As the General Election candidate for Hackney South & Shoreditch in 2005, the vast majority requests for assistance I received related to housing and almost all those were about poor management. As over 57% of the households in the constituency were rented from either Hackney Council or from Housing Associations you can see how poor housing management could affect a huge number of people.
Issues raised ranged from broken down lifts and secure entry systems which were anything but and it was a constant battle to get these issues attended to. But I also had a large number of cases where leaseholders needed advice on service charge bills. This issue was becoming a big problem as the “Decent Homes” programme accelerated and major repairs were carried out to a lot of estates which had been neglected for many years.
What quickly became apparent was that the leases which had been granted under Right to Buy often contained different rights and obligations on both the Council as landlord and the leaseholders and that those units which remained in the Council ownership had completely different rules applied to them. As a consequence of this, I developed a series of questions for leaseholders to ask when faced with service charge bills and I have reproduced this at the end of this article for any candidate or Councillor faced with this issue.
However, I want to set out an idea which could help to make management much clearer and which would help where estates are re-developed with a mixture of tenures. There is nothing new about this idea as it is built on one of Britain’s great contributions to the world.
A lease is a contract between somebody who owns property and somebody who wishes to occupy that property. Leases have been used for over a thousand years to facilitate this and many of the great “estates” in our cities were built using leases as the mechanism by which property and the environment it was part of were managed.
What I am advocating is the use of leases in all social housing.
It is relatively easy to do where new homes are being built or where estates are being redeveloped and many Housing Associations do this already, but it can also be done with existing estates where a Council or Housing Association can grant individual leases to themselves for each separate home, subject to the existing tenancies and create the situation where all homes in a block have the same lease and all residents, be they tenants or leaseholders, have a clear understanding of their rights and responsibilities and those of their landlord.
This is what already happens in the private sector and the Cave Review which looked in to housing management was clear that private sector management was generally good, in contrast to public sector management which was not.
Granting leases in a standard form makes it easier to manage buildings but they also allow management of whole areas and maintenance of public realm as well as the bricks and mortar of the buildings – the Duke of Westminster still has the right to tell people what colour to paint their front doors and Belgravia looks like it does because that “estate” is actively managed to achieve this.
Standard leases also make shared ownership and “staircasing” up and down the equity ladder much easier as the terms for this can be built in to all leases.
Leases even open up the possibility of competition for management services. Why not tender the management of different estates or even blocks within an estate? Why shouldn’t the Council or Housing Association receive a bill for each of their units, just like leaseholders do now? And where an estate has achieved majority private ownership through Right to Buy or by being built as mixed-tenure, why shouldn’t the “owners” decide on who manages?
There would also be two further advantageous spin-offs to this.
Firstly, there would be a single legal framework for managing all residential property, private or social. The rules which apply now to private sector leases would carry over to public sector ones and quangos like the Tenant Services Authority might not need to exist anymore.
Secondly, the institutions, pension funds, insurance companies etc, might be more willing to invest in social housing if they could understand its management. They don’t now because there is too much uncertainty and too much confusion over who is responsible for what.
The Great British Lease would go a long way to ending that confusion.
Here are those questions.
1. What does my lease say I am liable for and what is the landlord liable for?
2. Did the landlord comply with all necessary statutory notices before commissioning the work?
3. Was the work necessary?
4. Was the need for the work known about when I bought my lease, irrespective of whether it was declared in enquiries before contract?
5. Is the extent of the work a consequence of the landlord failing to properly maintain in the first place.
6. Was the work competitively tendered and the results communicated to leaseholders before the order was placed? (Strict legal timetables apply).
7. Did the project go beyond the tendered price? If so, why? Was the extra cost justified?
8. How have the cost of the works been allocated between leaseholders and the landlord?
9. Do the works include “preliminaries” including access, scaffolding, contractor’s on-site costs and profit and if so, are these being properly attributed to the leaseholders and the landlord? eg. If a leaseholder is not benefitting from “Decent Homes” works, then they should only be charged their “fair share” of the
costs from which they are benefitting and the “preliminaries” should be allocated between the two elements of the work before calculating the amount due from the leaseholder.
10. Are there any improvements as opposed to repairs, which are outside the landlord’s proper responsibility? (There may be a need to build to new Building Regulation standards which are, strictly, an improvement, but cannot be avoided).
11. Is there any “Sinking Fund” – a pot of capital built up to cover infrequent, large bills?
12. Do I need professional advice? Solicitor, Building Surveyor?
13. Is there a “retention”, (money held back under the building contract for latent defects)? If so, can the payment relating to this be deferred until this is paid?
14. Have the works been done properly and has the landlord secured a warranty from which the leaseholder can benefit should they sell? (eg a guarantee for damp-proofing or timber treatment or just a general warranty in respect of materials and workmanship).
15. If the leaseholder does have to pay, can they pay over a period of time?