Monday, 21 May 2012

Affordable Rents & Service Charge Management

Posted in: Discussion | Legal debate

31/10/2011 11:17 am

Nathan Cousins

Nathan Cousins

Location: South West
Posts: 4

I have been contemplating how service charges will work under the affordable rents regime and would appreciate any advice people can offer.

I see potential confusion in operation, mainly because

- "The rent level should be assessed according to the individual characteristics of the property,  It is to be calculated inclusive of service charges." (Briefing: NHF New Tenure Arrangements)

With this in mind how will service charges be acknowledged in the tenant agreement?

Can you operate a variable service under this charge model?

How will tenants who are charged in this way be able to understand the services they are receiving in relation to their gross charge, when truly speaking services are a notional part of the rent?

What if there are mojor changes to the services provided that would necessitate an increase in the service charge that should then be passed on to tenants? How can this be managed when the increase mechanism is an RPI linked % uplift.

How are social landlords going to provide meaningful infromation on service ccharge cost performance under this charging regime?

There are more questions that I could ask, but I though the above might start off the debate.

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F451

F451

Location: Europe
Posts: 181

01/11/2011 5:42 pm

The simple answer is: I'm sure that none of this has been thought of by the Minister so the Civil Servants are desparately trying to cobble together a working format that at least looks like the scheme he declared as complete and in place.

The direction that service charge must be part of the 80%MR maximum, as you point out, is not workable due to variations within the billing year, and the need to increase some charges (for instance utilities) in keeping with their source - potentially then exceeding the cap on the rent.

Then what happens when all the rents in the area, as an average, change, for instance because of the number of 80%MR rents being charged - the baseline has them lifted allowing higher rents to be charged, whilst still being within the formulae stated.

Likewise - if all the goody, lovely wonderful private landlords all drop their rents out of the goodness of their hearts, because they can see their tenants struggling (some people still think this is likely - can you believe that!) then the average rent level will fall and the existing 80%MR rents will now be in excess of the formulae amount.

What is missed though is the insidious timeout clause where the homes can be sold off - a bit like One Housing Group did - when the 'affordable' period is over. Of course the tenant gets first offering, and then a market rent otherwise.

So much change and so little thinking - what sort of mess are this lot saving up for our futures simply to make short term market gains.

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tags Accountability, advice, antisocial tenant, comment, consultation, debate, decent homes, freedom of information, harassmennt, house building, housing associations, Knee Jerks are self important ministers, legal, mixed communities, petition, public/private, rebuild, ruling, Service Charges, sound insulation, tenants

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