Peverel, the UK’s largest property management firm, which is responsible for the management of around 190,000 properties and retirement homes, has gone into administration. Zolfo Cooper LLP, a company specialising in corporate advisory and restructuring services have been appointed administrators.

The holding companies that owned Peverel failed to meet demands to pay their debts of around £125 million.

The administrators, said that the ‘operating companies’ (which include Peverel and employ around 4,000 staff) will not be affected by the collapse of the holding companies and will continue to trade as normal whilst a buyer for the Company is found. Zolfo Cooper have stated that no redundancies are planned. Services for residents, tenants and landlords will continue as before.

The administrators have emphasized that the operating companies are profitable and that it is the debt incurred by the holding companies that had become unsustainable.

At the request of Peverel’s board of directors, Peverel had been in talks with its lender, the Bank of America for several months, negotiating the restructuring of their debts, before they went into administration.

In 2007 Vincent Tchenguiz added Peverel to his portfolio when he bought the company from the U. S. Company ‘Holiday Retirement Corporation’ using a £500m loan from Meril Lynch (now part of the Bank of America). Mr Tchenguiz’s property interests include the ownership of the freehold of and management of  around 500,000 properties.

Vincent Tchenguiz, together with his brother was amongst seven people arrested as part of fraud investigation into the collapse of Icelandic Bank Kaupthing, the day before the Bank of America called in its loan.

Other creditors include the Allied Irish Bank, Bayerische Landesbank, Citibank, Deutsche Bank, Lloyds Banking Group, Prudential, Royal Bank of Scotland and UBS.

Peverel also has a number of subsidiaries most notably Solitaire Property Management, Careline UK, and Pembertons Residential.

Peverel’s administration, will ultimately lead to the sale of the company and a new management regime. Although Zolfo Cooper are at pains to reassure tenants that there will be no change or disruption to the services provided to tenants, it is difficult to see how this can be guaranteed. This is an example of where tenants can be left with uncertainty as to how their building will be managed, for example, will matters such as service charge and the maintenance of the building remain the same? If there are necessary works of maintenance that are due – will these still go ahead? The demise of Peverel brings into focus the lack of control that tenants have over the maintenance of the building in which their flats are situated. If the building is not maintained regularly in accordance with the standard Leasehold codes of practice and is allowed to deteriorate, this may affect the future value of the tenant’s leasehold flats; yet the tenants generally do not have direct control over such maintenance. In light of this, tenants should consider taking more direct control of the management of their building by exercising their right to manage the building using the ‘Right to Manage’ provisions of the Leasehold Reform Act 2002. For more information on the ‘Right to Manage’ see our series of detailed articles covering the ‘Right to Manage’ in the articles within this website:

Leasehold - Right to Manage (‘RTM’) I- Requirements for a RTM

Leasehold - Right to Manage Part II - Setting Up A Right to Manage (‘RTM’) Company.

Leasehold – Right to Manage Part III -Making a Claim for RTM

Leasehold - ‘Right to Manage Part IV - Once  the Right to Manage (‘RTM’) is Acquired’

Leasehold – Right to Manage Part V- Summary of the Steps for Acquiring a ‘Right to Manage’ (RTM’).

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