Section 2: London Borough of Tower Hamlets Transfer Proposal

1 What is the proposal?

Tower Hamlets is consulting you about the proposal to transfer the ownership and management of its homes on the Mansford Estate to THCH.

1.1 THCH was chosen for the following reasons:

THCH is small, a Tower Hamlets Based registered social landlord (RSL) that puts residents at the heart of the process. It has an excellent track record on estate regeneration and has delivered what it promised to residents who have already transferred from the Council in respect of refurbishment and housing management.
THCH is accountable to the residents of the Estate they manage. Residents would have extensive input into how the organisation manages their homes and environment.
THCH is a not for profit organisation. This means that any surplus money will be ploughed back into the Mansford Estate.

1.1.1 Stage 1

This stage, which was carried out on Mansford Estate between June 2001 and February 2002 culminated in a referendum on your Estate in March 2002. The referendum established that there was support by the residents for the proposition that alternative proposals for the ownership and management of the Estate be developed.

1.1.2 Stage 2

This stage entailed a steering group of residents from the Estate selecting a partner organisation from a range of social housing providers to become the potential new landlord of the Estate, subject to a ballot of tenants.

The voluntary Steering Group is made up of residents from the Mansford Estate that chose THCH as the partner landlord with which to work on plans to improve the Estate and housing service.

1.1.3 Stage 3

After having chosen THCH as its partner, the resident steering group, the Council and THCH have been working closely together to develop this transfer proposals that are now being put to residents for consideration.

The transfer will only go ahead if a majority of the tenants on the Estate voting in the proposed secret ballot, vote in favour of transfer and the Secretary of State for the Office of the Deputy Prime Minister consents to the transfer.

If the transfer proceeds, THCH would become your freehold landlord and the regeneration of the Estate detailed in Section 2 would begin. Information about THCH is set out in Section 3 of this document.

It is proposed that a ballot of tenants and test of opinion of leaseholders will take place over a period of approximately 2-3 weeks.

The Council is consulting leaseholders separately on the transfer proposals to get their views.

If the majority of tenants who vote are in favour of the transfer, it is proposed that the transfer would take place by December 2005.

If the majority of tenants who vote are not in favour of transfer then the transfer cannot go ahead and the Housing Choice programme for the estate will come to an end.

2 Effects on Leaseholders

3 Rights of leaseholders

You have contractual and statutory rights

3.1 Contractual Rights

Your contractual rights under your lease will remain unchanged.

You will still retain:

the right to make representations to the Leasehold Valuation Tribunal;
the right to be consulted on any proposed works for which under the terms of your lease you are required to make a contribution towards the costs,
and you will of course be required to pay service charges.

3.2 Statutory Rights

Your statutory rights are subject to two changes with regards to Leasehold Enfranchisement and the extension of your Lease:

3.2.1 Right to enfranchisement ended

If your new landlord is a charitable Housing Trust (as THCH is):

you will not be able to exercise your right to collective enfranchisement
or to extend your lease under the Leasehold, Housing and Urban Development Act 1993 (as amended).

3.2.2 THCH would allow enfranchisement under certain circumstances

THCH will consider allowing enfranchisement and will respond to applications for collective enfranchisement from leaseholders who would have been eligible under the above legislation but for the charitable status of THCH.

Any decision would also take into account how enfranchisement would impact on tenants living in the block affected and the impact on any works which THCH has proposed to carry out on behalf of both tenants and leaseholders.

3.2.3 Right to lease extension ended, and THCH will still allow you to extend your lease

In respect of extensions of your lease, THCH will contractually commit to allowing such extensions in the same way as defined in the afore-mentioned act, as amended from time to time

If the transfer goes ahead, the lease you have now would remain unchanged, except that THCH would become the owner of the freehold instead of the Council. You would not be issued with a new lease, but rather both you and THCH would be bound by the terms of your existing lease granted by the Council.

3.3 Your existing lease would continue to include:

Details of the items included in the service charge, including how it is calculated and when it is due.
The procedure for assigning (transferring) the lease.
How the lease can be ended.
Details of the respective responsibilities of the leaseholder and THCH.

3.4 Leaseholders will:

keep their statutory rights to be consulted about the nature and cost of proposed works.

3.5 THCH will

ensure that value for money is obtained from property insurance and that you get the benefit of any bulk discount THCH receives

4 Leaseholder Test of Opinion

The Council plans to give all leaseholders on the Mansford Estate the opportunity to express their views in a separate Test of Opinion held at the same time as the tenants ballot.

For legal reasons, the leaseholders and tenants votes cannot be merged.

It is the result of the ballot that determines whether or not an individual transfer can proceed. For legal reasons, leaseholders cannot take part in the ballot of secure tenants.

If the transfer proceeds, THCH would become your freehold landlord and the regeneration of the Estate detailed in Section 3 would begin.

Information about THCH is set out in Section 4 of this document.

