Rats, roofs and repairs

What tenants (in England) think of their landlords is something published today by the new social housing regulator, the Tenant Services Authority.

It is good to see the concerns of tenants in black and white – what one person described to me in the work I did with the National Housing Federation and others on “What Tenants Want” as ‘rats, roofs and repairs’… and ‘respect’ as another added.

In the current economic climate, though, there is also a concern beyond basic services about the viability of some of the social landlords. After all, what happens to tenants if a housing association goes bust?  The answer appears to be that either tenants transfer to a new social landlord if this is agreed as a take-over, or that if assets did revert to the money men, then tenants could face rent rises up to market levels… I trust the new regulator is on top of this too.

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2 thoughts on “Rats, roofs and repairs

  1. You may have heard roumurs in the press about rip off property managing agents inflating surcharges such as it insurance premiums in fact they inflate these by upto a 1000% this affects the millions of us that live in privately owned flats Please contact me for more details Now Angry Leaseholders Kick Back At MANAGING AGENTS
    Owners of leasehold flats are paying up to double the market rate for buildings insurance because
    MANAGING AGENTS ARE INFLATING PREMIUMS.

    In addition to this article the subject was discussed on radio 4 on the 21st May 2009

    Flat owners could be paying up to double the best rates for buildings cover, thanks to hidden commission being shared out between brokers and managing agents, reports Jamie Elliott

    * Jamie Elliott
    * The Observer, Sunday 1 March 2009
    * Article history

    Owners of leasehold flats are paying up to double the market rate for buildings insurance because the property agents who manage their homes. Are inflating premiums

    In a bid to secure business, some managing are choosing the insurer that pays the most commission, instead of the company that offers the best value –

    Insurers who pay the most commission are often also those who charge the highest premiums. Although leaseholders bear the extra cost, they rarely find out about the inducements because there may not be an invoice and the inducements do not appear on their service charge statement or other documents.

    Insurance broker Neil Cook, of Kay International , told Cash he is being approached by increasing numbers of leaseholders who are being charged significantly above the going rate.

    “I see a lot of inflated premiums for blocks of flats where it just doesn’t add up, and there is no way the broker has sought the best deal,” he says. “Sometimes it is as much as double but, typically, the premium is about 30% above what you would expect to pay.”

    One leaseholder, who does not want to be named, learned he was paying over the odds only after he and other residents took over the management of their south London flats in October last year.

    “When we got hold of the paperwork we saw that the company that managed the block was paying £6,632 a year for buildings insurance,” he says. “Without too much difficulty, we managed to get the premium down to £3,731.”

    Managing agents that arrange insurance are regulated by the Financial Services Authority. Its rules say a firm must, if asked by a customer, disclose any commission it receives and “pay due regard to the interests of its customers and treat them fairly”. But, because leaseholders are not the policyholders (that is usually the freeholder), the FSA does not consider them to be “customers” of either brokers or managing agents, so they are not protected. “Mostly, leaseholders would be considered third parties to the contract and our rules are of limited assistance to them,” said an FSA spokesperson.

    An alternative option for leaseholders who think they are being overcharged is to take their case to the Leasehold Valuation Tribunal (LVT), which adjudicates on whether service charges, including insurance costs, are “reasonably incurred”. Last year, the LVT received 2,141 applications concerning insurance charges and other leasehold management issues, up 20% on 2007.

    However, flat-owner Bilal Farid warns that simply getting access to insurance paperwork can be difficult. He wanted to see details of costs after discovering that he, and other leaseholders, were being charged far above the market rate to insure their block of 10 flats.

    “The managing agent kept refusing to send me a copy of the insurance schedule, so eventually I went round to their offices,” he says. “They got agitated and first of all refused to show it to me and then said it was in a different office.”

    Farid has still not seen the document, but in March last year, he and his neighbours took over the management and, with just a few phone calls, cut the annual premium from £2,700 to £1,875. Leasehold law specialist Nicola Stewart, of Rooks Rider solicitors, says leaseholders should persist when information is withheld. “Your annual service charge statement should specify the cost of insurance and if it does not, you have a legal right under the 1985 Landlord and Tenant Act to ask for this information.”

    You can contact Neil Cook on 0208 850 9697

  2. And the irony is this.. especially for council leaseholders.. the only legal option open to them is the LVT leasehold valuation tribunal, however this cosst a considerable amount of money which you may not get back, unless you want to risk going to court, with a trainee solicitor, should you choose to take the free help offered by the leasehold valuation service.

    There is a serious question mark over this course of action against a local authority, because the local authority will not disclose the financial documents needed to prove leaseholders are being ripped off, firstly because they are frightened of a precedent being set and the floodgates being opened for a barrage of cases. AND they know that the leasehold valuation tribunal is powerless to do anything when they blatantly disregard TRIBUNAL DIRECTIONS TO PROVIDE DOCUMENTATION.

    Something i have experienced first hand and others are also reporting on.

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