ITV are currently producing the next series of the hugely popular Homes from Hell programme. We were recently contacted by the Homes from Hell team about our grim experiences with the bully boys at Berkeley Homes. We know that many of you have a Homes from Hell story to tell about Berkeley Homes. If you would like to appear on the next series of Homes from Hell, please get in touch with admin@berkeleyhomescollective.com and we will put you in touch with the production team.

Its a tough one.

We can’t tell you what to do and we would urge you to ensure you have a good solicitor / conveyancer and take professional advice before making such an important decision. The fact you have found this web site, means you must have doubts about Berkeley Homes in your mind and started “googling” for information. Read our story carefully and consider Berkeley Homes’ conduct towards us and other buyers (use Google to find out how Berkeley Group generally treats the public, local authorities and so on – there is plently of information out there).

Our advice would be to think very carefully before signing on the line, especially if you are planning to buy with a mortgage. Valuations are still a big issue and have a nasty habit of being downgraded at the last minute or being “reassessed”. Mortgages are not guaranteed until the money has been transferred on completion day – your bank can change its mind anytime up to the day you get the keys – what would happen if your mortgage didn’t materialise or the bank dropped the LTV ratio at the last minute?

Ask Berkeley Group how they would help you in that situation? Will they screw you with the contract if your mortgage falls through or the bank changes the terms? Don’t believe the salesman – get any “promises” in writing as they might be quickly forgotten if you have mortgage issues on completion day.

If Berkeley Homes tells you they’ve had valuations done, ask to see them and demand copies. You might need them in future. Of course, you should always get your own independent surveyor (or you bank’s) to conduct a valuation and don’t sign a thing until you’ve received the report. Take Berkeley’s “valuations” with a pinch of salt. In fact, take all of their sales patter with a large pinch of salt.

If you have to think twice or you have any doubts, walk away. Don’t let them use the £1000-2000 “reservation deposit” to pressurise you into exchanging contracts (this is the point of no return). If you have doubts, valuation or mortgage concerns, walk away. We all wish we’d walked away.

And finally, perhaps consider a nice solid Victorian property down the road….built to last, no noise problems, no horrendous service charges and much more likely to hold its value

Since the group began in 2008 we have provided support, guidance and a collective front against Berkeley Homes who were intent on bullying individuals with their high-pressure sales and closure techniques and subsequent heavy-handed threats to those who could not complete on the original terms. Berkeley didn’t expect to deal with a highly organised group of buyers and we were able push back on Berkeley’s demands.

The group was called the “Berkeley Homes Collective” because we are a group of people with common experiences and all with similar problems with Berkeley Group. The group has a flat structure with no appointed leaders – it is a collective of individual people with a common goal.

We campaigned outside their marketing suites, gatecrashed their 2009 AGM and were featured in dozens of national press articles, TV programmes and radio shows. At the same time, we noticed that Berkeley went through 3 PR companies and it was obvious that they were ill-prepared to deal with a customer revolt. The writing was on the wall and they should have seen it coming – we gave them plently of warning that we were all facing problems with mortgages and completion funding since early 2008 – still it made our campaign a lot easier dealing with a disorganised bunch of old suits.

Most of the Caspian buyers have resolved their disputes in various ways. Berkeley’s love of secrecy means most people will not speak about what happened to them in the end, therefore we are reliant on the public record to find out what happened with the cases filed at the High Court. According to the public record, none of the cases filed by Berkeley at the High Court in London in relation to Caspian Wharf actually made it to trial. If you know differently, please let us know and we will update the blog. We believe that all of the cases in relation to Berkeley’s London developments were filed at the High Court, but there may be isolated cases outside London at local County Courts – if you have information you would like to share, please email admin@berkeleyhomescollective.com

Buyers at the Royal Arsenal development are still being held in limbo nearly 2 years after their contracts were rescinded and initial legal threats issued. Berkeley sent out pre-action protocol letters in July 2009 (the step before actually initiating legal action at the High Court) and then abruptly stopped. These buyers have lost their deposits, lost their flats but are not released from their contracts, even now (May 2011).

Berkeley could come looking to sue them sometime up to 6 years after the rescission date. Quite why Berkeley has decided to leave all of these people in limbo, no-one really knows, but its perhaps due to the PR disaster and complete failure of their attempts to drag the Caspian buyers through the courts. Berkeley got no-where and racked up huge legal bills as well as generating a load of bad PR in the process. No point in suing people for damages if they don’t have any money – that’s the first rule of litigation! Nonetheless, we’d ask BH to do the right thing and bring closure to the Royal Arsenal cases and let people get on with their lives. Surely, you are not going to keep them hanging on for the next 4 or so years?

Trading Standards investigate Berkeley Homes for Mis-selling

The experience of many of us in the Berkeley Homes Collective is that we were mugged by slick sales staff at the point of sale. Berkeley’s sales and marketing operation was even slicker than the infamous timeshare touts on the Costas employing the very same high-pressure sales techniques, recommending customers use Berkeley’s preferred solicitors, presenting purchasers with lists of valuations supposedly carried out by Countrywide, Colleys and the other major surverying firms which miraculously matched the sales list and the oldest trick in the book – list of “sold” plots prominently on display in the sales office.

