Angry tenants of Dolphin Square are calling for action by the company that protects their interest against their landlord in the face of serious dilapidations at the building and rising rents.

Dolphin Square was acquired by Axa Investment Management from Westbrook Partners, an American investment group, six months ago after the failure of Westbrook’s plans to get planning permission for a massive redevelopment of the historic building.

The property had been on the market for more than a year when it was acquired by Axa for what property insiders reported to be a nominal consideration through which Axa took over the Jersey-based owner, The Dolphin Square Estate Company, and its management company, Dolphin Square Limited. At the time, the Westbrook companies had debts of more than £550 million.

The tenants who want action are long-term residents who were living in Dolphin Square when Westbrook acquired the long leasehold interest of the property for £180 million in 2005 from Westminster City Council. They are known as Option B tenants and have protected status.

The Option B tenants number about 170 at the building, which has around 1,250 flats, but they are represented by a company, Dolphin Square (2005) Limited, which is a party to their leases and has powers given to it by Westminster City Council to enforce failure by the owners to meet their obligations to the tenants.

Axa disclosed late last year that they had not purchased the property on their own but with a joint venture partner. Axa own only 51% of the building with their unidentified partner, who is believed to be a property developer, owning the remaining 49%. 

The Jersey-based company, The Dolphin Square Estate Limited, that owned Dolphin Square at the time of the acquisition by  Axa was dissolved in December and tenants are unaware now of the identity of the new registered owner, which is believed to be another off-shore company.

Option B tenants were granted leases with security of tenure at rents at below market value in 2005 but the leases provided for annual increases at a fixed rate until last year when they became subject to an annual 4% increase. As a result, many Option B tenants are paying more than the market rent.

Since the acquisition by Axa, tenants report that there are increasing numbers of empty flats in the building and that asking rents have been falling in common with central London rents in general which have fallen by more than 20% over the last two years. 

They are also concerned about many incidents of roof leaks, flooding and central heating failures which have not been remedied by Axa who promised significant investment and improvements. They also complain that the listed gardens are being neglected.

Axa took over the management company, Dolphin Square Limited, last September and installed its own directors, Federico Fanavelli and Joe Persechino. This company has a short-fall of around £50 million in its balance sheet and the tenants say that nothing has been heard from the new directors since the acquisition.