Thursday 14th October 2004

 

THCH property is leased under broadly two types of lease. A few are older Greater London Council (GLC) leases, but most are the London Borough of Tower Hamlets (LBTH) type of lease or, after 27^th March 2000, the Tower Hamlets Community Housing lease (which is based on the LBTH lease). Even if you have bought your home recently you may have a GLC type of lease. This is because all leases in a block must be the same; if the first lease issued was a GLC lease all other leases issued in that block will be the GLC type.

Even though there are these two broad types of lease there may be slight variations and, in disputes, the only lease that is relevant is the one signed by the leaseholder concerned.

Recent leases are in a slightly different form because of changes in the law. The law says landlords can only make changes to leases that have already been granted if a certain number of leaseholders agree to that change.

What are the differences between the two kinds of lease?

There are small differences between the two leases but the effects are relatively minor. Here are some examples.

• The Tower Hamlets lease says that you should redecorate inside your home every five years. The GLC lease says that you should redecorate every six years.
• If you have a Tower Hamlets lease, you must tell us if you want to sublet your home for more than 12 months. If you have a GLC lease you must tell us if you want to sublet at all.
• If you have a GLC lease, you have to organise any repairs to fences and walls that you are responsible for. In Tower Hamlets leases we are responsible, but we have to pass the cost on to you.
• If you have a mortgage the lease will be with your lender, THCH also have copies of both types of lease and will be able to tell you which type of lease you have.

Summary of what you must do, whichever type of lease you have

• Keep your home in good repair and condition. This includes all fixtures and fittings, water, gas and electrical apparatus, internal tanks, pipes and wires that serve your home.
• Pay your service charge bill, building insurance premium and ground rent within the time THCH set and pay towards major repairs and improvements (there is a separate section on this).
• Give THCH written notice if you are going to sell your home, or sublet (GLC lease) or sublet for more than 12 months (LBTH lease). You must also pay a registration fee of £15 (or as stated in the lease) and sign a deed of covenant. The Deed of Covenant requires the person to whom the property has been sold or sublet to observe and perform the terms of the lease from Tower Hamlets Community Housing.
• Get THCH´s permission before you make any alterations to the structure or outside of your home.
• Allow THCH into your home to carry out emergency repairs which you are responsible for. You have to pay for any repairs we carry out but which you are responsible for. We can also enter a neighbours home to carry out emergency repairs.

Summary of what THCH must do (but the costs may be passed on to you)

• Keep the main structure and outside of your home in good condition. This includes the roof, window frames, outside walls and foundations.
• Keep communal (shared) water tanks, main water and sewage drains, rubbish chutes, lifts, door entry systems and shared TV aerials in good condition.
• Keep communal electric, gas and water supplies to all flats in good condition.
• Insure the building (but not the contents)
• Decorate the outside of the block, including communal areas.

 

The tables below show who is responsible for what. It is not meant to be fully comprehensive. If you need more information please contact your Community Housing Office.

You will have to pay towards the cost of repairs that we are responsible for. The section on repairs and improvements has more information on this.

Repairs that THCH is responsible for

Plumbing

• Burst or leaking pipes up to stopcock serving your home
• Communal water tanks
• Functioning of drainage and sewage

Carpentry

• Roof structure and covering
• Outside window frames
• Broken windows in communal areas
• Entrance doors in communal areas

Electrical - Heating

• Communal electrical heating and hot-water systems (but not fittings inside your home)

Repairs that you are responsible for

Plumbing

• Burst or leaking pipes beyond stopcock serving your home
• Water tanks in your home

Carpentry

• Broken glass windows (including putty and or beading) to your home
• The doors to your home

Electrical

• Electrical wiring in your home
• Electrical and mechanical appliances in your home

Heating

• Your central heating and hot-water systems

Breaches of the lease

THCH will take appropriate action whenever we become aware that a leaseholder is acting in breach of the terms of their Lease. Such breaches could include: -

• Unapproved works
• Improper use of the property
• Failure to maintain or damage to the premises
• Refusal of access to THCH officers
• Harassment or neighbour nuisance
• Failure to pay service charges

In all such cases, THCH will first serve notice on the leaseholder requiring them to remedy the breach. If the breach continues, further action will be taken; this could include seeking an injunction or taking further action against the leaseholder for the forfeiture of the lease. This last step would mean losing your home.

