Dawlish Discussion

There is a story running on BBC Spotlight today concerning 4 leaseholders in a block of otherwise tenanted flats owned by a housing association.

The four leaseholders have each received bills of circa £25,000 each as their contribution towards repair works the housing association, as the freeholder, needs to undertake to the building.  

I do not know how or why these particular four persons are leaseholders (ie home owners) as opposed to being tenants (renters). However that they are leaseholders and not tenants does mean that they are each responsible for contributing to any costs incurred by the freeholder for repair works to the building.

I have seen similar circumstances back in the 1990s when I worked for a council in its housing department and was involved with capital programme work on blocks of flats that the council owned. Those who had RtB'd their (once council owned) flats had to pay their whack towards the capital programme works. These amounts, per leasehold flat, would run into to thousands.

Needless to say they were not happy leaseholders.

Please be warned, and warn others, about these leaseholder costs if you, or anyone you know, gets tempted to buy what is presently a tenanted housing association or council flat.       

If you missed the BBC Spotlight article this link should take you to it.

http://www.bbc.co.uk/iplayer/episode/b06vjwf7/spotlight-11012016

It is the first item covered in the broadcast  

"Charges for major works

There may be times when the cost of work we carry out to your home or scheme cannot be met by the service charge payments you make. In these instances, we will send a separate bill.

This usually relates to major work, which we will have consulted you about prior to sending any requests for payment."

From https://www.sanctuary-homeownership.co.uk/your-rent-and-service-charges

@Lynne wouldn't this be the same for all leasehold properties, whether right to buy or not?

Yes, I agree, as far as I am aware, such a situation applies to all leaseholders.

It was just that seeing the BBC news article (and the amount of money that these leaseholders were being asked to fork out) brought back to me the plight and financial distress that I witnessed of many leaseholders  who had RTB'd their council flats when I worked in housing back in the 1990s.

If the work is just to put a facelift to the outside of the flats then I see no reason why the lease holder should have to fork out for this, just to make the block look nicer.

The reason we have a shortage of properties for those who can't or won't buy their own home is in some part due to the council's attitude to make a bit of cash and get rid of the responsibilty and cost of the council house scheme. Also they allowed generations to transfer the property on to their siblings!

Let's remember that many of those who purchased their homes could qualify for a discount of up to  £77,900 across England, except in London boroughs where it was £103,900. If you kept the property for 5 years you could then sell on the open market for full market value and possibly make a nice profit, without having to pay any of the discount back.

https://www.gov.uk/right-to-buy-buying-your-council-home/discounts

Okay , so whilst it's the case that with the discounts on offer some tenants could, and can, afford to buy, say, their council/housing association flat, it doesn't then necessarily follow  that they can then subsequently afford a bill for £0000s that they might then get from the freeholder for their financial contribution, as leaseholders, for major works needing to be carried out. 

That's the point I'm trying to make.

Buyer beware!

@Lynne - I totally agree with you. I wasn't having a go at your point, just showing the broader picture of the situation. As you quite rightlly state - buyer beware, a worthy point for many purchases in this day and age.