case throws the arrogant cabal into disarrayWhen a totally unexpected spanner is thrown in the works by the leaseholder taking back control of his / her case (My Diary December 2003), it leaves the arrogant cabal totally stunned - and trying to figure out the next move - in order to close the deal ( points 104, 106 ) After six weeks, the leaseholder's solicitors come back crawling , while still claiming that the leaseholder has given his / her consent to the reply ( point 112 ) (PSB # 7.13.2 ) (My 19 October 2003 Witness Statement) The landlord's solicitors who have not acknowledged receipt of the correspondence from the leaseholder remain in the wing to see what will happen. As there is no contact from the leaseholder, a week later - and therefore five weeks after the receipt of the leaseholder's reply - the solicitors write claiming that they " have now located the correspondence " sent by the leaseholder ( points 185-188 ) (PSB # 7.13.3 ) ( CKFT # 6.8 )
• The lawyers do not need to spend time reading, understanding, assessing and consequently taking into consideration material evidence (lease, report by Leasehold Valuation Tribunal, defence to the claim, exchange of communication between the parties, etc.)... while cashing in several thousand pounds • The reply does not need to criticise the 'dear landlord' and his aides - as they 'ever so kindly' extended the opportunity to strike a deal • Landlord usually ends up with more money in the coffers that there should actually be • By not proceeding to a trial, no embarrassing official evidence ends-up in the public domain.
Like the Reader of The Times newspaper wrote (My Diary 14 April 2006)
Examples On the same day that the last (valiant) leaseholder ' capitulates ' in court (for, what appears to be an extortionate amount - WLCC # 14 ; Lord Falconer of Thoroton # 5.1), a letter is sent by the 'managing' agents to "All the Lessees" announcing the appointment of a new contractor (e.g. 2 August 2004 ). (For good measure, this letter can be preceded by another letter which, yet again, makes false claims about the true nature of the works) This is done in spite of the fact that a notice has NOT been issued (as the original so-called "notice" has been invalidated through, among others, damning criticisms by the tribunal of the specification) Unlike the original so-called "notice" , this letter deceptively omits to communicate the full cost - which turns out to be only nine percent less than the original demand (when, in fact, based on the tribunal determinantion, it should be 68% less)
Examples: • Falsely blaming leaseholders for the tribunal action (e.g. 4 August 2004 ) - regardless of the fact that the application was filed by the landlord , and the leaseholders are perfectly "within their legal rights" to challenge such application ( point 64 ) (My Diary 5 February 2003) (Of course, the real issue is that leaseholders are not expected to 'dare' to challenge the application and will not therefore expose the scam) • Continuing to blame leaseholders for the delay in the start of the works (e.g. 4 August 2004 ) - even though the reason for not starting the works was the landlord wanting to secure closure in court against all the leaseholders listed on the claim - in the process, cashing in as much as possible - (as evidenced by e.g. the letter from the 'managing' agents announcing the start of the works - on the same day that the last (valiant) leaseholder capitulated in court) • Within three months of agreeing a settlement of the service charge through a consent order endorsed by the court , a new service charge demand is sent - for the same amount as the original amount disputed - without any detail. • It is followed three weeks later by an even higher demand - all with the hope that the leaseholder will again go into battle, which will entail spending yet more professional fees, etc... until the leaseholder is ruined. (Landlord and his aides have the financial staying power as all their costs of fighting the leaseholders will, one way or another, end-up on the service charge for the block - amounting to a double whammy for the leaseholders). (The accountant might prove of assistance on this, and other costs). And the tactics works: 'threat of forfeiture and bankruptcy proceedings, as well as court claims = FRAUD TOOLS • More likely, the leaseholder will leave the block, incurring a major loss in the process - probably by selling the lease on the flat - unknowingly - to an accomplice of the landlord, allowing them to then sell the flat at the current market price, splitting the bounty between them. • The unexpected filing of a complaint by the leaseholder against the landlord's solicitors and ' managing' agents (1.1MB), leads to a one year respite. • At that point, another invoice follows - mysteriously - for a significantly lower amount - even though the two previous invoices have not been paid. However, to keep the leaseholder on tender hooks, no reference is made to the previous two invoices. As with the previous two invoices, there is no detail as to the composition of the sum. As the leaseholder is still throwing punches , another invoice follows - equally as fraudulent as the others. • If the leaseholder 'dares' to criticise the 'managing' agents and landlord's surveyor, it leads to the swift reply (2.3.MB) of "Your allegation is false and we require your written acceptance that you were wrong to make it" (Impudence is not in short supply in this sector!) - and, more than three years later, leads to their 'trade union' clearly encouraging the managing agent to issue proceedings for defamation against the rebellious leaseholder....while the 'trade union' also resorts to fear tactics by threatening the leaseholder with defamation proceedings for 'daring' to expose its 'true colours' in the public domain