One purchaser told the BHC, “I could see all the plots in the release were marked as sold. Even the plot I was negotiating on was on the board as sold. I was repeatedly told the units were selling fast and I had to sign today..”.

Dozens of individuals have told the BHC that they were victims of Berkeley’s slick sales operation and allege that mis-selling took place.

An anoynymous purchaser told the BHC today, “I never imagined I’d fall victim to this sort of scam in the UK. You expect it from the timeshare touts in Spain, but on reflection they used exactly the same techniques on me at Caspian Wharf and there is no protection against this sort of thing. Berkeley are now manipulating the law and using the High Court to scare me into settling out of court so they can extract more money from me, otherwise they’ll bankrupt me if I don’t comply.”

Our sources advise us that only one case has gone to court so far related to City Quarter and the judge decided to “reserve his judgement”. We are awaiting further news.

A spokesperson for the BHC said, “Berkeley are using the High Court as the ultimate negotiation tool. Pay up or we’ll bankrupt you is their message. They’ve been particularly vociferous with their threats towards individuals whose careers depend on avoiding bankruptcy or a judgement on their credit file as they know they can put maximum pressure on these individuals to find as much money as they can from family, credit cards or loans and either complete or settle out of court.”

During a heated discussion, Mr Vallone was asked why Berkeley refuses to consider any of 13 commercially sensible solutions put to the company by the Berkeley Homes Collective.

It was also highlighted to Mr Vallone that a number of his competitors were working with their buyers to reach a fair and amicable solution and to help people complete on their new homes. In particular Mr Vallone’s attention was drawn to a recent Mail on Sunday article where a spokesperson for arch rival, Barratt Homes confirmed that where genuine owner-occupiers were now in difficulty due to the issues with mortgages and valuations, Barratt were routinely refunding deposits and cancelling contracts.

“Barratt says it routinely refunds deposits to genuine owner-occupier buyers in difficulty, and adds: ‘It is simply not a good idea to threaten our future customers.’ ” Mail on Sunday 14th September 2009.

Still, no-one from Berkeley wants to answer that question.

Berkeley have offered no explanation, no solutions and no compromise.

Paul Vallone, Berkeley Homes director, told us he thought the flats were still worth every penny and he’d borrow the shortfall from his granny if he had to because he firmly beleived that a contract was a contract and should be honoured.

Sorry, Mr Vallone, for those of us looking at £100,000 shortfalls due to the crash in valuations at Caspian Wharf and Royal Arsenal Riverside, my granny’s pension isn’t going to fill the hole.

Berkelely are still showing a lack of understanding of what has happened to their market in the last 18 months. Mr Pidgley’s letters from 2008 and throughout 2009 clearly show the company as a whole are in denial about the crisis facing the new build sector, but are also clearly dillusional about their customer’s finances.

Its not the first time a Berkeley staffer has told us that you just can’t compare Berkeley to “the likes of Barratt or Persimmon”. They are clearly deluded in thinking that Berkeley customers are all cash-rich and don’t need a mortgage. Indeed, all of our reservation forms clearly state how we intended to finance our purchasers and in virtually all of those cases it was with a mortgage.

The meeting lasted just over 1 hour.

At the beginning of the meeting Berkeley’s favourite phrase was muttered by all in the Berkeley camp:

“Off the record” (Clearly uncomfortable with having to face reality and talk to their customers, everyone who meets Berkeley hears the same phrase, “this is off the record”).

There were a few new faces and a couple of old ones we already knew, including Directors: Justin Tibaldi and Paul Vallone who are responsible for Caspian Wharf, E3 and Royal Arsenal Riverside, SE18 respectively.

Justin Tibaldi didn’t have much to say and just stood there uncomfortably looking at the floor.

Paul Vallone was his usual arrogant self and gave us the same tired old lecture -

- a contract is a contract

(What about your Section 106 agreements to build Royal Arsenal’s Crossrail station? Why are you trying to bail out of that one if a contract is a contract?)

- they were not suing anybody and are not going to bankrupt anyone (FALSE – see below)

- the reason they won’t negotiate is because buyers haven’t given them “full financial disclosure” (FALSE – see below)

We did point out that:

1. Berkeley won’t define what full financial disclosure is

2. Berkeley won’t tell us what they want the information for and if they’ll propose a solution once they have this information. It looks to us like a fishing exercise to see who is worth taking to the cleaners.

3. Numerous buyers have offered full disclosure and in lieu of any detailed request from Berkeley, have proactively offered sight of mortgage statements, pay slips etc. to prove they can still get a mortgage, but can’t complete at the original purchase price due to the collapse in valuations.

The result is the same “Go away and find the money, otherwise we’ll go legal”

Its a pointless exercise with no benefit for the buyer. Purely an intrusive and humiliating exercise to help Berkeley assess how much they can extract from each individual who can’t complete.

