Major Works billed as Service Charges

Camden Leaseholders’ Forum homepage Discussion Board Service Charges Major Works billed as Service Charges

This topic contains 18 replies, has 8 voices, and was last updated by  Camden Leaseholders’ Forum 3 years ago.

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  • #4014

    alex
    Participant

    Dear Forum,
    We (leaseholders at Una House KT) just received a bill for the renewal of our heating system.
    Interestingly, it is billed under Service Charges. So we are asked to pay for cost incurred between start of the work (Autumn 2015) and end of fiscal year (31/03/2016).
    1) Can Major Works be billed as Service Charges?
    2) Can major works be billed before they completed?
    3) We have requested to be billed once works are completed with a full breakdown of the costs.Is it the right thing to do? Can we refused to pay this bill until we receive satisfactory answers from Leaseholders services?
    4) We suspect Camden are doing this to be able to qualify for government grant (better homes) for works that happened before end of mar 2016. Does anybody have any info about how the 26 million pounds grant has been allocated? How can we get transparency about this? if these works are being partly funded by the grant, how is this passed to leaseholders?

    Many thanks for sharing your experience on this.
    Alex

    #4015

    emmajah
    Participant

    I have just had a bill of £14,999 for renewal of the communal heating system on the Webheath estate. This also covers only works completed up to March 2016, so I have an awful fear that I will get a similarly huge bill this time next year.

    As I understand it, Major Works can be billed as service charges, as long as leaseholders were informed in advance via a Section 20 (S20) notice. You should have been served a S20 notice a fair while ago, and probably also had the opportunity to contribute to a consultation on the different options.

    I contributed to the consultation, as did many other Webheath leaseholders, but to my dismay Camden still opted for the most expensive option – which will decimate my finances.

    I believe there is a cap of £15k, which may be why Camden bill us annually – it means they can bill us for just shy of the price cap more than once, thereby reclaiming their ridiculous costs.

    So: I am afraid I can’t help you understand the huge bill, but I would expect you to have been served a S20 notice at some point over the past few years.

    #4017

    alex
    Participant

    Thanks Emma for sharing you experience. Ours is identical. We have received all the section 20. All our objections to the scheme were ignore and they went for the most expensive option.
    You are right I feel the the split of the bill into different fiscal year might be a trick to bill just under the cap and then repeat the following year.
    Have you and other lease holders challenged camden regarding this?

    Thanks
    alex

    #4018

    emmajah
    Participant

    Hi Alex-

    There was, I believe, an attempt to challenge it (I wasn’t involved, which I regret).

    Also, several of us (individually, not collectively) applied to be exempted from the works, as we’d be able to install our own boiler, pipework, radiators etc for a fraction of the price charged by Camden. However, this request was rejected. From looking elsewhere on this forum I have concluded that Camden must have a policy of not allowing leaseholders to exempt themselves from such heating works (presumably because the vast sums we pay contribute significantly to the overall project costs).

    I concluded that Camden had closed all the alternative routes and that we were left with no other option than the one they had chosen. I shouldn’t have given up so easily, but too much else was happening in my life at that time (not least trying for 6 months to get leaks fixed and damage made good) to be able to take on Camden over this.

    Emma

    #4019

    CP
    Participant

    Hi Emma and Alex
    Check out an earlier discussion on this subject ‘Heating Replacement (Specifically at Millman Street)’. The Millman Street TRA have been fighting Camden’s proposal to refurbish the heating and HW system since last year on several grounds, (expense, suitability of design, transparency of process, etc) and for the moment they have backed down and agreed to re-evaluate the proposal. In the course of this process, we invited reps from the Highgate Estate TRA to attend our TRA meeting. Leaseholders there did manage to opt-out of Camden’s heating refurbishment proposal successfully and some had had individual systems installed – so it seems that there are precedents for this.
    All this is not necessarily helpful in that you have already had the work done and it looks difficult to protest retrospectively. It’s been a hard fight so far and now we’ve moved on to fighting Camden’s window replacement proposal – for many of the same reasons that we opposed the heating and HW proposal. However, what it does point up is the importance of establishing a Residents Association including tenants and leaseholders to actively scrutinise Major Works proposals and to mount a concerted opposition where necessary. Involving your local councillor is also important:ours has been particularly supportive. There is a helpful guide to Major Works on this website if you haven’t already seen it.
    CP

    #4020

    lambda
    Participant

    Im new to this forum and a very recent leaseholder.
    I get the impression that Camden are unfairly and excessively charging leaseholders.

