ELDERLY homeowners are seeking compensation [..]; Elderly residents claim building fund was mismanaged.
ELDERLY homeowners are seeking compensation of up to pounds 500,000 claiming "gross mismanagement" of the retirement flats where they live.
Residents at the block of flats in Jesmond, Newcastle, say mismanagement of the sinking fund for the building has left it deep in the red.
Since the flats came on the market in 1986, owners, when selling, have paid one per cent of the resale value of their property into the sinking fund to pay for future repairs.
But the fund was left in deficit, forcing Managing Agents Anchor Trust to increase the sinking fund contribution for new buyers to 10% of sale pr1ice in 2005.
Thirteen out of 32 one and twobedroom flats at Russell Court on Adderstone Crescent now stand empty - with buyers seemingly put off by the huge increase in contribution to the sinking fund.
Adderstone Crescent is one of the most exclusive streets in the North East, with many properties worth up to pounds 1m. But flats at Russell Court are on sale for as little as pounds 75,000.
Residents claim the sinking fund is short of pounds 232,000 because of mistakes in Anchor Trust's management.
Furthermore, they claim botched building work has potentially left the building structurally unsound - and say repair work should not be paid for using the sinking fund.
Repair work costing pounds 15,000 was carried out in 2005 to an oriel window where a main support girder had been missed out.
Builders inspected three other windows at the time and found the vital girder was also missing.
If all the girders have been missed, the repair work for the 18 windows would run to pounds 270,000 - which residents say Anchor Trust should be responsible for.
The five-year battle came before a Leasehold Valuation Tribunal at North Shields County Court.
The 21 residents, all aged in their 70s and 80s, had hoped the matter could be resolved.
But on the day the tribunal was due to start, Anchor Trust, who requested the hearing, withdrew their application, saying they wished to mediate with residents.
Chartered surveyor Andrew Bell was hired by executors of a former resident, who has passed away, to represent her case. He is now set to take on the case for all the residents.
He said: "The residents are very upset and they haven't been treated very well at all. It is very frustrating for them that this is still not resolved after five years."
Due to the ongoing legal battle, residents said they did not wish to be named.
But one 81-year-old resident branded Anchor's management of the flats a "disgrace."
He said: "This has been going on for years and we have complained and tried to mediate with Anchor Trust.
"We finally thought we might get somewhere, but at the very last minute they let us down again.
"Some of us had travelled to the court - they didn't even have the decency to tell us they were withdrawing their application. "This compensation isn't for us personally - it is for the sinking fund which should have a lot more money in it."
An 81-year-old woman who lives in one of the flats said: "Some of us may be fit and well now, but we don't know what the future holds.
"Some people may want to sell their flat and move into a nursing home. At this time of life, it is unnecessary stress and concern. I don't feel in control of my own affairs."
Residents have lodged a complaint with the Housing Ombudsman Service, who will look into the dispute. Anchor yesterday apologised to residents for the matter not being resolved and said they would be arranging meetings with them in the new year.
An Anchor spokesperson said: "We recognise that the terms of the lease remain unclear and we are extremely sorry that we have been unable to clarify the position for residents more quickly.
"We are doing everything we can to clarify the detail of the lease, which we became responsible for when we were appointed as managing agents.
"The legal advice we have received remains unclear, which is why we were forced to withdraw our application at the leasehold valuation tribunal.
" We will be arranging meetings to discuss the issues with residents in the new year."
DISPUTE Ru s s e l l Court onAd d e r s t in Jesmond