4. Mr Tibaldi was forced to confirm that several buyers have given full financial disclosure and that they had still nonetheless been sent pre-action protocol letters (the step before full High Court claims are issued). While looking at the floor, he confirmed to Mr Vallone that it had “gone legal”. Oooops. Mr Vallone clearly didn’t have a clue what the other half was doing.

Glad to see Berkeley’s Directors communicate with one another just as well as they communicate with their customers.

The group was asked to wait in the reception area of the hotel before Chairman, Victoria Mitchell invited us to join other delegates for coffee before the meeting.

Mrs Mitchell was very polite and cordial to the group (unlike other members of the board), although she did mention that they’d heard we were coming…..

Well that’ll explain the 6 big bouncers who were manning the doors.

However, all credit to them, the bouncers were also very polite and very helpful to the group. We took the liberty of leaving some flyers in the reception area of the Woodlands Park Hotel in Cobham so that other delegates, shareholders, investors and hotel guests could read the truth about what Berkeley Group are doing to their customers. Again, both security and staff were very accomodating.

We did not attend the AGM with the view to disrupting it, but rather to highlight the issues facing Berkeley’s customers and that fact the Board have been in denial for the past year that prices were falling and continuing to fall and that this was causing major issues for purchasers completing on their homes due to mortgage valuatiuons being reduced by up to 40%.

As our representatives swapped suit jackets for Berkeley Homes Collective t-shirts a few minutes into the proceedings, we did notice a lot of surprised faces and a few angry looks from the Board. Mrs Mitchell mixed up her words at this point, clearly un-nerved by our presence.

There are some things you just can’t sweep under the carpet, not even in a remote country house hotel on AGM day! We’re one of them.

We also wanted to highlight the fact that while most in the room were toasting another set of wonderful figures (despite a fall in sales), there was a ticking timebomb awaiting because someone had forgotten to mention in the annual report and accounts that a whole load of off-plan sales were turning sour and buyers forced into default because Berkeley won’t negotiate and won’t help these buyers caught in the mortgage-valuation trap. Mr Pidgley’s preferred approach was to issue pre-action protocol letters, via cheapo legal firm (read: ” ambulance chasers”) Davenport Lyons, to those who can’t complete (note: “can’t” is very different from “won’t” complete!).

At the end of the meeting, having been denied the opportunity to question the Board, one of our representatives was forced to stand up and question them anyway. As predicted they didn’t want to talk about our cases and the fact they are busy trying bankrupt dozens of innocent home-buyers. Most of the Board made a sharp exit, Mr Pidgley was ushered out by his PR men, although he did decide to come back and shout at us. Mrs Mitchell then intervened and kindly rounded up her boys for a private meeting with us in a near-by conference room.

As shareholders of Berkeley Group, you’ll be seeing a lot more of us.

So we agreed on a handshake that we’d keep things out of the public spotlight to give them a chance to come up with a solution, however, we made it clear that as soon as the lawyer’s letters started landing on our doormats threatening litigation then the gloves were off. They also invited us to send us creative suggestions. We sent them 11 and Mr Pidgley refused to even discuss a single one of them.

And so at the beginning of August 2009, while still pumping out the standard line that they were working with buyers to find a solution, they were also busy having law firm, Davenport Lyons, issue our members with notices of intended litigation.

Over the last few months we’ve had a load of journalists get in touch and we’ve kept their numbers. Our desire was to keep this out of the public spotlight and try to find a solution with Berkeley for everyone’s benefit.

A few strange things have happened too, like the mass-withdrawal of our completion notices only to have them reissued a month later, all apparently to give people more time to “find the money”.

Sadly, not one single person who has gone to see them and participated in their haphazard “full financial disclosure” meetings has reported a positive outcome. Instead, they’ve reported an aggressive approach from Berkeley Homes (Steve Gorman comes top of the list of reports for being rude and aggressive), intrusive questions delving into not just their own financial standing but also those of friends and elderly relatives.
Some have left humiliated and feeling even worse than they did when they went in. There have been no solutions offered by Berkeley Homes – they simply don’t want to know. They throw around a few carrots to see how far people will go only to withdraw them all to see how or where people can access money – will they get some credit cards, personal loans, family loans? Will they consider a 2nd charge on the new flat or their existing home if they haven’t /can’t sell it? Where people have said they could borrow a few pounds from friends or relatives to plug some of the gap between the contract price and their mortgage offer, they have been led to believe Berkeley Homes would assist with a deferment or builder’s loan for the rest of the amount due, only to be told later to just hand over the extra money they have disclosed that they could borrow and they’d be released from their contracts. Others have been told that if they pay another 10% from somewhere, they can have more time before the lawyers are called in..

The meetings are simply a pointless fishing exercise and even when buyers have demonstrated they are not worth suing, the same letters have followed from Davenport Lyons threatening legal action.

We have always encouraged members to cooperate with Berkeley Homes, but sadly its been a one-sided process and no-one has seen anything in return.