Supplementary memorandum by the London
Leaseholder Network (LMW 02(a))
In responding to your document providing an
uncorrected transcript of the one-off hearing on the impact of
large service charge bills for major works on leaseholders, I
refer you to Q 31 which is an invitation to me to provide you
with further information.
I would like you to consider this document as
the response to that invitation.
Leaseholders from 18 London Boroughs have alerted
the London Leaseholder Network to the facts that they have either
incurred or are expected to incur major works bills in excess
of £20,000. At least six of these boroughs have intimated
that some bills will exceed £50,000. In addition in 2 other
London Boroughs namely Bromley and Bexley, leaseholders have confirmed
bills between £10,000 and £20,000, both of these boroughs
have transferred all of their housing stock to Housing Associations
and this may indicate more risk averse landlords. We have confirmed
this evidence through sight of relevant section 20 notices (sec
20 1985 L&T ACT)
Apart from the specific examples I named in
my oral evidence I would particularly like to mention the £40,000
plus bills that are being incurred in the London Borough of Sutton,
these are in low rise properties typically of two storeys, The
bills are for a range of works intended to reduce energy consumption
and production of CO2 gases, such as insulation , external cladding
and double glazing.
It is not possible to quantify the numbers of
leaseholders affected by these bills as the landlords are reluctant
to disclose the details.
For the last five years officers from 21 London
Boroughs have operated what they call a benchmarking club where
they share and compare relevant information. This benchmarking
club operates under code names as it considers that the information
it produces is sensitive. The current chairman of the group is
an officer from London Borough of Lambeth called Ashley Parette.
We believe that this group has ownership of the most detailed
information on the impact of major works charges in London.
A few members of the select committee expressed
a view that leaseholders should have been aware of the likely
impact of maintenance cost before they bought but it is the case
that Parliament has prescribed by regulations (SI 2005 No 1735)
the extent of information that Local Authorities are required
to provide to RTB purchasers of flats, this information falls
short of the information that might alert prospective leaseholders
to possible onerous maintenance costs. Relevant information might
include knowledge of possible structural or design defects and
the fact that some properties of non traditional construction
may be life expired or soon to be so. This featured in an important
court case, Izzard v Field Palmer 1999.
I attach an academic research paper by Sarah
Blandy and Caroline Hunter published by Sheffield Halam University
in 2005 which offers an empirical analysis of this issue.
Shifting risks and changing patterns of tenure,
by Sarah Blandy and Caroline Hunter.
Paper to be presented at the HSA special anniversary
conference 2005, University of York, 6-8 April 2005
http://www.york.ac.uk/inst/chp/hsa/spring05/papers/BlandyHunter.pdf
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