HOW WE CAME ABOUT – AN ESSENTIAL POTTED HISTORY.

Hayes Point Collective Freehold Ltd was founded in 2017 by a group of Leaseholders who had also supported HPRTM previously taking over the management of the site. The RTM was appointed back in 2014 at a time when Galliard’s Managing Agent, TMS, were responsible for the site and failing miserably. Imagine the scene: our grounds were a disgrace, with grass knee high; several lifts were out of order, meaning disabled residents were forced to struggle up and down stairs, Swimming pool was closed, no building maintenance was undertaken! The day the RTM took over management of the site, lifts were repaired, for a cost of just £50! A maintenance schedule was initiated, and a programme of repair work begun. Our Service charge was cut by 20% while providing much improved services. Soon after, the freehold was sold at auction to a Greek Cypriot company, Surelane, who thought they would be able to build apartments on the grounds. When they realised, they couldn’t, they sold HP onto our current freeholder, Avon.

 

Within weeks, Avon, our current freeholder challenged the RTM, claiming it was illegal on the grounds that an RTM cannot manage more than one building. They insisted that HP was multiple buildings, and tried to impose their own Management Company, Y&Y (a company named and shamed in Parliament by Sir Peter Bottomley as “unfit to manage anything”). Leaseholders received letters threatening that if they didn’t immediately pay their Service Charge to Y&Y, even though they were not providing any services, they would face litigation.

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It was a frightening and distressing time for all of us. Did we give in? No! Leaseholders rallied together, determined not to be bullied or lose the RTM. The only fly in the ointment was a small handful of leaseholders who opposed the RTM and tried to obstruct us at every turn. We raised finance to fight the legal case and paid, with Avon, for a survey of HP. The survey concluded that, although it was 3 separate buildings above ground, all essential services: water, electricity and sewage were intrinsically connected to every part of the buildings below ground and that it would be impossible for it to be managed other than as one cohesive site. In 2017 the expensive Court case ended with a compromise agreement for HPRTM to manage HP as one entity. This three-year agency agreement has been extended twice.

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WHY HP COLLECTIVE FREEHOLD WAS FORMED - WHAT WE DID....

Leaseholders were determined never to face such challenges again. We wanted peace of mind and security going forward. To this end, during the conflict with Avon, HPRTM initiated a separate company to resolve the issue by collectively buying the Freehold. Leaseholders were written to and invited to meetings to explain the idea. Hayes Point Collective Freehold Ltd was formed with overwhelming support from a majority of leaseholders.

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Funds were needed if we were to collectively purchase our freehold because the law, as it then stood, meant that it would be difficult and expensive. Many leaseholders pledged 20 x their ground rent towards a purchase fund. Those who contribute to the collective purchase fund, will have their GR reduced to a nominal £1 per annum once the collective purchase has been completed. Those who do not contribute will continue to pay as they do now. and within months we had raised almost £300,000! Others pledged to contribute as and when the time came to purchase. We met with the freeholder, informing him that we wished to purchase HP. Initially, he said he wanted a million pounds for it, but later invited us to discuss a purchase saying he would accept £800,000. It was still too much so we decided to wait. At the time, we anticipated it might take a year or so to purchase the freehold, so we also explored the possibility of raising a loan to meet any shortfall in the cost.

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Everything changed when, in December 2017, the Government charged the Law Commission to conduct a nationwide consultation on Freehold and Leasehold Reform. Part of the Government’s aim was to enable leaseholders to purchase their freeholds more cheaply and easily. Members agreed we should focus on lobbying for new legislation that would reduce the purchase cost before proceeding. We immediately got involved and contributed written evidence and proposals. We attended many meetings with the LC, both in London and Wales. We lobbied the UK Government and the Welsh Government, had numerous meetings with Stephen Doughty. MP, Vaughan Gething, MS, the then Welsh Minister for Housing, Rebecca Evans, MS. We made submissions to the Welsh Government’s ‘Task & Finish’ group. We held meetings with the subsequent Minister, Julie James, MS, and collaborated with other national leasehold campaign groups and national Steering Committees. We also attended local and national leaseholder conferences. Meanwhile, we held frequent meetings with Hayes Point leaseholders, at the Old School Hall, Sully, and kept them additionally informed by regular newsletters.

