Tuesday, 02 September 2014

Council to overhaul leaseholder complaints procedure after £210k loss

Islington counts cost of tribunals

Islington Council is set to completely overhaul its procedures for dealing with leaseholder complaints after being forced to write off £210,000 following a tribunal.

The north London council has revealed that it could lose at least another £429,000 in a series of four leasehold valuation tribunals that are due to go ahead this year - roughly 5 per cent of its total estimated annual income from leaseholder service charges.

It decided it had to act after a tribunal ruled in March last year that it was not able to claim £100,000 charges from a group of leaseholders after it carried out major repair work to two blocks of flats in Tremlett Grove. The leaseholders had argued the work was not necessary.

The council wrote off a total of £210,000 following the case after extending the reduction to leaseholders from the two blocks concerned who had not taken part in the tribunal.

The council is now piloting a leaseholder ‘challenge’ process.

This involves getting a senior officer with the homeownership service to investigate leaseholder cost disputes, which will include face-to-face meetings with leaseholders and site inspections.

A report due to be seen by councillors next week states: ‘The aim of creating this dedicated role is to secure a settlement and identify solutions to disputes that avoid the need for the matter to be pursued to the LVT.’

The news emerged a week after Inside Housing revealed that social landlords wrote off at least £2.8 million last year as a result of LVTs.

Islington’s new report also states that the council’s income from leaseholder service charges in 2013/14 is estimated to be £10 million, made up of £7 million for day-to-day charges and £3 million for major works.

But if it lost four cases that are currently with the LVT it would lose at least £429,000.

A spokesperson for Islington Council said: ‘We invest a lot in our homes each year to ensure that they are maintained to a high standard. Now, leaseholders will be involved earlier in discussions around works on their home.

‘In most cases this work is carried out to everyone’s satisfaction. On the rare occasions it isn’t, leaseholders can use our own simple and quick local resolution to disputes.  This can save the uncertainty, time, effort and expense often associated with bringing cases to an LVT.’

Readers' comments (2)

  • because leaseholds aren't considered core business by RPs the management of leasehold maintenance is undervalued and overlooked - and the customers (leaseholders) are treated like cash-cows by the quangos that classically end up providing the maintenance "service".

    There was a time when leaseholders, believing the service charge was being managed with probity, didn't ask too many questions but they have been treated like cash-cows too much for too long and now more than ever they require answers to the question: "Where does my money go?!"

    Along with recent news of changes to the interpretation of s.20 consultation laws, this news should have RPs with leasehold stock re-evaluating how they deal with their leasehold customers... or pay the price for their seemingly wilful disregard for high standard service provision their customers pay for and expect.

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  • Worth noting that these are costs which have been paid to the contractors invloved- hence ultimate victims are tenants as there will be less money for repairs etc

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