Following Southwark Council's installation of new windows and some minor decoration in our block, we tenants are facing bills of up to £ 22,000 each. We have sought legal advice, but it seems we have no hope of arguing these exhorbitant charges. The Council even has suggested selling our properties(homes) to cover the costs!
Has anyone any experience in dealing with Southwark Council on a similar matter, and successfully getting the charges reduced to a more reasonable level? We're grasping at straws!
We had notice of major works from Southwark for approx £10k less than a year after buying our flat. We thought that our conveyancing solicitors should have picked up on this during their searches so we are middle of trying to sue them for professional negligence now.
If this doesn't cover your sitaution check that Southwark did everything exactly by the book in your case; I guess that's one way of challenging it.
Southwark have a number of repayment schemes for major works bills and you should not have to sell your flat to pay the bill.
* If you can pay it all off over 12, 24, or 36 months, you can do so interest free.
* If not (and not a lot of people have 650 quid a month lying around spare, which is the monthly amount if you go for a 36 month repayment schedule) then you can pay it off over 10 years, with an interest rate which is presently 6%, I believe. This interest rate is likely to vary with rises and falls in the Bank of England base rate. With this option, Southwark also put a charge on your home to secure the loan, so that if you move within the next 10 years, along with your bank/building society they can claim part of the sale price to pay off the remainder of the money you owe them.
* The third option is not to pay at all, and to have what Southwark call a Voluntary Charge Loan, which in effect simply puts a charge on your property. Then, whenever you sell, Southwark get the 22,000 plus all interest which has accumulated on the 22k. This option is typically used by pensioners who don't have that kind of capital lying around (which of us does?) and whose inheritors will simply receive less money from the sale of granny/grandpa's flat after they have moved on to the Elysian Fields.
Obviously, the non-Southwark route is to go back to your bank/building society and see if they will let you add 22k to your mortgage.
I am in the same boat as you right now, with an approx 24k bill for works to Lewes House, so this is the result of the conversations I've had. I am not happy about the total amount for the work since I think probably 5-7k of this is due to management inefficiencies on the part of Southwark and the contractor, but don't fancy my chances of trying to prove that before the relevant tribunal or court. It is also very easy for those outside a particular trade to underestimate the management costs of doing a particular piece of work. Yes, if you had hired an individual builder to come and do the same works to your flat as Southwark have done to the whole block, you likely would have had a smaller bill, because your builder is not having to manage a much larger contract with more employees, pay tenant liaison officers, or pay the salaries and overheads of the council's bill collection team. S/he might not even be VAT registered or pay his/her employees properly on the books with PAYE and NIC costs to be incurred, let alone have valid liability insurance arranged...
There are likely to be only two ways of getting the charges reduced, both of which depend on if Southwark have miscalculated the bill in some manner.
Either because they have designated what should be an 'improvement' as a 'repair' (leaseholders don't pay for improvements, but do pay for repairs). Installation of double-glazing is specifically listed as a repair, not an improvement, in pretty much all Southwark Right-to-Buy leases, BTW. In the case of Lewes House, it might be open to question, for example, if the total cost of rendering the outside of the block in an insulating 'jacket' is a repair to the brickwork, or if some of the cost should not actually be designated an 'improvement' since it adds to the heat retention of your flat, and (arguably) improves the visual appearance of the block. If you live in Lewes House, it might be worth arguing the toss over this.
Or, because there was some outside financial contribution to the cost of the works, that Southwark have then failed to discount from the total bill for the works, or from the elements of the works that the outside contributor paid for, prior to it being subdivided to calculate what individual leaseholders owe. This has happened in the case of major works to Devon Mansions (on Tooley Street) over the last 5-7 years, where SRB agencies (Pool of London Partnership and Cross River were both involved, IIRC) contributed to the cost of the works since it involved beautifying blocks in an area which was seeing increasing tourist numbers. Many of the leaseholders were sent bills to pay an amount which had not had the SRB contribution discounted from it, and have paid this amount. From what I gather anecdotally, Southwark has been challenged on this by a couple of leaseholders, reduced their bills, but not deigned to tell the other leaseholders what has occurred. This may, of course, lead to complaints to the Local Government Ombudsman and/or the Audit Commission, but that is another story. If the works to your block were entirely paid for by Southwark, this issue will not arise for you, just as they do not arise for me.
Hope this helps!
Edited 2 times. Last edit at 4 November 2005 9.36pm by Andrew.
Thanks for this very informative posting, Andrew. I own a flat in the Aylesbury Estate which, I have heard, is now going to be demolished - or updated. Not sure because it is so big it might be part this and part that. In any case, we HAVE been sent papers about repairs and I shall be much more clued up after reading your piece here. They are for example Gong to be renewing the boilers. I hope we're not going to get clobbered. And, by the way, does anyone know what happens if the DO demolish? We own under RTB.
It may be worth your while going through the breakdown of the actual accounts for the project in detail. The estimated major works programme for our estate was overstated by 20% per property due to inaccurate calculations of the total bill and points allocations for individual properties.
I hope you can help Im faced with the same problem you had with Major Works!!!
My solicitors told me none were planned if i had known major works were planned for 26k i never would have bought my flat i just wondered if you had any luck sueing your solicitor???