5 Why is the Council Proposing Transfer?

6 Why can't the Council Invest what is needed?

The Council is a public body,

There is currently a limit on how much it is able to borrow to fund housing projects. This is because Council borrowing affects the level of the Public Sector Borrowing Requirement, which the Government controls tightly.

The Government has recently introduced change to the rules on Council borrowing, but this relaxation of the rules does not help the Council in its ability to raise the funds necessary to carry out the works of repair and improvement needed on the Estate.

7 Why Would THCH be in a Better Financial Position?

THCH would be in a better financial position because:

It has more freedom to borrow money to pay for the works and to pay this money back over a longer period.
Unlike the Council, THCH would be able to use all the money it receives from Preserved Right to Buy sales on providing homes and services.

8 The Key Benefits of the Transfer

The key benefits of the transfer (if it goes ahead) would be:

Residents would have a direct say in the management of the estate through the Bethnal Green Area Resident Board which elects a Tenant Director to the Main THCH Board and through the THCH Leaseholder Steering Group, which elects a Leaseholder Director to the Main THCH Board.
Better value for money.
The provision of an efficient, local, responsive service in the day-to-day management of homes, estates and community facilities.

9 What Would Happen if the Transfer Does Not Go Ahead?

If the transfer does not go ahead, you would remain with Tower Hamlets Council as your freehold Landlord.

The Council will not undertake the proposed improvement and redevelopment programme.

It would seek to address urgent health and safety repairs from its limited capital budget and to continue normal arrangements for day-to-day repairs and limited works.

10 What is the Timetable for Consultation?

A summary of the timetable is as follows:

10.1 Formal Consultation Period

The Council will issue the formal consultation documents and begin an intensive programme of resident consultation.

This will include meetings and visiting residents in their homes.

Residents will be asked to feed back their views to the Council during this period.

10.2 At the End of Formal Consultation

The Council and THCH will consider the views of residents and discuss how and if these should be taken into account.

10.3 "Stage Two" Notice Period

The Council will send a letter to residents telling them of the outcome of the consultation, This letter will say:

Whether or not the Council is going to proceed to a ballot and test of opinion
Whether or not it is going to make any changes to the formal offer and/or Notification as a result of residents' views

It will also explain that the letter marks the start of the 28 day period for tenantsresidents to lodge any objections on the offer/notification with the Office of the Deputy Prime Minister

10.4 Ballot Period

If the Council has decided to continue with the process, then the postal ballot for tenants and the postal test of opinion for leaseholders will be conducted by an independent organisation called Electoral Reform Ballot Services.

It should be noted that the leaseholder ballot is only an advisory ballot.

10.5 Ballot Results

The results will be announced to the Council by the Electoral Reform Ballot Services.

The Council will then inform residents.



