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Following the tragedy of the Grenfell tower fire 14th of June 2017, there has been a focus on removing combustible cladding from the external walls of high-rise buildings. RICS launched the External Wall System (EWS) assessment process in December 2019. It required a competent professional to check whether a building had combustible materials, or other fire safety defects. If these materials were found, the EWS1 form indicated that remediation was required and, in nearly all cases, this meant the value of the flat was impacted and banks would be unwilling to provide mortgages. The Fire Safety Act 2021 subsequently commenced 16 May 2022. The relevant wall fire safety check is now conducted to the PAS 9980 standard. The inability of leaseholders to sell affected flats, and huge remediation-related service charges - required to make good the buildings - have caused the Building Safety Crisis.

Due to the nature of UK leasehold ownership, the landlords of leasehold developments were not previously required to contribute to these remediation costs. The Building Safety Act 2022 overturned this situation and introduced criteria by which landlords would become liable. How effective the Act will be in achieving real results for leaseholders remains to be seen. Schedule 8 states that landlords required to contribute are those with a group net worth at the qualifying time (14 February 2022) of more than £2,000,000.

An important question for many landlords is hence how the risks of remediation costs - which could run into hundreds of thousands (if not millions) per development - can be minimised?

Wallace Estates - a group of companies with registered address at Botanic House, Hills Road, Cambridge, England, CB2 1PH - are well known commercial landlords apparently implicated in the doubling ground rent scandal. MB2005 NO 1 Limited (company number 05491768), a group company, reportedly recently sold their superior leasehold interest in Islington Gates - a development on Birmingham's Fleet Street affected by the building safety crisis. The sale was apparently carried out following Right of First Refusal under the Landlord and Tenant Act 1987, but the inferior leaseholders in the development did not organise to acquire the superior leasehold interest themselves. The superior lease was reportedly bought by Islington Gates Birmingham (UK) Ltd (company number 14503783) of C/O BCS, Windsor House, Station Road, Great Shelford, Cambridge, CB22 5NE. This registered address is provided as a service by the accountants BCS Wilson Partners and is hence uninformative as to the actual location of the landlord.

Islington Gates Birmingham (UK) Ltd apparently has a value of less than £2,000,000. There is hence a question as to whether the sale was intended to divest Wallace Estates of responsibility for remediation costs. As, however, the sale of the superior lease reportedly occurred in November 2022, it remains to be seen whether the strategy will be effective as the relevant date of the Act is 14th February 2022. A further interesting question is whether Wallace Estates have indeed actually lost control of, and future income from, their asset.

Islington Gates Birmingham (UK) Ltd has two directors, the South African Owen Van Rooyen, resident in South Africa, and the American John Ted Patrick, resident in the US. Neither, however, is a Person with Significant Control, and it is hence necessary to inspect the shareholding details. The company has 1 share, valued at £1, held by Islington Gates Birmingham Ltd of 30 N Gould St, Ste R Sheridan, Wyoming, United States, 82801. This address is, again, provided as a service by an agent Registered Agents Inc. - who have had multiple difficulties with their clients. The address is, unfortunately, again not informative as to the real nature of the landlord.

Companies are registered in Wyoming for tax and privacy purposes. It can hence be very difficult to determine the true owners. Nevertheless, the initial filing shows that Owen Van Rooyen, director of Islington Gates Birmingham (UK) Ltd, signed the incorporation papers using the email address accounts@flambouriari.com. The web domain flambouriari.com does not host a website. DNS searches show, however, that it was registered in May 2018. Coincidentally, the Gibraltar company Flambouriari Limited (Company Number 114420) was registered in August 2018.

Does any UK company with links to Flambouriari Limited (Gibraltar) also employ BCS Wilson Partners in the UK for their registered address? Interestingly Poli Mapa Properties Limited (company Number 14250294) also use BCS. The sole director is Philip George Haretos - an American resident in Greece - and the Relevant Legal Entity is Flambouriari Limited of 57/63, Line Wall Road, Gibraltar, GX11 1AA - owning 1000 shares of £1 each in Poli Mapa Properties Limited.

Philip George Haretos is also a director of Infusive MD Limited (company Number 10667316) of the same address as Wallace Estates Limited - Botanic House, Hills Road, Cambridge, England, CB2 1PH. He was a previous director (resigned 30 June 2022) of Infusive PLC (company number 09433742) of the same address. Infusive PLC shared a director - Luca Rinaldo Contardo Padulli (resigned 13 December 2016) with Albanwise Wallace Estates Limited (company Number 11855100) of Botanic House, Cambridge. For those who don't know, Count Luca Padulli is the Person with Significant Control of Albanwise Wallace Estates Limited, which is in turn the Person with Significant Control of Wallace Partnership Group Limited (company Number 07780646).

Have Wallace Estates employed a strategy that will minimise remediation costs, whilst maintaining income from their freehold assets, by divesting to associated companies (however distant that association may be)? Time will tell...

It should be noted that all of the information provided above is a matter of public record and is freely available. It is also important to stress that this article does not provide or allege any evidence of legal wrong-doing and presents suggestive arguments based on the available facts rather than any definitive conclusions. Due to Wymoing privacy restrictions, it would be difficult to prove that Flambouriari Limited (Gibraltar) is indeed the company with a controlling interest in the US company Islington Gates Birmingham Ltd - which in turn controls Islington Gates Birmingham (UK) Ltd.

We have published this article because the legal strategy employed does not appear to uniquely affect the Islington Gates development. Owen Van Rooyen and John Ted Patrick are directors of multiple similar companies, seemingly with equivalent Wyoming-registered parent companies incorporated using the email address accounts@flambouriari.com. A non-exhaustive list is provided below, in the hope that this may help other leaseholders identify their own new landlords.

• 33 Simpson Street Manchester (UK) Ltd (company number 14504484)
• Argyle And Henry Street Liverpool (UK) Ltd (company number 14504137)
• Brindley House Birmingham (UK) Ltd (company number 14503808)
• Carters Yard (UK) Ltd (company number 14511959)
• Crown Wharf London (UK) Ltd (company number 14502459)
• French Quarter Southampton (UK) Ltd (company number 14506225)
• Kleine Wharf London (UK) Ltd (company number 14504480)
• Meath Crescent London (UK) Ltd (company number 14503393)
• Morello Quarter Basildon (UK) Ltd (company number 14504235)
• Mosaic Slough (UK) Ltd (company number 14503885)
• Omega 4 London (UK) Ltd (company number 14501351)
• Quebec Building Manchester (UK) Ltd (company number 14503962)
• Red Building Manchester (UK) Ltd (company number 14504081)
• Sky Chambers Manchester (UK) Ltd (company number 14504550)
• Sports City Manchester (UK) Ltd (company number 14503477)
• Zenith Manchester (UK) Ltd (company number 14503878)

The Building Safety Act 2022, whilst a useful step forward, will clearly require testing in the Tribunal and Courts to determine its practical limitations. Until that time, fire-safety defects will continue to significantly affect leasehold flat and freehold values.

It is also apparent that transparency of UK property ownership - despite the register of overseas entities introduced 1 August 2022 - remains severely lacking.

UPDATE 28 FEBRUARY 2024: A leaseholder in one of the affected blocks detailed above has, by copying in accounts@flambouriari.com with regards to service charge issues, reportedly received a direct response from Philip Haretos via an email address ending @flambouriari.com. This would support the supposition that Philip Haretos, via Flambouriari Limited (Gibraltar), is indeed the actual new freeholder of the above blocks, with a controlling interest.