Category: Leases

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Financial Housing Information Leaseholders Leases Major Works Repairs Service Charges

THE LAW

The Landlord and Tenant Act 1985

sets out the basic rules for service charges. It defines what is considered a service charge, and sets out requirements for making sure costs are reasonable. Landlords should consult leaseholders before entering into any agreement for work or services which would lead to a service charge.

The Landlord and Tenant Act 1985 also applies to payments of service charge under a lease whilst a management order is in place under Part II of the Landlord and Tenant Act 1987.

Section 18 (1) of the act defines a service charge as ‘an amount payable by a tenant of a dwelling as part of or in addition to the rent

  • which is payable, directly or indirectly, for services, repairs, maintenance, improvements or insurance or the landlord’s costs of management; and
  • the whole or part of which varies or may vary according to the relevant costs.’

The costs of the services, repairs, maintenance, improvements, insurance and management must be reasonable, and the tribunal may decide whether they are.

Please note: the definition in section 18 (1) does not overrule the lease. The item or service must still be included in the lease for your landlord to be able to charge for it.”

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Councillors Financial Housing ILA Information Islington Islington Council LBI Leaseholders Leases Major Works Service Charges

Massive Rent Increases

Islington Councils latest budget, as usual, is all “Doom and Glum” and continually pointed at the great hole in the  borough’s finances. 

Nevertheless, since the councils main funding stream is basically through council rents and Maintenance bills, their obvious solution is to raise the average Council rents by a whopping great £9.71p per week. This is in order to replenish the Housing Revenue account, and facilitate further mis-running of the borough. 

However, strange though it may seem, whilst the borough is financially struggling to survive, the Council have also re-purchased 389 ex Council flats. It’s not to move islington tenants out of temporary accommodation, such as bed and breakfast, which costs the borough a fortune, but to be used as further…short term accommodation..!

Question, if this borough is having financial problems : – Just how/and from where, did they acquire the money to finance such a massive purchase?

Using a broad brush approach, approximately 389 flats at an average cost of £400.000 each? (and we all know, that in this borough you can’t buy a shoe box for that, much less 2, 3, and 4 bedroom flats) comes to approximately £155.6 million pounds!

Question, If the purchase of these flats involved a grant…how much was it in total?… if a loan, just how much undisclosed debt are we now jointly carrying?…and what % interest are we going to be paying?, to whom, and for how many years to come?. Which of course will be solved, once again, by simply, raising the RENTS and MAINTENANCE bills …Again and Again…

It “Beggars Believe” what both Tenants and Leaseholders of this borough are forking out in order to cover financial mismanagement…

Hopefully, the usual “Smoke and Mirrors” won’t be enough this time around.!!!

Dr Potter

Chairman ILA www.ila.org.uk

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Councillors Financial Housing ILA Islington LBI Leaseholders Leases Major Works Repairs Service Charges

Follow the money!

A simplistic explanation of why we pay so much…!!!

Why are council Rents and Maintenance bills, so inexplicably high? …simple,  …Just follow the money!

The council state that their main funding stream is basically via council rents, and maintenance billing. This is paid into the Housing Revenue Account by tenants, leaseholders, and 4000 absentee landlords…So…

1/ Islington Council issue contracts to maintain the borough’s estates.

2/ The Contractor scopes out the work, price the job, and bill’s the Council for work completed.

3/ The Council (using 33% of the housing Revenue account) pays the tenants contribution. It apportions the remainder between their leaseholders and absentee landlords.

4/ The absentee landlords then recover their cash by raising their rentals.

Who gets this public money?

1/ Builders get paid directly by the council, come what may.

2/ The council simply raise the tenants rents, and present Home owners with a massive bill.

3/ Landlords increase their rental charges to cover their liabilities.

Where does the money wind up!

1/ Contractors reinvest their massive profits in new projects.

2/ Builders simply “rack it in” by piecemeal subbing-out of the fractionated contracts.

3/ Council reduces its gross over spending to appear efficient.

4/ Landlords pay off their Mortgages.

5/ Private tenants reduce their renting costs by flat sharing.

6/ Mortgage lenders always win in the long run, since their investment is inevitably founded in “Bricks and Mortar”. 

All financed from the constant uncontrolled wastage of public money.!

Solution…

1/ Council reduces contract sizes

2/ Council stops issuing astronomical bills to pay contracts

3/ Council controls Building and Maintenance costs by bringing building projects “Back in House”…

4/ Council demands total accountability

5/ Council demands value for money

6/ Council accepts “Individual Corporate Responsibility”, as the norm. 

Which is no more than what they’re already being handsomely paid for doing…!!!

Dr Potter…

Chairman ILA… (www.ila.org.uk) 

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Councillors Financial Government ILA Islington LBI Leaseholders Leases

Millions could be raised in Islington leasehold sale

With the Leasehold reform bill on its way, its maybe time for Islington council to consider options like this.