In spite of the landlord-friendly attitude of the courts, filing of another false claim against the leaseholder appears to be perceived as too much of a gamble when the leaseholder has a massive amount of black on white evidence against all the parties. In desperation, a scheme is dreamt-up whereby a bogus 'notice of first refusal' (1.1MB) is sent to the rebellious leaseholder - with a relatively low offer price to induce action. Among others: contact with a solicitor due to the potential that such contact could offer. Operating on the basis of unlimited arrogance and belief of superiority, the underlying assumption is that the leaseholder can be easily tricked and will not see through the game. (My Diary 18 February 2006 ; Portner and Jaskel LLP # 1 ) - and if the leaseholder does, as with everything else, there is no worry about sanction When the scam backfires in a big way as the action has led the leaseholder to unearth valuable information that can be used against the landlord and his aides, another - equally fraudulent - invoice is sent, for an even larger amount - as punishment. Of course, yet again: with no explanation on the composition of the sum. Come on! It's a no-lose situation as the only option is for the leaseholder to go back on the merry-go-round of lawyers, tribunals and courts... and we know what happens on this merry-go-round. Unless of course the leaseholder becomes self-reliant through crash learning of the law and takes the criminals head-on (Portner and Jaskel), as well as exposes the detail of the case in the public domain as a desperate attempt to get justice after battling for five years. But, as leaseholders are not expected to do that, it unleashes a cabal of self-appointed 'executioners' absolutely determined to go for 'the kill'. And the more the leaseholder fights back, the greater the fury fueling the determination to go for 'the kill' - by whatever means (My Diary 7 June 2008 ; home page, introduction ; My Diary 2 January 2009)
The players in the sector have no concern about sanction, knowing that the complaints department of their 'trade association' (of which, I understand, they pay most of the salaries through membership fees) will dismiss all serious complaints (acknowledging the remainder for the sake of demonstrating that 'self regulation works!'). As the saying goes: 'Who pays the piper calls the tune!' In addition, the lawyers and surveyors are, of course, the 'kings and queens' of the tribunals and the courts. It is also the opportunity for the professions to lash back at the troublemakers for daring to challenge a cosy, clubby arrangement / not complying with the well established business model. Examples • Complaint against solicitor , dismissed by the Law Society in the first reply and, when challenged , in the second reply , as well as by the Legal Services Ombudsman • Complaint against another solicitor, dismissed by the Law Society • Complaint against barrister dismissed by the Bar Council which, when challenged , engages in a fascinating display of U-turns and pirouettes - playing a double act with the Legal Services Ombudsman - which, when challenged , also makes U-turns - and ultimately dismisses the complaint At the end, the Bar Council 'dutifully' reports the barrister's feeble and laughable excuse that only a three-week period had been spent on the case - a point that it is also 'dutifully' picked-up by the Legal Services Ombudsman • Complaint against surveyor (1MB) dismissed by the Royal Institution of Chartered Surveyors • Complaint against accountant dismissed by the Institute of Chartered Accountants in England & Wales which, in addition to putting the onus on the leaseholders to perform the role of the accountant, gives as - insulting reason (that 'smells' like an input from the landlord): "...the LVT stated that tenants could willingly contribute towards the extra costs should they wish to do so" Fascinating! Indeed, if the leaseholders were that "willing to contribute towards the extra costs" : how come they ended-up being listed on the court claim? (Good of the Institute to confirm that leaseholders have paid "extra costs") In fact, whoever the leaseholders complain against: ALL THE COMPLAINTS ARE DISMISSED - (My Diary 6 May 2008) - communicating the very loud message: SHUT UP! YOU HAVE NO RIGHTS, you piece of dirt! .
