… First-time buyers cannot pay major works bill
… Councils are useless at cost control but must maintain their buildings, says LKP
… Private leaseholders see themselves as a cash cow
… Council corruption is suspected, sometimes rightly with one council housing fatcat now in prison
BBC R4’s You and Yours programme today featured a young couple of first-time buyers set to defy a £36,000 major works scheme set by Southwark council.
Charlie Johnson and his partner Fran brought a flat in Nunhead, south London, and three months after moving in November 2015 were hit by a major works upgrade to the building.
The bill now comes to £36,000 and the couple told the programme that it was excess and that they cannot pay it.
The maintenance is for a new balcony, new windows and a new roof.
“We were still doing the flat up when the bill arrived,” said Fran. “We are still paying off loans to family to pay for the flat.”
Although they were aware that a major works scheme was a “a possibility”, they had not been told that one was imminent by their solicitor.
Charlie described the bill as “hugely inflated”.
“If the block needs a new roof, it needs a new roof. But we do not believe that it does. We do not think the scope of the works that they [Southwark] have laid out is valid.
“There are hugely inflated costs across the bill. For example, there is a charge for ten mobile phones on the bill at £3,380 and site stationery at just under £200.
“There is a residents’ liaison officer for £13,000.
“The costs are duplicated and inflated, and way more than I would pay for this.”
The couple cannot pay the £36,000 under a repayment scheme of Southwark’s that would mean £1,000 a month, in addition to whatever are their current outgoings.
The couple have taken advice and have decided to challenge the costs by refusing to pay.
Sebastian O’Kelly, trustee of the Leasehold Knowledge Partnership, was also interviewed.
He dismissed Southwark’s statement claiming that if private leaseholders did not pay their share the burden would fall on council tenants in the block.
“It is very debatable whether the tenants in that block will have to make up the shortfall, although the wider taxpayers will have to pay up.
“The advantage of buying an ex-local authority flat is that you get it significantly cheaper than a flat in a private block. But the disadvantage is that you have a local authority as your landlord, and they have an appalling reputation for cost control.”
Presenter Peter White asked whether expansion of the right to buy had made these problems worse.
“It has got worse with right to buy,” replied Mr O’Kelly. “To some degree, there is antipathy towards private leaseholders in social housing blocks.
“It is anecdotal, but many leaseholders do regard themselves as being a bit of a cash cow paying excessively to maintain a council building.
“But the other point is that a local authority block does not have a contingency fund unlike a private apartment block, so this is why these huge bills come to leaseholders.
“This case is by no means unusual.
“I am absolutely appalled that the couple are not going to pay this, though. If they get taken to court this means the property could well be forfeited. Southwark will probably use lawyers on this, and there will be significant legal fees, and people do lose their homes.”
Peter White asked whether Mr O’Kelly could see the Southwark’s point of view, as it has to maintain its housing stock.
“Absolutely, I can see the council’s point of view. They have a responsibility to their tenants and a responsibility to the block: they have to maintain it.
“Unfortunately, councils also have an appalling reputation for signing long-term maintenance agreements with rather dodgy property companies.
“There is a lot of speculation about local authority corruption here. For example, the head of housing in Exeter is in prison at this moment.”
Related posts:
Brighton council leaseholders win refunds for major works
£146,257 – the highest major works bill ever?
Southwark council leaseholders see major works bill slashed from £17,000 to £8,000
BBC features 50 Oxford City Council leaseholders facing £50,000 major works bill
George Osborne’s former nanny faces £100,000 bill and homelessness after refusing to pay major works on her leasehold ex-council flat
Mortgage lenders and conveyancers lay bare the rot of leasehold to MPs
Remind me? Was Southwark the council that told an elderly pensioner that her block needed a new roof and demanded many thousands of pounds which she could not afford and became so stressed she committed suicide? Was it subsequently found that the roof was actually in good repair?
£36’000? Seems rather excessive….. Of course the s20 consultation legislation does not apply to councils so it can be a ‘Pick a figure and get a backhanders’!! approach. Of course I am not saying that is the case in this particular issue but it certainly was with Exeter council boss- wasn’t it? I’ll wager there are PLENTY more like that crook in councils around the country.I believe that the legislation should be reviewed regarding councils and ‘Major Works’
Always said RTB of flats run by social landlords were the biggest turd in the over flowing leasehold cess pit.
And you cannot polish a turd with token reforms.
Nothing about the system offers reasonable protection.
How would a buyer afford a full survey of the whole block, and all the blocks on the estate given costs can be pooled by councils?
If it turned out the seller knew of a S20 notice and failed to disclose, the failsafe on the LPE1 is the landlord has to answer questions.
Did this council not know it was serving s20 notices so as to answer truthfully on the LPE1?
Just more toothless ‘protection’?
I hope that some clever thrusting lawyers are taking note of this couples plight and offer to take up their case Pro Bono. I believe that with quality representation quite a few layers will be unpeeled…… Councils are not exactaly seen as paragons of virtue- are they?
Why any landlord, council or otherwise thinks people can find thousands of pounds at the drop of a hat is beyond me. If this couple had £34,000 they surely would have bought a house (not leasehold) with a garden instead of a flat?!!!
We were asked for ‘just’ £3,000 for new balcony railings (that had never been maintained properly) at the same time as rain was pouring through the roof!! This was the last straw and we went RTM. On asking our property manager at the time if he could find that amount of money his reply was no so why would he expect us to be able to find it!!!!
There has been a programme on recently where landlords go and live in their properties to’see’ what their tenants ‘see’. Very revealing and HONEST landlords are willing to do something about any issues. Leasehold is no different we are still tenants but have no redress despite much (useless) legislation. Again I say as many others ABOLISH LEASEHOLD NOW!!!!!!!
Buildings have to be many properly maintened, and a responsible landlord would have a sinking fund as well as ensure regular upkeep. That is cheaper than long term neglect and allowing the fabric of the building to deteriorate, everyone living in squalor and suddenly being presented with massive “major works” bills.
I ve never met such a landlord and while managing agents remain unregulated it’s unlikely that any significant change will take place. As the law stands Service charges have become just another means to exploit leaseholders and have little to do with actual services that benefit the owner occupier.
I own a flat in a property that has been extremely well maintained – cyclical 5-7 yrs exterior decoration etc. However when we as ‘freehold’ Leaseholders appointed a ‘Professional’ managing agent in 2014 a 108’000 figure was budgeted for the 2018 exterior decoration and possible replacement mansard roof which is at the front of the property – the Flat had been replaced several years ago and is in good repair. Where did this £108’000 arbitrary figure come from? The works should cost less than half this figure as independent contractors have attested. I of course told the hustling agent to go whistle- I of course pay the recoverable service charge demand! I fully understand that a sinking fund for ‘Major Works’ is prudent but it must be reasonable. I have been threatened with forfeiture yadda yadda. A vulnerable elderly or not so elderly person would have paid up.. It is shocking the practices these spivs employ? Here’s the thing, once the agent has your money it is GONE! This paticular agent is from the PEVEREL stable and I hope his / her days are numbered and an investigation of insurance fraud is instigated against said person.
PS – meant “Flat Roof’
Flat leaseholders who are are subject to hustling freeholders and their equally hustling managing agents must galvanise and launch a campaign for strict legislation re Managing agents as the admirable NLC have done against onerous ground rents and the Freehold rip off. Action action not talk talk!
We need the CMA to declare these rip-off leases to be contracts of unfair terms and declare the sale as void .