Thursday, 09 February 2012

Half of Lambeth leaseholder bills could be wrong

Lambeth Living may have wrongly calculated 50 per cent of leaseholders’ service charge bills.

The arm’s-length management organisation, which manages around 34,000 properties on behalf of Lambeth council, has pushed service charges up by as much as 2000 per cent in some cases.

But details leaked from a report by independent auditors PriceWaterhouseCoopers suggest half these charges are incorrect.

Steve Rice, chairman of Lambeth North Area Leaseholders’ Forum, told the local paper: ‘I have been told that PriceWaterhouseCoopers conducted a sample test of the estimates, and estimate around 50 per cent of all service charges were incorrect.

‘When we challenged Lambeth Living they denied it and said it was just 400 householders, then they changed their story and said it was households in 400 blocks.’

The ALMO plans to charge an extra £2.1 million in service charges over the coming year. Last year, the target was £7.8 million, but in 2009/10, Lambeth Living estimates it can collect £9.9 million.

Last month, PKF accountants told Lambeth Living its accounts needed attention, after it underestimated its VAT bill by £1 million, and had failed to take account of its £3 million pension liability. These issues have since been resolved.

A Lambeth Living spokesperson said: ‘We had a large number of inquiries after distributing estimates to leaseholders, so we commissioned an independent audit which is due to be completed shortly – initial findings are that some accounts will need amendments.

‘We have already allocated additional staff to complete this work and we aim to adjust the accounts and contact leaseholders by next month.’

Readers' comments (4)

  • How did Lambeth Living become an ALMO? First, there was serious shortfall in the operating budget, (somehow they managed to weasle out of that), then the massive rent increases and now this! Clearly this useless bunch can't manage finance and no doubt they will blame someone else!!!

    Unsuitable or offensive? Report this comment

  • Well tell Lambeth leaseholders something they didn't already know. RTB leaseholders across all the current and former Looney Labour Inner London boroughs get a raw deal as IH has amply illustrated in articles passim eg

    http://www.insidehousing.co.uk/story.aspx?storycode=6504635

    (Note Lambeth did not supply details to Keith on this story so they did not figure in the stats...)

    How on earth this laughing stock of a borough has the gaul to set up an ALMO and expect the taxpayer to fork out millions for them to send out further massive bills for botched DHS work, God only knows. Hopefully a future Tory Government will send in PC Plod and start jailing the thieves and incompetents who pass for council officers at this national disgrace of a local authority. Privatise the entire housing operation. It's the only solution.

    BTW the borough is now advertising to fill the hardest job in PR in the entire country. Yes, the London Borough of Loony Lambeth is now advertising for a "Head of Media Relations". Check out the ad at:

    http://jobs.paidcontent.co.uk/job/4e1804499612079a9476f5626b2065f7/?d=1&source=site_recent

    Note that the role requires a Criminal Records Bureau check. I guess they figure that, as thieves, liars and crooks are already "over-represented" (dontcha just lobe that lefty expression?) amongst their officers, they dont need to add anymore to the payrole!

    FF

    Unsuitable or offensive? Report this comment

  • I owna leasehold flat with Lambeth council as my freeholder, and I too have suffered from the grotesque increases in service charge estimates.

    However, my solution to dealing with the problem is that I have made a "s.21 request" under the Landlord and Tenant Act 1985 which requires Lambeth to provide me with a summary of the accounts (which must be certified by an accountant) for the last service charge year (08/09). Lambeth must provide this within one month or be in breach of the Act.

    Of course, it can't comply, as all leaseholders have been informed that the final accounts will be delayed well beyond this.

    Fine - if Lambeth now tries to enforce my payment of the estimated charges, Lambeth's failure to comply with the LTA 1985 will act as a decent defence.

    Do you, also, want to put Lambeth in breach of of the LTA 1985 to your benefit? If so, here's a sample letter you may wish to base your request on:

    "Dear Sirs

    Request for summary of accounts under s.21 of the Landlord and Tenant Act 1985 (the "Act")

    I refer to the Service Charge Account Reference [x] relating to [x] (the "Property"), for which I am the leasehold owner, and Lambeth Council is the landlord ("Lambeth").

    This is a request under s.21 of the Act to supply me with a written summary of the costs incurred in relation to the Property and each other Relevant Dwelling (as defined in paragraph (b) below), for the twelve month period from April 2008 to March 2009 (the "Period"), and which are costs incurred by Lambeth, as landlord, in relation to the service charges payable or demanded as payable in that or any other period (the "Costs").

    Note that, in accordance with ss.21(4) to (6) of that Act:

    (a) Lambeth, as landlord, is required by law to comply with the request within one month of the request or within six months of the end of the Period, whichever is the later.

    (b) The summary must state whether any of the Costs relate to works in respect of which a grant has been or is to be paid under section 523 of the Housing Act 1985 (assistance for provision of separate service pipe for water supply) or any provision of Part I of the Housing Grants, Construction and Regeneration Act 1996 (grants, etc. for renewal of private sector housing) or any corresponding earlier enactment and set out the Costs in a way showing how they have been or will be reflected in demands for service charges and, in addition, shall summarise each of the following items, namely:

    (i) any of the Costs in respect of which no demand for payment was received by Lambeth, as landlord, within the Period,

    (ii) any of the Costs in respect of which:
    (A) a demand for payment was so received, but
    (B) no payment was made by Lambeth, as landlord, within the Period, and

    (iii) any of the Costs in respect of which:
    (A) a demand for payment was so received, and
    (B) payment was made by Lambeth, as landlord, within the Period,

    and specify the aggregate of any amounts received by Lambeth down to the end of the Period on account of service charges in respect of Relevant Dwellings and still standing to the credit of the lessees of those dwellings at the end of the Period.

