Wednesday, 28 September 2016

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.

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