The owners of the Cherry Orchard in Port Erin have over charged leaseholders by over £90,000 in excess charges, a rent and rates tribunal has ruled.
They were also told to stop making threats to leaseholders.
This is the second time leaseholders have turned to a tribunal for help.
The first time was in 2012, when the tribunal sided with them and in 2014 ordered Robert Gillings – the majority shareholder in the Cherry Orchard Management company (COM) by virtue of his hotel company, Cherry Orchard Apartments (COA) – to repay residents in flats in the complex excess charges.
However there were no repayments, prompting this second tribunal.
Overall service charges rose by over three times between 2000 and 2014. Between 2003 and 2013 heat and hot water costs rose by over 350 per cent. General energy inflation was 150 per cent.
Administration costs were raised 15-fold from 2000 to 2011.
Winnie Orrit, who owns a flat, said she and other residents want a ‘fair deal’.
While charges have rocketed, she said maintenance in areas as basic as cleaning the gutters had been minimal.
Also, because the complex leaseholders are known to be in dispute with the management, the value of flats has fallen. She said:.’Because we are in dispute, nobody will take it on. I paid £127,000 (in 2003) the one above was sold for £75,000.’
Leaseholder Graham Jones said: ‘Ian Gillings has also in recent months been involved with purchasing a number of apartments for figures similar to or less than they were sold for in 1998/2000. Had the management company affairs been properly managed it would have been anticipated these apartments would be worth at least double their original selling price.’
Mrs Orrit said if her family inherited it, it would be a ‘burden’ as they would have to continue paying the fees even if it’s unoccupied and unheated.
Mr Jones said Monday’s tribunal went ‘fairly well’. He added: ‘There was a recognition the leaseholders are owed a substantial amount of money, they said it is unfortunate if they continue to make legal threats against people.
‘Clearly the place has been thoroughly mismanaged, we have an agreement and processes and want that followed through.’
‘The chairman John Wright told them to agree to the refunds, he does not seem to contest the figures I provided at the tribunal.’
‘Ian Gillings was very clearly told that he could not continue to represent and manage the management company whilst not being a director. The company is required by law to have two directors and this must be resolved. Why has he so far refused to become a director?
‘They were told to resolve the overpayment calculations over the next month. That does not mean they will necessarily repay the leaseholders but should stop them making threats as we can credit the money to our accounts. It may be that new issues are looked at by the current tribunal or a new one.’
He added: ‘Both sides signed a legal agreement to be bound by an independent surveyor’s report. The Gillings brothers are now trying to get out of this undertaking by refusing to implement all parts of the report.
‘The ridiculous thing is that if they follow through this process their 30 or so apartments in the complex would be worth far more due to sensible and transparent service charges. Why on earth are they trying to stop this?’
Robert and Ian Gillings were not available to comment on the story, printed in the Examiner last week.
The COM emailed Mr Jones they are ‘disappointed to see a page of one of the local newspapers cover a story about our problems at Cherry Orchard. As you may imagine this has deeply angered the hotel’s staff.
‘The manager has held a meeting with the staff to try to defuse the situation, but this action has created a tinder-box like scenario.
‘During the year we have tried our best to improve relations between staff and leaseholders with some success, but we anticipate that this action will undo much of what we have achieved.
‘It is imperative that your supporters do their part to put the genie back in the bottle.
‘The island is a small place with long memories.
‘My project to turn the hotel into apartments has been made more difficult by this action.
‘This will of course have to be reflected in my offer.’
Mr Jones said he is unsure about what offer is referred to and added: ‘Our relationship with the hotel staff is excellent and will remain so.’