… and Y and Y Management ‘broke the ARHM code’ (except it is actually a member of ARMA)
London-based freeholder Israel Moskovitz and his business partner Joseph Gurvits, of Y and Y Management, must rue the day they snapped up at auction the freeholds of retirement sites in Devon.
After a two-year legal marathon – which saw Moskovitz trying (and failing) to interest the Court of Appeal – Regent Court at last takes up its right to manage this month.
Elim Court is not far behind, taking its right to manage application to the Upper Tribunal.
Now residents are mobilising to achieve the same result at Milton House in Newton Abbot, where several residents have contacted Campaign against retirement leasehold exploitation over various frustrations.
At Regent Court, residents are furious at having had to pay £140,000 for a new roof that was damaged in storms in April 2012. Legal action is underway challenging why the roof was not covered by the insurance policy.
While these are collective actions, three residents at Elim Court have won a battle slicing nearly £3,000 off the service charges.
The case is a damning indictment of Y and Y Management, headed by Mr Gurvits, which was found not to have complied with the ARHM code (the Association of Retirement Housing Managers).
In fact, Y and Y Management is not a member of that organisation, but it is a member of ARMA (the Association of Residential Managing Agents), which deals with the non-retirement sector.
A complaint by a London leaseholder against Y and Y Management is currently under consideration by ARMA.
In January last year, Mr Gurvits was named in the Commons by Sir Peter Bottomley; in December he did the same to Israel Moskovitz.
The First Tier Tribunal case was brought by three residents of Elim Court – Alan Jarvis, Janet Inkster an Mrs M Cooksley – and took place in October.
But only this month have Moskovitz’s efforts to appeal the decision – refused by the First Tier Tribunal and refused by the Upper Tribunal – come to nothing. At the hearing he deployed a barrister, while the residents used a local solicitor.
The ruling is extremely critical of Y and Y Management, and its employee Elena Andreadis, who has now apparently left the company. Moskovitz’s freehold interests for the Plymouth sites are held by Avon Freeholds.
The tribunal ruled that Moskovitz, as freeholder, “had not demonstrated that all of the charges in question were reasonably incurred”.
It slashed the management fees by nearly £3,000, and referred to “issues of some concern”, “issues of poor service” and issues of disclosure”.
Management charges were reduced from £10,065 in August 2011 to £8,016, and from £9,120 in August 2012 to £8, 217.
“Ms Andreadis did not appear to know how the management fee had been calculated or, indeed, what it actually was and it was only by examining it in detail that a sum was identified per flat.”
“The tribunal asked Ms Andreadis if there was a written agreement between the landlord and Y and Y Management Limited, and although she said ‘yes’, she was unable to say what was in it or what it said and there was no copy of such a document in the papers submitted for the hearing.”
“In all of the circumstances, the Tribunal found the management fee not to be reasonable and payable by the tenants.”
“The Tribunal finds, in summary, a failure of the Respondent to show how it calculated its management charge or that it has complied with the ARHM code.”
There was further criticism of Ms Andreadis:
“It seemed inconceivable that it could take now 12 months to replace a light in a car park or to appreciate that the Applicants were asking for a copy of the insurance schedule and confuse that with an insurance certificate.
“Ms Andreadis appeared convinced that the replacement side door was a new door until the Tribunal pointed out that it had seen where previous fittings had been attached.”
The residents raised the issue of insurance, which is of
particular interest as residents at nearby Regent Court are fighting Mr Moskovitz over having to pay £140,000 for a new roof last year.
“Ms Andreadis indicated that because of the relationship between the landlord and the insurance company, the insurance company gave free cover for a sum in excess of the reinstatement value of the property.
“The Tribunal was concerned that the documents in relation to this issue were sparse and were heavily redacted. Whilst the Tribunal found it somewhat difficult to accept, there was nothing to contradict the Respondent’s evidence that the insurance company provided a form of extra free cover …”
There were other issues raised by the residentse: paying for recruitment firms for a new house manager and their travel expenses.
“The tribunal also records that it was not impressed by the suggestion by Ms Andeadis that the tenant of this property should pay a prospective employee’s travel for personal reasons to Newton Abbot prior to attendance at an interview in London.”
But the residents could not prove that the office telephone had been used for personal calls: “in the absence of any actual evidence of misuse, the charges are reasonable”, said the tribunal.
It refused Mr Moskovitz’s application for costs.
Full ruling can be read here: CHI/OOHG/LIS/2013/0028