Wednesday, 23 July 2014

Councils will be able to ‘get around’ £10k cap on leaseholder charges

Confusion over repairs caps

A proposed cap on what councils can charge private leaseholders for repair work has been met with confusion and scepticism by legal experts.

Communities secretary Eric Pickles said on Monday he wanted local authorities which receive government funding to help maintain tenants’ homes to charge leaseholders a maximum of £10,000 over five years for repairs, or £15,000 in London.

Lawyers were divided on whether the proposals would be costly for council landlords.

Giles Peaker, a partner at Anthony Gold Solicitors, said councils could still use money not provided by the government to pay for communal repair works, which would mean they could charge over the cap.

‘[The proposal] is fairly meaningless,’ he said ‘It only applies where there is government funding related to the works… I think this would be really easy to get around.’

Councils using decent homes grant would have to restrict leaseholder charges under the proposals. The government announced a further £160 million of decent homes funding in June’s spending review for 2015/16. It has spent £1.56 billion on the programme since 2010.

The proposal includes the use of future decent homes cash and any future government funding used for works of repair, maintenance or improvement. It will not affect repairs and maintenance work funded by housing revenue accounts.

Mr Peaker said councils could get around the new rules, which are subject to consultation, by fixing a leaking roof at a different time to conducting repair works done with decent homes funding.

Catherine Hand, a partner at Trowers & Hamlins, said councils were already conducting a lot of repair works not funded by the government so the impact would be limited.

However, Gavin Smart, director of policy and practice at the Chartered Institute of Housing, warned local authorities could be deterred from carrying out repairs.

Readers' comments (3)

  • Progressive Solutions Required

    Carrying out repairs to meet their landlord responsibilities are not getting around anything. If leaseholders refuse to meet their responsibilities and so put others lives at risk does Pickles really support this? What a loon.

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  • Instead of gimmicks Pickles could be passing legislation to allow leaseholders to take over the management of their blocks where they truly believe they are being over charged, but ensuring they do not endanger lives once they have done so.

    Pickles should be a Minister first and a Politician second, but in this item he is politicking first second and third whilst risking causing another fine mess to add to the many he has already made, and cost us the taxpayer a fortune in legal cases and remedial actions. I would estimate that Pickles' fowl ups have cost leaseholders and all other taxpayers far more than the cost of a roof repair!

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  • I am a Camden council leaseholder. It is one long round of keeping track that Camden as my freeholder do not overcharge me for repairs. Everyone is milking me. The council, the contractors for repairs, the sub contractors. Repairs are done where there need not be any the council can get a percentage on these and I get charged for work and repairs to my council tenant's flat below me among other things!! There are big costs in time and money going to the LVT challenging this monolithic organisation.

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