Refurbishment costs for leaseholders in Brockley

Back in July, we reported:

"Lewisham Council has signed a £296 million [PFI] deal to do up nearly 2,000 council-owned homes in Brockley.

"A group of private sector companies is going to refurbish the council’s housing estates and street properties, including homes owned by leaseholders."

Evidently, the first letters, informing leaseholders of the costs they will have to meet, have started dropping through the letter boxes, prompting one reader to write:

"For our house (classified as a block of 2 flats) we're facing professional fees of over £7000 and scaffolding costs of nearly £5000 before any work of any description is done. Remember that there around 600 leaseholders in Brockley PFI - not all are in streets but even so why does it cost £7000 per house for professional fees?

"We've also read in a Lewisham Council report of the scrutiny committee for Housing, that there are plans to massively increase leaseholders service charges to claw back the ongoing costs of the PFI project. The figure we've seen is £750 a year per leasehold in Brockley PFI-it's not clear whether this will be applied to everyone regardless of what services they receive. At the moment we pay £100 a year so this is a MASSIVE increase!"

BC regular "James" has contacted Regenter's local office, for clarification, and was told that all costs will be capped at £10,000 - including professional services, scaffolding, and any works undertaken and that the lease will not be going up.

We hope that Sue Luxton and Dean Walton may be able to shed more light on this matter - or that someone from Regenter contacts us directly. We will be investigating this issue further, but in the mean time, if you have been contacted by Regenter, please let us know what costs you have been told you face.

27 comments:

James said...

Thanks for kicking this off Nick. Reported costs much higher than expected is enough to worry anyone with a Lewisham council leasehold.

I hope some more leaseholders who have their costs will share this information (or anyone with firm news about the lease increases)- as many of us are in the dark about the PFI.

Once we have more knowledge we will be able to ascertain whether setting up a leaseholders group is a worthwhile exercise...might not be a bad idea in any case..

Anonymous said...

what is a pfi?

Anonymous said...

Am I understanding this correctly in that the council is going to use public money to renovate council owned homes?

Assuming the occupants are long term occupants of these homes with a future potential 'right-to-buy' option, isnt it only fair that as sole beneficiaries of this spend the tenants contribute towards the cost?

Do the tenants of Council homes have to pay rent and if so how does this compare to paying rent in private rental accommodation?

As I dont live in a Council home i genuiunely don't understand the process.

Headhunter said...

PFI = Private Finance Initiative. Allows local and central government to finance large projects like this through funding from private companies which does not appear as standard borrowing on their balance sheets (as far as I understand), and transfers some of the risk inherent in these projects to the private sector. See also PPP and the Tube (Metronet et al)...

Anonymous said...

Rerubishment? Is that a Freudian slip or what?! Hee.

Brockley Nick said...

Whoops - well spotted!

No offence intended...

James said...

The council tentants will receive refurbished housing - new bathrooms new kitchens etc) Those who live in ex-council flats (like ex right to buy), leaseholders, will see their buildings repainted, and other exterior works - but no interior works as they now own the property.

Their will, of course, be no charge to those in social housing. However, those with leases will receive charges - and there is a worry that these charges are will be excessive.

For example I live in a Victorian house in the conservation area. I am the leaseholder (or own) two floors. The other two floors have a council tenant. So far, so good. The tenant will have their flat refurbished - bathroom, kitchen, electrics, double glazing etcs. We will both have the windows painted and any other work (roof...doors etc) that is seen as being needed. Also fair enough.

However I will end up for the costs for my share - not arguing that point either. But it is the amount being charged for that share that is the concern. Some have been mentioned huge admin fees and excessive costs for scaffolding etc.

Kate said...

No time to get into this in detail but just a quick note - this has been an issue for leaseholders around the country for several years now, since the government's Decent Homes programme kicked off in fact. Some leaseholders have done better than others at reaching a compromise with their councils.
Getting a leaseholders' group together would definitely be a good first step.

The following link (and other stories on the same site) might be of interest ...
http://www.insidehousing.co.uk/news/article/?id=1449314

Sue Luxton said...

I have already been contacted by a leaseholder in a similar situation to James and am awaiting further explanation from B3 (the PFI consortium) and Lewisham Council as to whether the breakdown of charges is correct. My understanding is that charges for leaseholders are capped at £10,000 and should be proportionate to their share of the total cost of work.

Anonymous - it's not Council money, it's private investment that Lewisham Council will be paying back with interest over the next 20 years. I don't think PFI is the best value for money for the taxpayer, but national government likes it and will give money towards bringing properties up to decent homes standards if Councils go down that route. More info on Brockley PFI at: http://tinyurl.com/36bndr.

