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Lambeth Council to take legal action to High Court against TMO
Lambeth Council is preparing to take legal action in the High Court against a tenant management organisation (TMO) after identifying “serious governance, operational and financial concerns”.
Lambeth Council to take legal action to High Court against TMO #UKhousingThe legal action will seek to compel Loughborough Estate Management Board (LEMB) to address these concerns.
Last month, the council wrote to LEMB urging it to take immediate action within 14 days in order to avoid legal action. The council then granted a seven-day extension until 7 April.
“As LEMB has failed to provide a full response to the serious failings raised by Lambeth Council... by 7 April, or indeed its own preferred deadline of 10 April, the council has had no choice but to prepare legal papers for filing in the High Court to ensure compliance,” the council said earlier this week.
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In November, Lambeth Council referred LEMB to the Financial Conduct Authority (FCA) after highlighting “very weak financial stability and governance arrangements” and “potential misappropriation of funds”.
The council had identified concerns around spending on foreign travel and gifts, including thousands of pounds spent on travel to Turkey and Las Palmas.
LEMB, which was established in 1995 and manages over 1,200 homes on an estate in south London, did not accept the findings of the council’s audit report last year.
The council has asked LEMB to take forward several actions to address its concerns, including re-running a ballot which gives residents the chance to decide whether they want LEMB to continue managing the estate or whether management should return to the council.
A Lambeth Council spokesperson said: “We have been patient and reasonable in seeking a response from LEMB, including granting an extension to the original deadline of 27 March.
“The matters raised, in many cases, span several months of requests from the council that have simply gone unanswered or have been unsatisfactorily responded to.
“The response received does not provide sufficient assurance that robust measures are in place to address the serious issues identified.
“As a result, we have taken the decision to apply to the High Court to compel compliance with the management agreement and to protect residents’ ability to have their rightful say on the future management of their estate.”
At the end of last year, Lambeth Council called on the government to urgently reform TMO legislation, which it said “binds the hands” of local authorities to act on resident concerns.
Since then, the government has confirmed it is carrying out a full review of the Right to Manage regulations that govern TMOs, and will aim to identify if any changes are needed.
This is part of a commitment arising from the Grenfell Tower Inquiry Phase 2 report, and it follows a call for evidence undertaken last year.
Inside Housing has contacted LEMB for comment.
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