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THCH is accountable to the residents of the Estate they manage. Residents would have extensive input into how the organisation manages their homes and environment. THCH is a not for profit organisation. This means that any surplus money will be ploughed back into the Mansford Estate. 1.1.1 Stage 1 This stage, which was carried out on Mansford Estate between June 2001 and February 2002 culminated in a referendum on your Estate in March 2002. The referendum established that there was support by the residents for the proposition that alternative proposals for the ownership and management of the Estate be developed. 1.1.2 Stage 2 This stage entailed a steering group of residents from the Estate selecting a partner organisation from a range of social housing providers to become the potential new landlord of the Estate, subject to a ballot of tenants. The voluntary Steering Group is made up of residents from the Mansford Estate that chose THCH as the partner landlord with which to work on plans to improve the Estate and housing service. 1.1.3 Stage 3 After having chosen THCH as its partner, the resident steering group, the Council and THCH have been working closely together to develop this transfer proposals that are now being put to residents for consideration. The transfer will only go ahead if a majority of the tenants on the Estate voting in the proposed secret ballot, vote in favour of transfer and the Secretary of State for the Office of the Deputy Prime Minister consents to the transfer. If the transfer proceeds, THCH would become your freehold landlord and the regeneration of the Estate detailed in Section 2 would begin. Information about THCH is set out in Section 3 of this document. It is proposed that a ballot of tenants and test of opinion of leaseholders will take place over a period of approximately 2-3 weeks. The Council is consulting leaseholders separately on the transfer proposals to get their views. If the majority of tenants who vote are in favour of the transfer, it is proposed that the transfer would take place by December 2005. If the majority of tenants who vote are not in favour of transfer then the transfer cannot go ahead and the Housing Choice programme for the estate will come to an end. 2 Effects on Leaseholders 3 Rights of leaseholders You have contractual and statutory rights 3.1 Contractual Rights Your contractual rights under your lease will remain unchanged. You will still retain: the right to make representations to the Leasehold Valuation Tribunal; the right to be consulted on any proposed works for which under the terms of your lease you are required to make a contribution towards the costs, and you will of course be required to pay service charges. 3.2 Statutory Rights Your statutory rights are subject to two changes with regards to Leasehold Enfranchisement and the extension of your Lease: 3.2.1 Right to enfranchisement ended If your new landlord is a charitable Housing Trust (as THCH is): you will not be able to exercise your right to collective enfranchisement or to extend your lease under the Leasehold, Housing and Urban Development Act 1993 (as amended). 3.2.2 THCH would allow enfranchisement under certain circumstances THCH will consider allowing enfranchisement and will respond to applications for collective enfranchisement from leaseholders who would have been eligible under the above legislation but for the charitable status of THCH. Any decision would also take into account how enfranchisement would impact on tenants living in the block affected and the impact on any works which THCH has proposed to carry out on behalf of both tenants and leaseholders. 3.2.3 Right to lease extension ended, and THCH will still allow you to extend your lease In respect of extensions of your lease, THCH will contractually commit to allowing such extensions in the same way as defined in the afore-mentioned act, as amended from time to time If the transfer goes ahead, the lease you have now would remain unchanged, except that THCH would become the owner of the freehold instead of the Council. You would not be issued with a new lease, but rather both you and THCH would be bound by the terms of your existing lease granted by the Council. 3.3 Your existing lease would continue to include: Details of the items included in the service charge, including how it is calculated and when it is due. The procedure for assigning (transferring) the lease. How the lease can be ended. Details of the respective responsibilities of the leaseholder and THCH. 3.4 Leaseholders will: keep their statutory rights to be consulted about the nature and cost of proposed works. 3.5 THCH will ensure that value for money is obtained from property insurance and that you get the benefit of any bulk discount THCH receives 4 Leaseholder Test of Opinion The Council plans to give all leaseholders on the Mansford Estate the opportunity to express their views in a separate Test of Opinion held at the same time as the tenants ballot. For legal reasons, the leaseholders and tenants votes cannot be merged. It is the result of the ballot that determines whether or not an individual transfer can proceed. For legal reasons, leaseholders cannot take part in the ballot of secure tenants. If the transfer proceeds, THCH would become your freehold landlord and the regeneration of the Estate detailed in Section 3 would begin. Information about THCH is set out in Section 4 of this document. 5 Why is the Council Proposing Transfer? 6 Why can't the Council Invest what is needed? The Council is a public body, There is currently a limit on how much it is able to borrow to fund housing projects. This is because Council borrowing affects the level of the Public Sector Borrowing Requirement, which the Government controls tightly. The Government has recently introduced change to the rules on Council borrowing, but this relaxation of the rules does not help the Council in its ability to raise the funds necessary to carry out the works of repair and improvement needed on the Estate. 7 Why Would THCH be in a Better Financial Position? THCH would be in a better financial position because: It has more freedom to borrow money to pay for the works and to pay this money back over a longer period. Unlike the Council, THCH would be able to use all the money it receives from Preserved Right to Buy sales on providing homes and services. 8 The Key Benefits of the Transfer The key benefits of the transfer (if it goes ahead) would be: Residents would have a direct say in the management of the estate through the Bethnal Green Area Resident Board which elects a Tenant Director to the Main THCH Board and through the THCH Leaseholder Steering Group, which elects a Leaseholder Director to the Main THCH Board. Better value for money. The provision of an efficient, local, responsive service in the day-to-day management of homes, estates and community facilities. 9 What Would Happen if the Transfer Does Not Go Ahead? If the transfer does not go ahead, you would remain with Tower Hamlets Council as your freehold Landlord. The Council will not undertake the proposed improvement and redevelopment programme. It would seek to address urgent health and safety repairs from its limited capital budget and to continue normal arrangements for day-to-day repairs and limited works. 10 What is the Timetable for Consultation? A summary of the timetable is as follows: 10.1 Formal Consultation Period The Council will issue the formal consultation documents and begin an intensive programme of resident consultation. This will include meetings and visiting residents in their homes. Residents will be asked to feed back their views to the Council during this period. 10.2 At the End of Formal Consultation The Council and THCH will consider the views of residents and discuss how and if these should be taken into account. 10.3 "Stage Two" Notice Period The Council will send a letter to residents telling them of the outcome of the consultation, This letter will say: Whether or not the Council is going to proceed to a ballot and test of opinion Whether or not it is going to make any changes to the formal offer and/or Notification as a result of residents' views It will also explain that the letter marks the start of the 28 day period for tenantsresidents to lodge any objections on the offer/notification with the Office of the Deputy Prime Minister 10.4 Ballot Period If the Council has decided to continue with the process, then the postal ballot for tenants and the postal test of opinion for leaseholders will be conducted by an independent organisation called Electoral Reform Ballot Services. It should be noted that the leaseholder ballot is only an advisory ballot. 10.5 Ballot Results The results will be announced to the Council by the Electoral Reform Ballot Services. The Council will then inform residents. 10.6 Transfer



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