The Benyon Estate, owned by Tory MP Richard Benyon and his brother Edward, announced yesterday that it would ‘reluctantly’ sell its ten per cent share to majority owner Westbrook Partners and step down as the estate’s managers as their involvement in the estate was ‘not welcome’.
The Benyons and US property speculators Westbrook bought the estate in April before announcing rents would treble to market rates to pay for essential work effectively forcing 90 low-income households from their homes. One tenant has lived there for 70 years.
Brave property manager required
The unexpected move means Westbrook, who will be sole owners of the estate, will need to find a new property management team prepared to deal with a hostile campaign by residents demanding longterm tenancies on social rents or a new ethical owner.
Lindsey Garrett, who has lived on the estate for 22 years and helped run the campaign, said: “Who’s going to be brave enough to manage it? It’s certainly not going to be easy to get someone I wouldn’t have thought.”
She also warned Westbrook the campaign will now turn its attention to them. She said: “Our barrister is drawing up a letter on behalf of the residents to outline what we want [Westbrook] to do. If they’re not able to [offer longterm social rents], we’re going to say they need to sell [otherwise] we’re going to do exactly the same to them as we did to the Benyons.”
Ms Garrett said Hackney Council had originally attempted to buy the estate with a £15m bid, at which it was valued, in March, but was outbid by Westbrook, “so there’s no reason why it can’t be offered back to them. For a company the size of Westbrook to lose £2m or £3m is nothing”. The Council was unavailable for comment at the time of writing.
Westbrook bought the estate from a family that had owned it since it was built in 1935 and kept the rents at social rates, however, it was marketed as having ‘extensive refurbishment/extension and redevelopment opportunities’ with ‘considerable scope for increase in rental income’ and ‘scope for an additional floor’. Essentially, making it clear there was a lot more money to be made than the annual £750,000 the estate was bringing in.
Same story different country
Despite usually investing in commercial property, it is not the first time Westbrook has bought residential property aimed at low-income families in the hope of turning a profit. Nor the first time it has faced a well organised campaign by residents fighting to stay in their homes.
Ironically as the sale of the New Era Estate went through in April Westbrook was being lambasted for its stewardship of 44 buildings aimed at low-income families it co-owns in New York. Following a campaign by tenants the Attorney General ordered Westbrook, along with its partners, to carry out thousands of repairs that had been delayed, pay tenants a $1m for charging illegal fees and fire the property management company it had employed.
Westbrook bought the portfolio, known as the Three Borough Pool due to the buildings’ Brooklyn, Bronx and Manhattan locations, with three other investors for $133m in 2007 shortly before the financial crash in the hope it could increase revenues and make a profit.
However, the only way to do that was to increase rents or cut down on maintenance.
As the properties were largely rent-regulated tenants must move out before rents can be significantly increased. However, unlike in England, they are entitled to tenancy renewals by law and cannot be evicted without good reason, so maintenance was seemingly cut.
Kerri White, a director at non-profit Urban Homesteading Assistance Board, told the NY Daily News earlier this year: “The underwriting for this . . mortage was based on the predatory idea that the owners would be able to increase building revenue by raising rents and spending less on maintenance.”
Westbrook and its partners defaulted on its loans in 2012 before refinancing the following year.
The former management company, Colonial Management, was also investigated for intimidation tactics after tenants began to organise. There was no suggestion Westbrook was involved, or knew about this.
Benjamin Warren, a tenant leader who has lived in a Westbrook property in Bronx for 35-years, said: “Over the years I’ve seen landlords come and go and I’ve seen managers come and go. But our current managers and owners are the worst.
“Their policy is mainly to get rid of tenants to increase the rent. They’ve been doing this by intimidation practices [and] five-day [eviction] notices – if you’re late by a week or month with your rent.”
And just as the residents of the New Era Estate are asking, he said: “I would like to see these landlords sell the buildings to someone who cares, someone who can keep them affordable.”
New Era buzzing
As news of the Benyon’s withdrawal hit the New Era Estate yesterday a meeting was quickly arranged. “We’ve never had so many residents at a meeting,” Ms Garrett said. “The atmosphere on the estate was buzzing tonight. We had people who’ve never been to meetings before because they actually think we’ve got a possibility of doing this.”
“I’m aware of what they did in New York. Westbrook have already been through [a fight with residents] once, so they’re going to be cautious. I don’t know if they will offer us long-term rents, but I think we can force their hands to sell.”
When contacted, a spokesperson for Westbrook said they were unavailable for comment.