Annual Service Charges

You must pay part of the cost of managing and maintaining the communal (shared) parts of your block and/or estate. THCH will provide you with an estimated bill at the beginning of the financial year. Once THCH´s accounts are finalised (within 6 months after the end of the financial year) we will then send you an actual bill for the financial year. If the actual bill is less than the estimated bill your account will be credited with that amount. If the actual bill is more than the estimated bill you will have to pay the extra amount.

Following the results of a questionnaire sent to all leaseholders and discussions with the leaseholder steering group the service charges were agreed to be calculated as follows.

Services provided

The service charges pay for the following: -

Estate Cleaning Service

This service is responsible for keeping your block and estate clean. This covers your cleaners salary, equipment and clothing. The charge is apportioned per estate and divided by the number of properties on the estate.

Communal boiler maintenance

This service is only applicable to blocks whose heating and hot water is provided by a communal boiler. If so leaseholders contribute towards the boilers maintenance. The charge is apportioned to each block and calculated by the property size.

Bulk rubbish removal

this service removes large items of rubbish e.g.discarded mattresses and furniture dumped on our estates. The charge is apportioned by estate and then divided by the number of homes on the estate.

Chute blockages

this service ensures that the rubbish chutes or underground refuse system are cleared once a blockage has been discovered. The charge is apportioned by block and then divided by the number of properties in the block.

Communal energy (gas)

this charge is only applicable to blocks where the heating and hot water is provided by a communal boiler. The charge covers the cost of the gas used, the charge is apportioned by block and then calculated by property size.

Communal energy (electric)

this covers the cost of electricity for communal estate facilities. This is mainly for lighting shared corridors, estate footways, paths and grounds and replacement bulbs or tubes. This charge also includes the cost of electricity for the lift and door-entry system, if your block has these. This charge is apportioned by block and then divided by the number of homes in the block.

Communal repairs

Entryphone maintenance

this is only applicable to blocks that have a door entry system. The charge is based on the annual expenditure for day-to-day and cyclical maintenance/repairs to the entryphone. The charge is apportioned per block and then divided by the number of homes in the block.

Horticultural maintenance

this charge is based on the cost of maintaining the communal grassed and paved areas within your estate. At the moment THCH has an annual horticultural contract, which includes weeding, pruning, grass cutting, maintenance of flower beds and removal of leaves. This charge has been apportioned by estate and then divided by the number of homes on the estate.

Lift maintenance

this is only applicable to blocks that have a lift. This charge is based on the annual expenditure for day-to-day and cyclical repairs and maintenance to your lift(s). This charge is apportioned per block and divided by the number of homes in the block.

Refuse containers

this is for the hire, replacement or repair of paladin bins, Eurobins or URS. This charge should NOT be confused with refuse collection, which is covered by your Council tax bill. This charge is apportioned per block and then divided by the number of homes in the block.

TV aerial maintenance

this is only applicable to blocks that are serviced by a communal TV aerial. This charge is based on the annual cost for day-to-day and cyclical repairs/maintenance to your communal TV aerial. Please note you will be charged for this service even if you do not use the communal aerial. This charge has been apportioned per block and then divided by the number of homes in the block.

The last two items on the service charges are the costs of officers providing administration services to leaseholders. These are:

Leaseholder costs

this charge covers the cost of providing resources to deal with leasehold issues. The services include calculation and despatch of annual and estimated service charge bills, calculation of final accounts, service charge arrears, investigation and response to service charge complaints, calculation of rebates and account adjustments and other lease related issues.

Costs shared with tenants

this charge covers the cost of works carried out by Community Housing Officers that directly or indirectly benefits leaseholders. Although this does not involve repairs inside your home, it does cover repairs to communal areas, like roofs, walls, windows, landings and sewers. Other duties include the provision of information and statistics to leaseholders and THCH headquarters, managing caretakers and horticultural contract, advice on service delivery, servicing various open meetings and dealing with anti-social behaviour issues and complaints.

The service charge bill will also include a contribution to the building insurance costs and the ground rent due from leaseholders.

The Board decided in November 2000 that service charges for lift maintenance and door entry systems should be divided equally between all homes in the block. The only exception to this rule applies to leaseholders of ground floor flats who transferred from the London Borough of Tower Hamlets and already had exemption from lift maintenance and door entry systems that do not serve their homes.