Remember that 'threat of forfeiture and bankruptcy proceedings, as well as court claims = FRAUD TOOLS' When the leaseholder wishes to sell, it is more ' jackpot ' time as the leaseholder is so desperate to get out of the prison, he / she will settle more or less whatever is asked...
Among others, at the time of selling the lease, the leaseholder must pay the landlord's professional fees. This provides another opportunity for ripping-off leaseholders. (Note at 11 January 2007: I have just heard from a leaseholder that he was asked to pay £5,000 (U$8,800). 'Apparently, the City law firm used by the landlord charges £1,000 (US$1,800) per hour. Believe that? Bunch of crooks!) See also Comment # 15
As the leaseholders flee by selling the lease on their flat (at times at a discount due to their situation and, because of this, most probably to the landlord - doing this unknowingly) the process can start all over again with the new leaseholders as, of course, they have not been informed of the prior history. Or, depending on what has been achieved, the approach will be 'exported' to another block of flats (Comments # 11 and # 12 ; RICS # 8 , # 12) (30.1) Com'on! It worked last time so, of course it's gone work again next time......because nothing is going to REALLY change e.g. (1) In 1997, pre being elected, New Labour published 'An End to Feudalism'. Not only did it not do anything, 11 years later, in 2008, it opted to retain the residential leasehold sector as it is. (2) Housing Act 2004, Chapter 34 - Section 163, states that sellers would need to prepare a Home Information Pack at the time of selling their home, which includes, among others:
Consider what I would write in relation to these: West London County Court claim (ref: WL 203 537) ; LVT determination (ref: LVT/SC/007/120/02) (ref #992 on LVT database); Land Registry titles that result in the landlord being unable to perform major covenants in the lease (1.1MB); fraudulent service charge demands , etc., etc., etc. - Subsequent note: see my 3 June 2008 Witness Statement for update 'Maybe' I would also be expected to include information available in the public domain on the owners of the block and their aides e.g. Court of Appeal case (as landlord was also a director of the defendant company ; High Court case ) (?) Does that make you want to buy the lease on my flat? As these types of events are common occurrences in the leasehold sector, it would be the end of the leasehold system i.e. the end of landlords, as well as the end of a very good source of income for lawyers, surveyors and other parties in the rest of the food chain. So, no surprise that these plans have been scrapped... to the relief of the head of the Law Society, as can be seen from her comment in the The Times article of 25 July 2006 "I'm not sure what problem these proposals are meant to fix. They're a tax on house sales that will cost money and achieve nothing" As to regulating the legal sector, following the findings from the review by Sir David Clementi, the Legal Services Bill proposes setting-up a Legal Services Board with, it 'seems', some 'teeth'. As can also be seen in The Times article of 25 July 2006 , the head of the Law Society is strongly opposed to this calling it "truly scary" (I bet!) and that "if a regulator is given a power, it will use it" (Heuh...yes, that's' the idea) She is also concerned about the proposed "extensive powers for the lay-dominated board" . She had been given reassurances by the clan's big chief, Lord Falconer, " that it was intended to be light-touch regulation but instead we have Model A (the most heavy) by the backdoor" Reading this means that I am not holding my breath as I fear that we are going to end-up with a re-sprayed version of the existing system. Fair minded, reasonable visitor to the site, the above summarises my reasons for saying that crooked landords and their equally crooked aides exist not only because the system allows them to exist, it actually ACTIVELY HELPS THEM TO EXIST. (31) Does the residential leasehold sector use a 'monopoly type' game for training purposes?After spending over 2,500 hours of my life over the last 17 months to develop the contents of the site, as this is my last section, and my last line, I will finish on a light hearted note... ...maybe the English residential leasehold sector has a monopoly type game for training purposes...
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