Yes, of course Council tenants pay rent, though it is generally less than in the private sector. I don't think anyone renting in the private sector would expect to contribute towards their landlord's refurbishment costs and it is unreasonable to expect Council tenants to do so. Leaseholders of Council properties, like leaseholders of private properties are however expected to contribute, but clearly this needs to be reasonable costs.

Cllr Sue Luxton (Green Party, Ladywell Ward)

Lone Ranger said...

I'm sure questions regarding charges to leaseholders have been raised at council meetings, possibly 2 years ago. Leaseholders on an estate in Lewisham were initially told the charge would be £7,000 but it rose to over £20,000.

I believe there is assistance available if the charges are above £10,000.

PFI's do seem to be costly for example the council recently abandoned the Chrysler PFI housing scheme because it was estimated to cost an additional £2.5m merely to set up.

Lone Ranger said...

There are some newsletters relating to the Brockley PFI, in the June 2007 edition it states...

leaseholders would have to pay their contribution to any communal works as they do now. In most cases this will be limited to a maximum of £10,000 in any five year period. As now, leaseholders will be notified in advance of their expected contribution and will be given the opportunity to comment on the proposed works.

Who decides if more than £10,000 should be charged isn't clear.

http://www.lewisham.gov.uk/Housing/DecentHomes/BrockleyPFINews.htm

In Downham there has been a stock transfer of 6300 council properties to a board of tenants. Reading comments on the News Shopper website some tenants see it as a chance to wallop leaseholders, but that's Downham.

Lone Ranger said...

Just checked the council website, it was the Meadows Estate in September 2006 where leaseholders raised questions about charges and fees.

Lewisham Homes (ALMO) plans to apply for £145m to spend on 16,000 properties to bring them upto Decent Homes Standard.

Using a similar formula for the 2,068 homes in the B3 PFI produces a figure of £20m. Leaving to be spent £275m or £1.4m per property.

patrick1971 said...

As kate said, this has been an issue for ages. I know about five years ago in Southwark it was a very hot issue, and there was a well-organised group which tried to get the council to justify the costs. This was in the days before FOI so they didn't have much luck IIRC. But an organised group could have more luck getting info out of Lewisham. £12K before any actual work is done seems ludicrous.

Ricky said...

Hi Nick (and Sue!)

I'm relieved to find that we're not alone in our predicament.

My fiance and I bought a flat on Brookbank Road in May 2007 and soon after started to realise just what we'd got ourselves into.

We own the top floor of a two storey terrace. The neighbour downstairs is a council tenant. We've received a 'Section 20' detailing the costs, and the total estimated bill for our share of came out as over £16,000. But our contribution is indeed capped at £10,000 over any five year period. We've had this confirmed many a time.


The section 20, however is a complete waste of time. It's NOT a proper estimate - it's more like a statement of the maximum POTENTIAL costs. Not all of the work outlined on the section 20 will be done, but they can't be sure without a full survey (including erecting scaffolding to assess the whole buidling).

We had to go and meet Higgins in person to find out exactly what needs doing to our house and why.

The work which is required on our property includes replacement PVC windows + front door, new roof, loft insulation, scaffolding and "professional fees".

"Professional fees" make up a bigger share of the total cost than any of the actual work, at around £3,500. £3,500! And for what exactly?? When we asked Higgins, they told us these fees pay for the cost of setting up the Brockley PFI offices at 6 Mantle Road, for surveyor costs etc. If that's the case, then leaseholders are effectively paying for the services which council tenants are receiving. This is not acceptable and we will be rejecting this cost in our response to the section 20 unless the PFI can provide us with a detailed cost breakdown of where these "professional fees" are going.

In our experience, the whole process has been anything BUT professional.

Sandy@pylos said...