THCH will ONLY charge leaseholders for costs that are incurred. No attempt will be made to make a profit from service charges due to the rules and regulations of THCH´s constitution and the fact that Tower Hamlets Community Housing is a charity.

Disputes relating to service charges

Leaseholders who believe their service charge bills are incorrect or unjustified should first try to resolve the problem by contacting the appropriate finance officer within THCH. If the situation is not resolved, leaseholders may use the formal complaints procedure open to all THCH residents. In the event that a leaseholder withholds part of the service charge payment whilst a formal complaint is being made, that leaseholder should inform THCH in writing of the amount that they are withholding. If the leaseholder does this, THCH will not seek recovery of the disputed amount whilst the complaint is being investigated.

If the leaseholder belongs to the Tower Hamlets Leaseholders Association (THLA), THCH will allow the THLA to represent the leaseholder if the leaseholder wishes.

Service charge collection

THCH leaseholders can choose from a number of methods to pay the service charges. These include: -

• Standing orders
• THCH Website
• Payment by cheque to THCH offices
• Deductions from salaries for leaseholders who are employees of THCH
• Direct debit
• Telephone banking (but not using switch, delta or credit cards)

 

Service Charge arrears

THCH has developed detailed procedures for recovering service charge arrears. Leaseholders will be sent quarterly information about their service charge accounts. Any leaseholder falling behind with payments will be advised accordingly and appropriate action for arrears recovery will be taken.

This will include seeking an immediate payment to clear arrears or reaching an arrangement with the leaseholder for the repayment of the debt over a number of months. Any appeals will be processed through the THCH formal complaints procedure.

All leaseholders service charges accounts will be reviewed at the end of the financial year. If arrears remain, the leaseholder will be contacted again and encouraged to either make an immediate payment to clear the full amount or to make arrangements to clear the outstanding debt over a period of months. For arrears under £1,000, the leaseholder will be expected to clear the arrears and pay the current year´s charges, by the end of the financial year. For arrears over £1,000, consideration will only be given to spreading payment over periods of longer than twelve months in special circumstances, such as cases of severe financial hardship.

THCH will offer advice about housing and other benefits, which may assist them in maximising their income and/or meeting their service charge liabilities.

THCH will also consider contacting the leaseholders lender in circumstances where a leaseholder: -

• Fails to respond to letters concerning service charge arrears
• Breaks the terms of an agreement to repay the arrears
• Refuses to make service charge repayments
• If the leaseholder is unable to make sufficient payments to meet the terms of a repayment agreement, consideration may be given, with the Lender, to rescheduling the debt or another appropriate course of action.
• Where other courses of recovery action have failed, consideration may be given to instituting legal proceedings. Legal action may include money judgement orders, or, following persistent failure to pay service charges, action for forfeiture, taking into account the requirements of the Housing Act 1996.

Leaseholder Improvements

Any leaseholder wishing to carry out improvement works to their home will first be expected to submit full details of the proposed works, including proof of planning permission and building regulations approval where they are required.

The decision on whether or not to grant a leaseholder permission to carry out such work will be made taking into account whether the proposed improvement will: -

• Make the property or part of the property inherently dangerous or unstable
• Encroach upon the land not defined in the lease
• Prevent light or air reaching other residents
• Be aesthetically undesirable
• Any other relevant considerations

If permission is refused, the reason for the refusal will be explained in writing to the leaseholder.

Cost of Capital Works

THCH will aim to limit the proportion of the costs of capital works, which it passes on to leaseholders wherever possible and as required by legislation.

For schemes funded through the Estates Renewal Challenge Fund (ERCF), THCH guaranteed to limit the cost of the works passed onto leaseholders to £10,000 per dwellings. (Costs above £10,000 are paid from the ERCF government grant.) THCH would seek to provide similar limitations to the cost of works passed on to leaseholders under any other schemes funded with Government Grant in the future subject to the rules applicable to that particular grant. Where no Government Grant is available the actual costs of future capital works will be passed onto leaseholders.

