Wednesday, 02 December 2015

Housing minister steps in to resolve fears over lack of safeguards

Insurance concerns threaten cashback scheme

Questions over liability for injury or damage are threatening to derail a government scheme to reward social tenants who carry out their own repairs.

The government is arranging last ditch meetings between insurers and housing providers in a bid to ensure its tenant cashback scheme launches in April as planned.

The scheme, due to be rolled out across England, allows tenants to commission or carry out repairs on their homes and keep savings made by their landlord.

Housing minister Grant Shapps believes the scheme will empower tenants by allowing them to keep a proportion of the average £1,000 per property spent by landlords annually on repairs and maintenance.

But pilot projects have been delayed or scaled down as insurance companies raise concerns about liability in case of accidents, such as falls, and home contents insurance in case of water damage or breakages.

The insurers’ concerns have led to confusion about the insurance status of tenants who carry out repairs and whether new policies need to be arranged by landlords or tenants.

Three official pilot projects were announced in April 2011, with housing associations Home Group, Hastoe Housing Group and Green Vale Housing, a subsidiary of Together Group, taking part.

Eight months on from the Communities and Local Government department’s announcement of the pilots, Hastoe is yet to launch its scheme as it is still working through details, including insurance cover. A spokesperson said it hopes to be able to launch its scheme in the spring.

Home Group, which owns or manages 51,000 homes, has been forced to water down its scheme by excluding large-scale improvements, and has put in place safeguards, including contracts for tenants to sign to ensure they have adequate contents insurance. Its pilot, which began in the autumn, has involved 141 tenants.

Rosemary du Rose, executive director of customer services at Home Group, said: ‘The safeguards we have put in place restrict the types of repairs to small-scale improvements. Customers taking part in the pilots are required to have contents insurance.’

Green Vale Housing has just 20 residents on its pilot, launched last August, which is targeted at tenants who manage their homes in line with existing tenancy agreements. Ian Rumsam, head of home works at Together Group, said writing the scope of improvement works into tenancy contracts ‘has removed, or substantially reduced, the risk of litigation’.

A spokesperson from insurance consultancy Bluefin said: ‘Both landlords and tenants should check the terms of the tenancy agreement before sanctioning repairs and improvements as liability for any resultant damage could vary from case to case.

‘Where an independent contractor is employed, both landlord and tenant should check that they have cover in place before any work commences.’

A CLG spokesperson confirmed talks are being arranged.

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