Really glad that people are starting to discuss this. Just to say that any work done to leasehold flats in Brockley PFI must be shown to "reasonable" by the council in terms of the lease (this is the legally binding document - not Decent Homes which is a policy not legislation) and the final costs also have to be "reasonable" as does the standard of the work. Many of the costs on the Section 20 notices raise many questions about reasonableness (no legal definition of this but lots of case law). We don't think much of what's on our section 20 notice is reasonable and intend to challenge this and we also don't intend to have UVPC windows or replacement doors (which would involve ripping out period features including leaded lights and wooden sashes as we live in a victorian street property). There's lot of advice out there for leaseholders - first stop should be the Leasehold Advisory Service (government funded organisation for leaseholders) - see their website for lots of helpful information at http://www.lease-advice.org.uk/ We've got an appointment with one of their solicitors (advice is free) to go through our lease to find out what we can challenge legally using the Leaseholders Valuation Tribunal if necessary (informal tribunal to judge leaseholder disputes). In fact there's a major case involving Lewisham council coming up at the LVT in April when leaseholders of 5 blocks in the Meadows Estate, Downham are challenging 12 years of service charges including charges for major works. Besides this we can invoke the complaints procedure (except Regenter B3 don't have a complaints procedure that I can find so we'll have to find one at Lewisham) to question procedure, proposed work, costs and also lobby ward councillors, mayor, MP, local newspaper etc. Think a leaseholders group for Brockley PFI is an excellent idea to stave off the worst excesses. In the meantime, make sure you respond to the section 20 notices questioning all the costs and the necessity for the work and exactly what they're planning to do under each heading. Get a surveyor to do a report for you on proposed work if you're in any doubt about extent or whether it needs doing so you have evidence of the state of your property from an independent source. Keep a paper trail and buy a big file as it's likely to be a long haul!

Sue Luxton said...

I've had a response to the enquiry I made on behalf of a leaseholder in Ladywell. An edited version of the response is below, FYI. Basically, as I understand it, you need to question and seek clarification on any parts of your section 20 that seem unreasonable as mistakes are made, as in this case, and sometimes it is based on various assumptions about what work needs to be done, rather than a survey. Professional fees are dependent on what work is carried out TO YOUR PROPERTY (not the costs of running the Mantle Road office) and leaseholder charges are dependent on what services you receive, eg caretaker for communal areas.

Dear XXX

Regenter B3 Refurbishment – Section 20 notification.

Thank you for your correspondence to both Regenter B3 and Councillor Sue Luxton regarding works to your home under the Decent Homes scheme. I have been asked to look into the concerns you have raised in relation to this matter and respond to you directly.

I am sorry that you have had cause to raise concerns about the Section 20 Notice that you received. I note your queries relating the work and costs detailed in the notice.

I would like to extend my apologies for any confusion or distress caused by this Section 20. Regenter B3 has confirmed that a survey has now been completed at XXX ABC Road to review the need for refurbishments at the property.

I note that you have decided to replace the windows to your property at your own cost. Regenter B3 have confirmed that you can do this. However, you must seek planning permission and all work must be completed by 30 July 2008. This is to ensure that the work complies with the terms of the refurbishment and ensures that we are not subject to any penalties for late completions.

The recent survey carried out by Regenter B3’s building surveyor has identified that no works are required to the common areas (external walls, roofs etc) of this converted property. I am also advised that there are no common entrance halls or water storage tanks. As a result no works to the externals or common areas are to be completed by Higgins for Regenter B3.

The professional fees are based upon the value of the works to be carried out and as no works are identified, this item is no longer applicable to this property.

Regenter B3 has confirmed that the section 20 notification for your property will be zero in this instance.

Finally, I note in your email of 20 January 2008 you have raised concerns about service charges for leasehold properties being increased to £750 per year to cover the cost of Regenter B3’s refurbishment programme. Regenter B3 have advised that this information is incorrect. The Day to Day service charge is set around the services leaseholder’s receive on a day to day basis (i.e. caretaking, cleaning, communal lighting or gardening). However, if you do not have these services you will not be charged for them.

I hope the above fully addresses all of your concerns.

Yours sincerely

Anonymous said...

A leaseholder of Algiers Road is featured in the local press with estimated costs of £14,000 from Regenter B3.

This is £3,500 for roof work and replacing original doors and 8 windows with uPVC alternatives.

Professional fees are £3,926.

Last week other residents of Algiers Road complained they wanted to retain wooden windows rather than have uPVC.

Maybe it's me but I don't like the idea of a company with a commercial interest deciding what work needs to be done and have the authority to carry out the work and demand payment.

Leasholders can ask for a detailed breakdown of the costs and maybe should form a group to compare estimates.

Are the professional fees 'steep' or the norm for a £10,000 project?

Headhunter said...

I wrote a comment about this somewhere - perhaps attached to another article, but can't find it any more. These costs often appear to be open to negotiation, the private firms involved often seem to try to sting leaseholders for as much as possible but back down if challenged. A friend of mine bought a flat in Denmark Hill in a more standard council block. The solicitor involved in the conveyancing identified that the flat was under a section 20 notification and negotiated for the seller to cover these costs. the bill (mainly for uPVC glazing ended up at £8k, but acc to my friend with some haggling and discussion it came down to £4k!