Government regulations require that THCH, when considering any reductions to the costs it passes onto leaseholders, considers each case individually, taking into account: -

• Any estimate of the costs of the works notified to a Right to Buy lessee before the lease was taken out
• Whether the Right to Buy purchase price took account of the costs of the works
• Any benefit which THCH believes the Lessee has or will receive as a result of the works
• Whether the lessee would suffer exceptional hardship in paying the service charge

The guidelines used when THCH assesses exceptional hardship will be: -

• Whether the dwelling is the lessee´s only or principal home
• The total amount of service charges they had to pay or are required to pay since they bought the property or will have to pay
• The amount of service charge payable in the year the lessee applies for a reduction on the grounds of exceptional hardship
• The lessee´s financial resources
• The lessee´s ability to raise funds
• The lessee´s ability to pay over a longer period
• Any other special circumstances of the of the lessee considered relevant

In assessing any possible benefit to the lessee, THCH will take account of any relevant benefit including: -

• Any increase in the value of the lease
• Any increased energy efficiency resulting from the works
• Any improved security resulting from the works
• Any changes to services and facilities resulting from the works

Leaseholders will not be able to opt out of structural works, unless THCH is satisfied that such works have already been done to a satisfactory standard. Leaseholders are able to apply for renovations grants to LBTH where these are available (for example rewiring).

Payment of Costs of Capital Work

THCH aims to recover from leaseholders all the money due from them towards the cost of capital works. THCH will encourage all leaseholders to meet the charge in full or make lump sum payments of the full amount, where they are able to do so. However, THCH will not necessarily insist upon a lump sum payment and will offer leaseholders a range of alternative repayment mechanisms for meeting the costs of capital works for which they are liable.

• THCH will allow leaseholders to pay these sums by instalments over 2 years from the date of the first bill. THCH also commits not to charge interest for this period. The methods of payment will also include: -
• If the leaseholder needs more than two years to pay, THCH will consider this, however, interest will then be charged at a rate set by the Director of Finance for the whole period
• Conversion to a shared ownership lease, where possible and subject to the agreement of the leaseholders lender
• The offer of a second mortgage, where such a mortgage can be secured against the leaseholder property
• Taking out a charge against the property where the leaseholder is unable to make payments
• In extreme circumstances, to reduce the charge under general charitable powers according to the exceptional hardship assessment

Buy back of lease and re-location to alternative accommodation

In the event of leaseholders facing disruption during capital works that makes the occupation of their home difficult either temporarily or permanently, THCH will make appropriate arrangements to ensure the works are completed quickly and that the leaseholder is adequately housed during this time.

This may involve temporary re-location into suitable alternative accommodation provided by THCH wherever possible. If THCH has no suitable accommodation available then we will negotiate with the Council and other social landlords to find suitable accommodation during the course of the works. In most cases this accommodation will be rent free. Where rent has to be paid this should be claimed back on the leaseholders buildings insurance policy.

Where permanent re-location is required THCH will offer a range of assistance which will include: -

• Repurchase at full market value
• Home loss compensation at 10% of full market value in recognition of the personal distress and disruption involved, to a maximum of £15,000.
• Disturbance payments
• Assistance with finding a new home
• Shared ownership
• Other rented accommodation

The assistance offered will depend on whether it is a permanent or temporary decant.

Consultation.

THCH will consult with leaseholders on issues that affect their homes, the management of their homes, capital works and service charges. Some of the consultation is required by law. Other consultation is part of THCH being a resident led organisation, and consultation will be made at all stages of the planning and execution of major works.

The constitution of THCH allows for one of the resident directors on the board to be a leaseholder. This person is elected by the Leaseholder Steering Group (LSG), which is drawn from all the leaseholders in THCH property. THCH will consult with the LSG e.g. the rules for apportionment of service charges. THCH will also consult with the LSG on any major changes in how it intends to deal with leaseholder matters.

In particular, the law (Landlord and Tenant act 1985 as amended by the Commonhold and Leasehold Reform Act 2002) requires THCH to consult with leaseholders on works which will incur costs above a prescribed amount (currently £1000 per block or £50 per flat). THCH must provide leaseholders with a statement of the work required, and estimates of the costs from at least two alternative contractors, before entering into a contract for the work.

The consultation will also cover the extent and cost of services and works which are optional and whether leaseholders require optional work. The consultation would also cover proposed changes to arrangements for maintenance, management or service provision which could have a substantial effect on them.

Where can I obtain more information about leasehold law and rights?

info@lease-advice.org

Website www.lease-advice.org