Originally written by Jon Dean Thursday, November 1, 2012.

More than £20million could be raised for new homes if Islington Council becomes the first to adopt a pioneering scheme suggested by homeowners.

The plan, thought to be the first of its kind in the country, would see the town hall offer leaseholders a one-off chance to extend their leases by 99 years at a knock-down price.
With around 11,000 people owning former council properties, the initiative could raise in the region of £22million if the price was set at £2,000 as suggested.
The idea is the brainchild of Brian Potter, chairman of the Islington Leaseholders Association (ILA), who contacted Cllr Catherine West, leader of Islington Council, to put forward the proposal.
He said: “The beauty of this idea is that homeowners get security for two generations and can leave their home to their children, while Islington Council get some much needed funds.
“I think they will go for it – I mean, they will definitely want the cash. Other councils are raising money by selling off properties…they’re selling the family silver. 
“This way Islington get to keep the silver and make bundles of money by essentially selling cans of air.”
When people buy a former council home, they usually buy a lease for the property for a fixed period, normally 125 years, while the town hall retains the freehold. 
When the lease gets down to around 80 years, it can be hard to sell or mortgage the property and extending the lease can be a costly, complicated process. 
The cost of extending a lease on home worth £200,000 starts at around £7,500.
Under the proposed scheme the price of extending would be between £1,000 and £3,000 depending on the value of the property.
The council confirmed it was looking into the idea.
Cllr James Murray, Islington Council’s executive member for housing, said: “We are keen to look at new ideas like this, particularly at a time when we continue to face huge cuts to our funding by central government.

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Financial Government Housing ILA Information Islington Leaseholders Leases Service Charges

Law Commission publishes report on valuation in enfranchisement

On Wednesday 8th January the Law Commission published its report – “Leasehold home ownership: buying your freehold or extending your lease”. The Commission sets out options to reduce the cost that leaseholders have to pay to buy the freehold or extend the lease of their homes, and follows its September 2018 consultation paper. Click here for more information and a summary of the options in the report

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Government Housing ILA Information Leaseholders Leases Repairs Service Charges Website

Government’s approach to dangerous Grenfell-style cladding replacement consistent

Grim it may be, but the government’s approach to getting dangerous Grenfell-style cladding replaced on tower blocks certainly appears consistent. Credit: Private Eye, Housing News

 

Click Here

 

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Government Housing ILA Leaseholders Leases Website

Invitation to free webinar on consultation re consumer redress in housing market

Register now for the free webinar

LEASE is hosting a free webinar to help you make an informed contribution to the Government’s consultation  ‘Strengthening consumer redress in the housing market’.

The webinar will be presented by our experienced advisers, Nicholas Kissen and Kavita Bharti.

The webinar is on Monday 26 March 2018, 7pm – 8:30pm. Click here to register.

The Government is concerned that the current landscape is confusing for consumers both in terms of the number of schemes, differences in practices, and gaps where consumers have no recourse to redress. As a consequence the consultation explores and questions:

improving ‘in–house’ complaint processes, to ensure that issues get resolved as quickly as possible;

the practices and functions that should be expected of redress schemes and the powers that they need to do this;

How to fill existing gaps in redress, with a particular focus on private tenants, buyers of new build homes and leaseholders; and

The case for streamlining and improving services for consumers through the creation of a single housing ombudsman service.

Responses to the consultation should be submitted no later than midnight on 16 April 2018. You are encouraged to respond by completing an online survey.

Alternatively you can email your response to the questions in the consultation to – Housingredress@communities.gsi.gov.uk

Written responses should be sent to:

Social Housing Division, Ministry of Housing, Communities and Local Government, Third Floor, Fry Building, 2 Marsham Street, London, SW1P 4DF

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Financial Information Leaseholders Leases

Landmark leasehold case fails to slash extension costs

Campaigners vow to fight on after appeal court rules in favour of leading London freeholder .  (The Guardian)

Campaigners have failed in a long-running legal battle to slash leasehold costs after the court of appeal ruled in favour of a major London freeholder.

The case, Mundy v the Sloane Stanley Estate, involved a small flat in Chelsea where the lease had fallen to less than 23 years and the freeholder was seeking £420,000 to agree an extension

Campaigners had hoped that a ruling could slice as much as half off the cost of extending a lease or buying a freehold. But the court found in favour of the Sloane Stanley Estate, in a major victory for owners of freehold land, such as the Duke of Westminster’s Grosvenor Estate.

The challenge had been led by surveyor James Wyatt of Parthenia Valuation, who argued that a system of lease valuation commissioned on behalf of the Duke of Westminster more than 20 years ago was invalid.

But lawyers acting on behalf of the Sloane Stanley Estate, which controls land around London’s Sloane Square, King’s Road and Fulham Road, said the Parthenia valuation model proposed by Wyatt was now “consigned to history”. More Info