Ricky - I am suprised the solicitor you used for conveyancing on your flat purchase did not identify the fact that there was a section 20 looming on your flat in Brookbank Rd. It's well known that under the Decent Homes thing that all local authority owned buildings have to up to a certain standard by 2010.

I'm sure he or she should have looked into that. You should investigate - you may have cause to reclaim fees from the solicitor if he or she didn't do the full job.

I sold my ex local authority flat in Islington in 2006 before I moved to Brockley, mainly because I knew that there would be a huge section 20 bill coming my way (which I had not been aware of when I bought the place in 2004). Even though the section 20 was not due til 2009 or something, the solicitors for my buyers went to great lengths to try to get full details of projected costs, dates etc etc from the council before the sale went through so that their clients were fully aware of what they were getting themselves into. Happily for me they still wanted the flat.

Anonymous said...

Guys, We've just been through this whole Process with Lewisham Homes in Deptford, and I can only describe the whole experience as a nightmare. Our estimates in the orig Sec 20 notice in 2006 was $4,500 - our final bill came in at £7,000, a 54% overrun. We weren't organised as a resident body, and all the tenants got completley screwed over with outrageous delays from beginning to end. The only consolation for them, and it's a major one, is they don't have to pay for it. Pity the leaseholders who get the same crap service and then have to stump up £7k for it.

Comunication was non existent. These Section 20 notices are a complete joke - no information about what is being planned or why. Community engagement is non existent also. There are very few leaseholders where I live, and Lewisham Homes have been shockingly incompetent with meeting our requests for information. Basically stalling the whole way - I've made myself available for numerous meetings to review documentation and evidence that the work was completed and still nothing. I actually do not know what I'm paying the £7,000 for as the only infor was the 2 word references in the subject line of the Sec 20 notice. Thats the only info you get. You can't even see any visible effects of the work, none of it was decorative - it was all roofing (tho we never had any leakage probs), mains supply rework, drainage and professional fees. The Drainage is a joke because after sepdning £10,000 on the block everytime it rains the place gets flooded. It's enought to make me cry. Don't trust the contractors they hire - there have been neverending delays, and incompetence from them also. Saltash - is the name of the co - if they get nominated - object. Awful. I have to say, my attitide from the beginning was if work needed to be done, it needed to be done. My problem is with the lack of communication and engaegement, and lack of accountability to leaseholders.

Guys what ever you do, get your shit together, get organised, and get organised fast. You're going to have to fight every inch of the way to get anybody accountable or to find anyone half way competent at Lewisham homes. In my opinion it's an ineffeicnet bureaucracy incapable of making decisions in leaseholders interests or delivering value for the taxpayer or leaseholders. Do yourselves and the country a favour, and get yourself into a committee, and you should be able to get leaseholder representation on the committess to oversee the progreess and quality of the work. You just have to really push hard to stay on top of these guys. It's really, really tough. It takes time and enormous personal effort to stay on top of these guys. Best of luck.

Completely disillusioned John in Deptford

sandy.pylos said...

Just so everyone knows we have now set up the Brockley PFI Leaseholders Association. There's around 60 leaseholders involved at present and we're very busy getting ready to take on Regenter B3/ Lewisham Council about the section 20 notices/ major works.

By the way, did you know that the Decent Homes Standards specifically EXEMPTS leasehold properties! What a joke that this is being used to force leaseholders into having major works done that far exceed the standards set out in the decent homes policy.

On another note, leaseholders in the PFI have just had the estimate for 08-09 service charges and guess what - we're all facing hikes of at least double last year and in some cases 3-fold and 4-fold increases in charges for day-to-day services. This includes leaseholders who live in street properties who don't even get any of these services!! So much for council reassurances that this wouldn't happen. B3 have gone and done it.

The Cat Man said...

Unfortunately I'm not surprised. This is exactly what you should expect if the council outsources services to the private sector - They want your money, not your vote.

I have the same problem with other lewisham contractors i'm trying to get hold of. Glendale resp. for park manangement are also terrible.

Anonymous said...

This is just a quick warning from Hackney...

I received the estimate in April 2006. It was for 25K! I was a single, working mother of a young child who had only recently remortgaged to buy out my ex-partner. From the moment I received the estimate I tried to engage Hackney in discussions about payment. I simply did not have access to 25k. They would not cap the costs at 10k, even though they had the discretion to. Non-payment meant forfeiture of my lease and I would lose my property even though I have never, ever missed a mortgage payment. However the letter accompanying the estimate made it very clear that we could not comment on costs, contractors or the proposed works that included new windows whether we wanted them or not.