    Surely the leaseholder community across all of Camden is very large.
    Would it not make sense to collectively contest and opppose Camden with legal help, as I get the impression we are all impotent against Camden’s autocracy?
    If we all pooled together, would it not be possible to raise funds for affective legal assistance?

    or is there not enough will/interest?

    just a thought
    thx

    #4027

    Hi Lambda. This query often comes up during our meetings.

    In practice organising these things come with a lot of responsibility and demands from people; if the perceived benefit is great enough perhaps people would come together and organise themselves on lines such as your suggest. If people were paying fees towards legal work, then the people running such an organisation would have larger responsibilities than the Forum does currently. There was a fees-based Camden Leaseholders Association some time ago (and Peter Wright may be along shortly to correct me if I have the wrong name) many years ago but that is now defunct.

    From the Forum’s perspective, the consensus is that our constitution doesn’t allow us to do this, so we operate with that in mind when we engage with Camden Council and try different things. I personally think the Forum would welcome alternative attempts at getting Camden to improve, although I would suggest that one challenge would be identifying suitable legal cases; it’s probably helpful to note that from time to time the Forum has wanted to find “no win, no fee”-style lawyers and struggled to do so.

    One other pain point is that realistically some leaseholders would pay and others wouldn’t (and would benefit from the free advice).

    Best regards,
    Paul Ginsberg, Camden Leaseholders’ Forum member

    #4031

    wendyh
    Participant

    dear all,
    After having looked at the government website advice to leaseholders it states that if you have already agreed to the charges ( which
    payment would be counted as ) then you cannot challenge wrong billing, unsatisfactory work or the need to pay the bill at the tribunal.
    I have just written to Camden stating that their new idea of charging ahead of completion of work stops us being able to legally
    challenge our bills or work.
    They always come back with some clever answer which has been run past their lawyers I know which is why being a leaseholder for a large
    bureaucracy is getting more like living in a Kafka novel but you never know.

    Wendy H

    #4033

    lambda
    Participant

    Thx Paul for your informative reply.

    I guessed as much.

    personally though, It just worries me that there appears to be no accountablility and transparency with little recourse for leaseholders to protect themselves from exploitation.

    Ive lived in a small private block before and even then couldnt convince leaseholders to pool resources together to contest with our freeholder! However that involved minor disputes like block pest control etc.

    Dealing with a gargantuan like Camden, who can annually charge thousands of £ is very intimidating to me and Id be happy to spend a few bob for some sort of protection.

    I really hope my fears are unfounded but just spunding them out given the nature of some of these disvussions.

    thx

    #4036

    Re. payment in advance & challenging (from WendyH). I emailed Mike Edmunds, head of Leaseholder Services earlier today as I thought it a good question and this is what he had to say:

    “Payment of service charges doesn’t impact at all on a challenge, leaseholders pay all of their services in advance, simple example would be caretaking. Reasonableness of a service charge is mainly governed by section 19 of the Landlord and Tenant act 1985. If the service is poor or not delivered the leaseholder is entitled to challenge and seek an adjustment.

    Same applies to major works paid, a tribunal may decide the cost was too high or the works were of poor quality leading to a reduction.”

    I am now reminded that with LVT appeals and now First Tier Property Tribunal (Property Chamber), it is generally recommended to get the work done and keep full documentation as to objections etc. In the worst case where you have a disagreement and go all the way through to appeal which you then lose, you have to pay up and you may not even get the benefit of the work if the project has already completed. Several leaseholders on my estate got burnt this way.

    p.s. Mike doesn’t usually respond this quickly, so I’m not going to guarantee that I’ll get such a quick and forthright answer on any other topic!

