Leaseholders' torment over alleged cladding fraud

David and Sara Corry said the stress of the past few months had affected their health and their relationship

It was supposed to provide an idyllic seaside retirement but David and Sara Corry's leasehold flat has become a source of stress so severe it nearly broke their 40-year marriage.

"It's been like a nightmare - I mean sometimes we were going to bed six o'clock in the evening just to close our minds to it," Mrs Corry said.

Their building, the Azure on Plymouth Hoe, was managed by Devon Block Management (DBM).

A BBC investigation has found that company is now under investigation for alleged fraud involving taxpayer-funded cladding safety work.

Residents claim they are unable to access hundreds of thousands of pounds from the building's reserve fund, forcing them to manage cleaning and gardening themselves, while fearing costly repairs.

DBM said in a statement it was "currently addressing a number of administrative challenges, and we are actively working to resolve these issues".

It said "legal and commercial proceedings" were ongoing and these would achieve resolutions "satisfying all parties".

Sean Nicholson runs Devon Block Management, which is based in Plymouth

Mr Corry, a retired police officer and volunteer chair of the residents' management company at Azure, and his fellow directors employed DBM to manage their finances and take care of the maintenance of the two buildings that make up Azure.

This included managing cladding safety work funded by a government grant.

Work that stopped when DBM failed to pay the contractor.

Mr Corry became concerned about where that grant money had gone and reported DBM and Sean Nicholson to the police.

He said worries over the situation had caused him to lose nearly a stone in weight and it was the first thing he thought about in the morning.

"It does play on my mind a lot," he said. "I feel terribly responsible for it."

His wife Sara said when the situation came to light she would not go out "because I was afraid residents would have a go at me over things".

"It's just with you all the time," she said. "I would move tomorrow if I could. I love it here. I love being on the Hoe near the town but it's ruined it for a few of us."

They both agreed it had affected their relationship due to the stress caused.

"Forty odd years of marriage could have gone out the window," Mrs Corry said.

"It is not our life that we had [planned] at all."

Theresa and Ray Farley live at Westbury Court where residents paid thousands for roof repairs organised by DBM

The government housing agency Homes England said it had provided money to DBM for one of two Azure buildings through the £5.1bn Building Safety Fund for cladding work.

It said it was "provided on behalf of leaseholders and for making the buildings safe" but was unable to comment further due to the ongoing police investigation.

HM Treasury stepped in with an emergency loan of £536,000 to cover unsettled invoices and to ensure the work was completed.

DBM said in its statement it was owed more than £1.75m, with the Azure residents management company "alone owing in excess of £730,000".

Mr Corry said this was not the case.

'Desperate'

The Azure residents are not alone – the BBC has learned other apartment blocks across Devon have reported DBM and Mr Nicholson to the police, alleging the mismanagement of their funds.

Two miles away at Westbury Court in Devonport, residents paid thousands for roof repairs arranged by DBM – but work stopped when contractors said they had not been paid.

Theresa Farley, a retired social worker who chairs the Westbury Court Management Company, said she believed there should be more than £70,000 available to pay the roofers to finish the job and that the building was still leaking.

She said they were now taking DBM to small claims court and a County Court Judgement had been issued ordering the company to pay more than £45,000.

Mrs Farley said that claim was in relation to the block's reserve fund, with a further claim to come for the outstanding roof repair money.

She said they were in a "desperate situation" waiting to have their roof completed with "people's properties being ruined by water coming in".

In its statement, DBM said the matter was "currently subject to an active legal case" and it was consequently unable to provide further comment at this time.

Only part of the works to Westbury Court's roof have been completed

Kilmorie in Torquay is another block managed by DBM.

Like those at Azure and Westbury Court, residents at Kilmorie have reported the company and Mr Nicholson to the police.

An elderly resident who lives there, but did not want to be named, said they believed there should be £230,000 in the building's reserve account but DBM had failed to provide bank statements or access to the funds.

"It is very distressing," they said.

"Your home is meant to be your castle and I don't feel safe."

They said they would move if they could but the problems meant it would be near impossible to sell.

"I just don't know what's happening to my money at all. It's a mess.

"I thought this was my forever home - this was meant to be my final resting place. It might still be but reluctantly."

DBM said Kilmorie was in the process of transitioning to a new managing agent.

It added: "Devon Block Management Ltd will facilitate the transfer once we receive the necessary details from Kilmorie's directors, which have not yet been provided."

DBM said contractual obligations signed by directors of various management companies were "business-to-business transactions" but if necessary the directors of DBM were prepared to "inject funds to ensure the company meets its obligations".

The Kilmorie has panoramic sea views overlooking Torbay

In 2023-24, there were an estimated 4.83 million leasehold homes in England, according to government data.

A leasehold is where homeowners do not own the land their property is built on but instead lease it from a landlord for as many as 999 years.

In other situations leaseholders can own a share of the freehold. Most leaseholders pay fees to freeholders or their managing agents for things like building insurance and maintenance.

Leaseholders have been calling for reform to the system which has been described as "inherently unfair", for years.

Common concerns include high services charges, unscrupulous freeholders and the lack of regulation for managing agents.

Successive governments have promised to act, with Labour vowing to abolish leasehold altogether by the end of the Parliament and bring in a commonhold model. It also wants to regulate ground rents.

A Managing Agents Regulation Bill was introduced in Parliament in July, which would include mandatory professional qualifications for managing agents among other measures.

Campaigners welcomed the news but warned it may come too late to help current leaseholders.

Meanwhile reforms brought in by the previous government have yet to be fully enacted.

Katie Kendrick, from the National Leasehold Campaign – which works to increase the regulation of property agents to protect leaseholders, said these types of problems had a huge impact on people's mental and physical health and many had no faith in the legal system to protect them.

"Every single day that passes, there's another bill that lands on somebody's doorstep, another person that is living or trapped in an absolute nightmare," she said.

"Governments previous and current say all of the right things, and I welcome everything that they say, but actually that's meaningless unless it's felt amongst leaseholders.

"And is it being felt? It's absolutely not being felt, and that needs to change."

The Azure on Plymouth Hoe is made up of two buildings connected by a walkway

Devon and Cornwall Police said it was investigating "an allegation of fraud and misuse of funds in relation to a number of buildings primarily in Plymouth that was first reported to us in January 2025".

The force said no arrests had been made and inquiries were ongoing.

The Ministry of Housing, Communities & Local Government said it could not comment on ongoing investigations "to avoid jeopardising their integrity".

It said: "We want to protect leaseholders – which is why we are holding managing agents to account with stronger regulation - including mandatory professional qualifications as a minimum, and are committed to implementing legislation to give people more rights, power and protection over their homes."

For Mrs Farley and the Corrys reform cannot come quickly enough.

"I was devastated when this first all came out... it's motivated me to make sure that we get a resolution," Mrs Farley said.

She is calling for more regulation in the industry because "otherwise anybody could just set themselves up to become a managing agent".

Mr Corry said the lack of regulation made him angry and was something that should have been sorted "many moons ago".

Mrs Corry added: "Get a move on and get some legislation in and get this into law because it's just gonna happen time and time again."

The company Plymouth Block Management has issued a statement to make clear that it is not connected to Devon Block Management.

Additional reporting by Mark Edwards.