In spite of intervention by my MP, Hackney's continued response is to inform me that 'it is in my lease and my responsibility to pay.' Any dialogue about appropriate repayment schedules was non-existent. (The council offers repayment over two years - a spare grand a month, anyone?) It took nearly two years and an official complaint before the contractors repaired damage to my property after they ripped off curtain rods and yanked out aerial connections and over two years for them to investigate and reduce my bill for work that I shouldn't have been charged for - non-existent asbestos removal and an extractor fan that was apparently optional, though no one told leaseholders that. I also have a very large window that was designed for tenants and their new kitchens. In my kitchen, it buts up against a pre-existing cupboard and does not open.

So the situation now? I have to sell my flat. (I am incredibly lucky that my daughter and I have a friend we can live with, we would have gone to privately rented accommodation for ever.)It took so long for the contractors to sort out the damage (sick leave, people moving site etc.)that the property market has now plummetted.

The council took me to court, even though I have been in a constant attempt to get them to engage with me and I have a CCJ (ironic, since I have never even bounced a cheque in my life!) Like many leaseholders, I have no problem at all contributing to costs, but I am paying for many years of council neglect and, for some strange reason, someone to paint our railings grey!It is also more rewarding to have some 'say' over what you're being charged for and who is doing it.

I can not rent out my flat as the court order is to pay a monthly amount until it's sold - and I cannot get a 'buy-to-let' mortgage with a CCJ.

It is the most dispiriting and frustrating experience in my life. The London MP Karen Buck asked questions about this in Parliament, because her constituents were being around 50k and 60k. I was also involved in a recent Radio 4 Moneybox item about it. People in Islington have recently received estimates for over 20k. Decent Homes marches on.

The moral is... Definitely stick together and scrutinise everything...

Bea said...

G*d - what a horror story! Hope you manage to sell your flat and still make a profit!

tj said...

The Brockley PFI is getting together to go to the Leaseholders Valuation Tribunal - anyone interested in joining the group action needs to get in touch

John in Hoxton said...

hi everybody..
Are you aware that the accounting procedures used to calculate the recharges to leaseholders,
leave much to be desired there are at least four borough councils where it has been shown that the accounts contained errors amounting to millions of £££'s of overcharging (that's millions for each of the boroughs separately)

And do not let anyone get fooled into the £10,000 capping fiasco has being reasonable.

Because the majority of the work for all borough Councils is procured through the LONDON HOUSING CONSORTIUM.

Whereby all boroughs and other organisations join forces and buy the windows and other stuff in bulk for all members. This means if there are hundreds of LONDON HOUSING CONSORTIUM members and together they need for example 300,000 three hundred thousand new windows. They say to suppliers what deal can you do for us on 300,000 windows and this bulk discount price gets shared by all members. So if a small council only needs 200 two hundred new windows they also get the 300,000 three hundred thousand bulk purchase discount arranged via the CONSORTIUM, which is basically the government.

£10,000 is most definitely a massive overcharge for leaseholders when local councils don't purchase like normal businesses, the true cost for the majority of leaseholders across the country is aprox £4,500 to £6,500.

go see here http://www.ltb.viviti.com

True story of an out of court settlement with a local london council . see the site and you will know why i'm anonymous

Anonymous said...

hi everybody..
Are you aware that the accounting procedures used to calculate the recharges to leaseholders,
leave much to be desired there are at least four borough councils where it has been shown that the accounts contained errors amounting to millions of £££'s of overcharging (that's millions for each of the boroughs separately)

And do not let anyone get fooled into the £10,000 capping fiasco has being reasonable.

Because the majority of the work for all borough Councils is procured through the LONDON HOUSING CONSORTIUM.

Whereby all boroughs and other organisations join forces and buy the windows and other stuff in bulk for all members. This means if there are hundreds of LONDON HOUSING CONSORTIUM members and together they need for example 300,000 three hundred thousand new windows. They say to suppliers what deal can you do for us on 300,000 windows and this bulk discount price gets shared by all members. So if a small council only needs 200 two hundred new windows they also get the 300,000 three hundred thousand bulk purchase discount arranged via the CONSORTIUM, which is basically the government.

£10,000 is most definitely a massive overcharge for leaseholders when local councils don't purchase like normal businesses, the true cost for the majority of leaseholders across the country is aprox £4,500 to £6,500.

go see here www.ltb.viviti.com/

True story of an out of court settlement with a local london council . see the site and you will know why i'm anonymous

Anonymous said...

tj said...

The Brockley PFI is getting together to go to the Leaseholders Valuation Tribunal - anyone interested in joining the group action needs to get in touch
11 September 2008 18:10


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