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In our consultations with the LC, we discussed the need for a more democratic legal structure for the eventual enfranchisement company post purchase. We said that the existing RTM legal structure was unfit for purpose (because it was fundamentally undemocratic). We therefore proposed a democratic co-operative legal structure as an alternative and collaborated with the Welsh Co-op Centre and the National Confederation of Housing Co-operatives to design a specific leaseholder co-op. The Law Commission noted this structure in their final report and suggested that it might be put forward as an option. We set up meetings and sent mailings in which we presented our Co-operative Model structure to our collective freehold membership, who approved it. However, it was agreed that the cost of registering said model, was unwarranted until we know for certain that it is included as an option in the final Bill. The LC consultation on leasehold reform ended in October 2018, and it was anticipated that the recommendations would be approved by Government and become law, with huge cross-party support, within a year or so. Sadly, due to the 2019 election, a government focussed on Brexit, and the 2020 onslaught of a Covid pandemic, progress was delayed.

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Our work didn’t stop, it continued post lockdown, as described above. We lobbied and attended meetings at national and local Government level and continued informing our own members, regularly updating them on progress. We never imagined it would take seven long years to see the Leasehold and Freehold Reform Act finally pass into Law in 2024.

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BENEFITS OF COLLECTIVELY BUYING OUR FREEHOLD.

•  Peace of mind and security in knowing that an external freeholder can never again put us through the uncertainty and disruption of forcing their own MA on us, or, possibly sell HP onto an offshore investor who might try to do the same.

•  Confidence that an external freeholder cannot profit from us through extortionate “permissions” and other “charges”.

•  Control of our site and our homes through our own democratically appointed Management Co-op who have ONLY our interests at heart.

•  Freedom to make decisions about what we want for Hayes Point in the future, for example we may collectively decide to explore the possibility of:

    -  EV charging points? 

    -  Solar panels?

These are examples only. Clearly, such choices come at a cost and may require planning permission. It would probably be necessary to seek grant funding to help pay for such things. However, at least we would not have the additional costs of paying a freeholder extortionate charges just for ‘permission’.

•  For potential purchasers of homes on site, there may be some additional appeal in owning ‘a share of the freehold’ attached to the site. (There is evidence that the bottom is falling out of the leasehold property market, nationally, due to numerous scandals).

•  The ‘freehold share’ would be attached to the property not held by the individual. Leases will need to be amended to clarify this. When the property is sold the ‘share’ is sold with it. The reason for this is to prevent people who have sold and moved away from having any external influence over HP.

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THE DOWNSIDE - IS THERE ONE?

Clearly, change and improvement comes at a cost. As we have already said, it would be necessary to seek grant funding to make any big changes agreed by the membership. However, we believe that these are not insurmountable problems and could improve the quality of life for HP residents, as well as having the bonus of potentially raising the value of property at HP, which seems to have stagnated of late.

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Concerns have been raised about a possible “increased liability risk” for things like: ‘a foreshore collapse’ or ‘building maintenance issue’. There is an abundance of evidence that freeholders pass all unsupported liability costs directly onto leaseholders . The exception relates to post Grenfell cladding and fire- safety issues, which required specific legislation, introduced by Government, to force a shared responsibility in specific circumstances! Whether we like it or not, as leaseholders, we would be expected to foot the cost of any uninsured liability. Clearly, once we collectively own the freehold, we would continue to be liable for any unforeseen liability risks. It will therefore be incumbent on the new Co-op Management Company to ensure an adequate sinking fund or contingencies fund is maintained.

 

OUR AIMS GOING FOWARD

Once definitive information about the new law is made available to us, we will take the following steps:-

Organise meetings (including online meetings) of all members to clarify the details of what will be involved in collectively purchasing our freehold,      including:-

   1) The cost of purchase calculations

   2) Anticipated legal costs: for the purchase agreement and tribunal costs together with ensuring all required steps are taken, including advice on        liabilities etc.

   3) Funds required and ways of raising further funds, if required.

   4) Assuming the Co-op model legal structure is permitted under the new law, we will provide clarification to members on how it will work and will seek approval from members for Registration of the new Co-op legal structure.

   5) Reaffirm that the ‘freehold share’ remains with the property not individuals.

   6) Contact and inform all other leaseholders of HP and encourage them to support and join the collective purchase.•Draw up and publish a clear timetable for the collective purchase process.

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   •The membership elected our original board to pursue and negotiate the collective purchase of the freehold on their behalf, for as long as it took. It has  taken longer than any of us expected, due to unforeseen circumstances. We have already outlined the vast amount of work we have undertaken over several years in getting us this far. From this level of input, we have gained an in-depth knowledge of the legislative intricacies of the Law, and we hope that members will trust us to finalise the process. Once the purchase is completed, our work is done! Members should then elect a new Co-op Board to manage Hayes Point going forward. We envisage this will be achieved by merging with the RTM.