    As to Lambda: I totally agree, just no one is currently willing or volunteering to do this. We (the Forum) do strongly recommend people form both Leaseholders’ and Residents’ Associations within your block/estate if possible, as they give different rights and privileges in terms of access to information and powers during disputes. It’s also a wonderful example of sharing knowledge and being stronger together than individually. More information can be found here: https://www.leaseholdersforum.org.uk/guides/

    #4039

    wendyh
    Participant

    Ah yes. I imagined there would be a prompt and totally sealed answer as usual.
    Everything places the onus on individuals to effectively become project managers
    and also understand million pound budgets which , even after having looked at a few
    of them – are so complicated that I would defy anyone to have the time to do any of this
    work.
    I still think paying for a service can been seen as agreeing to the cost .
    Here below from the government website is the section.
    https://www.gov.uk/leasehold-property/service-charges-and-other-expenses

    Disputing a charge
    You may be able to apply to a tribunal if you pay a charge and you:

    think it’s unreasonable
    think the standard of work it relates to is unsatisfactory
    don’t think you should be paying it at all
    Contact Leasehold Advisory Service for advice.

    You can’t apply to the tribunal if:

    NB THIS ONE : you’ve agreed to pay the charge
    ————————————————
    the dispute is already being dealt with, eg by the court
    you pay a fixed charge

    Will then the new bills have a clause mentioning that paying does not constitute
    agreeing to the bill?
    I also got a message from leaseholder services saying that Camden wouldn’t necessarily
    be paying in advance for the work. Meaning really that Camden are using leaseholder
    money for some other purpose before the final payment.
    It is notoriously near on impossible to prove bad workmanship even with the shoddiest of jobs.
    Lakehouse for instance came and painted our doors when they were shut, installed unnecessary
    aerials and the times I listened in to the workmen there were cases of plaster board being
    put up before electrical works had been agreed. I won’t go on.
    Its interesting Mike got back so quick. I wonder why?

    wh

    #4041

    wendyh
    Participant

    quick update. I have just been told by the Assignments Team that the decision
    to bill the capital works as service charges in advance was made as leaseholders
    had requested it.
    I will just leave that here.

    #4042

    alex
    Participant

    Thanks Wendy, Thanks Paul, to have offered some views on my original question, whether or not it is legal and/or acceptable for camden to charge Major works as Service Charges.
    Wendy, do you have more details? who is the assignment team? I cant imagine leaseholders willing to advance the payment for Major Works?! We at una house certainly did not ask for that!
    Finally Paul, do you have any more info on the government better home funding? It is my impression that camden is using the “service charge tactics” to be able to bring incomplete major works back into 2015-16 fiscal year to get the funding. But of course there is no explanation or transparency on this and i believe it is a very very serious issue regarding the use of public money.

    many thanks
    alex

    #4043

    Hi Alex. I’m afraid I don’t have the details – there may be something in the Forum minutes, but I couldn’t guarantee it as items aren’t written down verbatim for reasons of practicality. I would have to suggest reading the minutes for the last few meetings this year and combining that with a Google search.

    My impression is that Camden Council, like many other council I know about, changes/retargets its investment/building and refurbishment strategy depending on what funding pots are available and those pots are deliberately designed to ensure that that happens – it certainly does cause last minute changes as schemes can withdrawn without any notice or have very short application periods. I’m certain it’s a pain in the backside for all concerned. In terms of accuracy in meeting the criteria, I would hope that Camden tries to strictly comply with the criteria because the risks of getting it wrong and having the bill fall on Camden Council itself are too great (whether I’m right or wrong on the latter point may be for the various schemes’ auditors to pick up on).

    Sometimes the funding pots just benefit council tenants (such as kitchen refurbs via Better Homes) and sometimes leaseholders benefit (such as insulation, which I think was delivered via energy companies after directions from central government). At a guess, also sometimes leaseholders pay for the benefits while tenants don’t. All works charged to leaseholders “have” to be justifiable in terms of reasonableness/appropriateness – but at that point people’s views will differ over what is reasonable and what isn’t (especially in terms of how well the works are carried out!).