    Relevant Dwellings means (i) the Property, and (ii) each other dwelling whose lessee is a person whose obligations under the terms of his lease as regards contributing to the costs relate to the same costs as the corresponding obligations of the lessee of the Property.

    (c) The summary must state whether any of the Costs relate to works which are included in the external works specified in a group repair scheme, within the meaning of Chapter II of Part I of the Housing Grants, Construction and Regeneration Act 1996 or any corresponding earlier enactment, in which Lambeth, as landlord, participated or is participating as an assisted participant.

    (d) As the Costs are payable by the lessees of more than four dwellings, the summary must be certified by a qualified accountant as:

    (i) in his opinion a fair summary complying with the requirements of paragraph (b) above, and

    (ii) being sufficiently supported by accounts, receipts and other documents which have been produced to him.

    Note that I have received a s.20B notice which purports to entitle Lambeth to collect the service charge for the Period by allowing it to make a demand beyond the usual 18 month time limit imposed under that section. Whether or not Lambeth is so entitled following service of such notice, the notice does not relieve Lambeth of its liability to comply with this request under s.21 of the Act.

    I look forward to receiving a certified summary on or before 20 October 2009, which is the deadline imposed on Lambeth by law under s.21(4) of the Act.
    If Lambeth fails to comply with this request, it may, amongst other things, adversely affect any claim by Lambeth, as landlord, to recover any service charges (estimated or incurred) due in respect of the Period or any other twelve month period subsequent, in any leasehold valuation tribunal or otherwise.

    Yours faithfully,



    [x]
    Leaseholder"

    Unsuitable or offensive? Report this comment

  • I have received a letter -forwarded by my MP- Lambeth haven't replied yet of course- that reduces my service charge liability for 2007-8 / 2008-09 by £1490, I wonder if my neighbours will benefit from this admission of errors?
    This challenge has been subject to several 'changes of mind' by Lambeth Living management, which makes me wonder if my original legal challenge should be pursued. No answer from Lambeth's Moderating Officer to any of the letters sent, their legal department seems to think it is untouchable.

    Unsuitable or offensive? Report this comment

Have your say

You must sign in to make a comment

sign in register

Related

Articles

  • VAT cut tops Budget wishlist

    18/03/2011

    Changing UK value added tax rules would boost the social housing sector by at least £623 million a year, the National Housing Federation has said.

  • Tales of fortune

    22/07/2011

    Arm’s-length management organisations face tough choices over their futures. Lydia Stockdale kicks off our special issue by exploring the opportunities and pitfalls that lie in wait.

  • Councils to demolish homes to cut HRA debt

    28/10/2011

    Councils will demolish thousands of homes to slash the amount of debt they take on under the imminent reform of the housing subsidy system.

  • New ALMO boss given two month deadline

    9 February 2011

    Lambeth Council has appointed an interim chief executive to its troubled arm’s-length management organisation, and given him two months to improve the body.

  • Council finance reform under threat

    07/10/2011

    Councils could be saddled with millions of pounds of extra debt as a result of government attempts to revive the right to buy, sector experts have warned.

Resources

  • Driving the agenda

    10/06/2011

    In order to decide on its local offers, Gloucester City Homes ran a roadshow and set up a residents’ steering group. Here, Lisa Howarth explains how

  • On top of the world

    22/07/2011

    Tower blocks are not typically home to extra care schemes. But Helen Clifton finds out how one arm’s-length management organisation is giving older residents a room with a view

  • The transfer window

    27/01/2012

    Be aware of employees’ rights when a change of service provision occurs, warns Marc Long, partner at Clarke Willmott

  • Money matters

    16/09/2011

    How do council housing heads and arm’s-length management organisation bosses fare in the salary stakes? Lydia Stockdale reveals the results of Inside Housing’s exclusive poll

  • Dangerous type

    25/11/2011

    The demotion of a housing employee over comments he made on Facebook highlights the grey area between employees’ public and private lives. Here, Lydia Stockdale finds out how others can avoid getting themselves into trouble

Latest Jobs

  • Housing Officer

    Housing Officer x 4 (3 permanent and 1 x 12 month fixed term contract)

    £28000 per annum

  • Manager

    HouseMark is the essential value for money and performance improvement tool for the social housing sector. We have more than ...

    £20,000 – £49,999

    Closing: 2012-02-10 00:00:00

  • Tenancy/Housing Officers Wanted (Full Time & Part Time)

    Working in an exciting area of London, you will have proven experience as a housing or tenancy officer.

    £27,000 pro rata

    Closing: 2012-02-10 00:00:00

  • Home Ownership Officer

    Home Ownership Officer required

    £31000 - £34000 annum

  • Assistant Director of Asset Management - Strategy

    Here at Raglan we build new low cost homes for general rental or shared ownership and also provide supported accommodation. ...

    £60 - £65k plus car allowance

    Closing: 2012-02-17 00:00:00