    #4058

    wendyh
    Participant

    Dear All,
    This came back from the Assignment Team ( which is the team dealing with sales of properties ). They seem to say this forum is actually where leaseholders were calling out for paying their service charge in advance. Is there evidence of this please? Quote below.

    “The feedback we received from leaseholders (more often than not from the leaseholders’ forum) is that they want more regular updates about leaseholders’ liability for major works. I think it’s partly in response to cases where major works final accounts represent a big increase on the original S20 estimate. As a result, we’ve now taken the step of billing leaseholders each year for their share of any major works expenditure we expect to incur and we’ve checked that the lease allows us to do so.”

    #4059

    Hi wendyh. The response you received could have been phrased more clearly. There are two very different parts to the answer you received and possibly they should not be connected by being in the same paragraph.

    “The feedback we received from leaseholders (more often than not from the leaseholders’ forum) is that they want more regular updates about leaseholders’ liability for major works” This was us asking for more information – leaseholders regularly complain to us about bill shock.

    It does not mean that we asked for major works to be billed in advance: we just asked for more information to be made available. Just because the two sentences sit side by side does not mean we asked for this, nor does the response you receive actually claim that we did (but as I as said, it certainly could have been phrased better). So, any decision over billing in advance is a different matter which we were not consulted over as far as I am aware.

    That said, with major works I know that there is a new (permanent) scheme where people can get a 5% discount if they pay towards the beginning of the scheme right at the start or can pay in agreed instalments (but sadly cannot get both the discount and pay in instalments!). The guide for these payment options isn’t ready yet as they have only been recently approved by Camden Council’s Cabinet. The Forum has been promised to have input on the guide in due course (in terms of trying to make it as user friendly as possible).

    Hope that clarifies.

    #4060

    wendyh
    Participant

    hi Paul,

    in a previous mail I was told this:
    “We changed the way we bill for major works following feedback we received from Leaseholders.”.

    when I questioned this the above response came.

    The responses I got from camden clearly claim the change in payment arrangements for Capital Works
    came from ” listening” to leaseholders.
    On questioning this statement which I found very unlikely this was the response I got.

    I just thought it was interesting that Camden are now quoting this forum as a source of information
    for their decisions.Perhaps a warning to those of us posting here too.

    W

    #4073

    FedericoTinti
    Participant

    Hello everyone!

    I am very new to this forum, but I would like to bring your attention to one specific (and important) fact:
    there seem to be a mandatory cap for major works bill for leaseholder of 15k any 5 years.
    Here is the legislation referring to it:
    https://www.gov.uk/government/publications/social-landlords-reduction-of-service-charges-mandatory-and-discretionary-directions-2014
    Now, Camdem council has just exceeded that cap with my last 3 bills and the explanation they gave me is that there are “different schemes” for major works covering different areas (i.e. heating and electricity, external and roofs, lifts, ect.)and the cap applies only to each individual one… (practically making the cap of at least 45K any 5 years…)
    Now I don’t see the concept of different schemes in the text of the legislation… and in my opinion it would be very important to make sure that such cap is upheld… I would be prepared to take this further (Leaseholder evaluation tribunal) and maybe we could do it as a group…
    I would really appreciate to hear your opinion and experiences on this.
    (I will post this also on other treads with similar subjects…)
    If you want to contact me directly: federicotinti@hotmail.com
    Look forward to hearing from you.
    Best,
    F

    #4077

    Hi Federico. One request: Please don’t repost the same item on multiple threads, as otherwise it will overload everyone’s mailbox. Once will be enough as everyone gets alerts on any update (either instantly, daily or weekly).

    p.s. We also don’t recommend posting your email address in public as it tends to attract junk email from other sources. Everyone can message via other (if logged in) via the Message tab in the top right hand corner, but it is your choice.
    Cheers, The Discussion Board Moderator!

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