London Leaseholders' Network
incorporating London Forum for Council Leaseholders' Associations
see also our sister organisation web site
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Updated 2008 November 20th.


















































































































  The next meeting of the London Leaseholders' Network will take place
January 2009

Last year Anita Shields carried out an independent audit of Southwark Council's charges to Leaseholders exposing numerous discrepancies and poor practice that were featured on a BBC Inside Out programme.

This year Tower Hamlets Leaseholders, following a Leasehold Valuation Tribunal on the matter of Estimate Management Charges and a mass attendance at a Town Hall meeting got Tower Hamlets council to agree to an Independent Audit of their service charges.

The Tower Hamlets case can be viewed on the Residential Property Tribunal Service web site but the file is 8 mgb so you may not want to be running too many other applications a the same time. Download the case here

Decent Homes Crunch
Housing is hardly out of the news currently and there have been too many television programmes on the subject to list here.
Leaseholders have been experiencing a credit crunch of their own for some time and it is always good to see references to this lest we are forgotten. If you go to the Radio 4 website you can 'listen again' to an item broadcast on 2008 September 18th entitled
"Decent Homes Initiative: Large bills for leaseholders"

News from City Hall
Consequent on the replacement of Ken Livingstone by Boris Johnson as London's Mayor at City Hall there have now been a number of changes to personnel and indications of changed policies at City Hall.
The best insight into these changes can be seen from "Planning for a Better London" This document takes the form of a consultation and comments should be submitted before 2008 November 10th.

Digital Switchover
One subject that is concerning all tenures in blocks of any size now is that of the Digital Switchover. Having sold the future rights to the wavelengths currently used for the broadcast of analogue television for £22.47 bn Central Government is kean to ensure that they can switch off the analogue signal in time. Having taken over the provision of aerials for television in housing blocks in order to discourage the proliferation of dishes and aerials landlords now have to ensure that none of their tenants are left without a signal.
Many tenants have made their own arrangements through the installation of cable, watch programmes on the internet .......... or have no television and with the service charge to leaseholders for the installation of a new service by the landlord projected to cost anything from £25 to £722 their have been a great many arguements.
One of the better deals for leaseholders is that promised now by Homes for Islington (HfI) to their 8,000+ leaseholders living on estates who will not have to pay at all if they do not want to have a socket fitted inside of their flat.
Asked how this came about a spokesman for HfI said that the aerial cabling is deemed to be part of the external work but having the socket installed is internal. Generally leaseholders are not to have internal works to their flats and so it was deemed expedient to allow leaseholders to opt out. You can readily shoot a number of holes in this because the replacement of windows and the replacement of electricity cabling to meters are both likely to involve work to the inside of leaseholders' flats and operating in denial of items of work is a sure fired way of guaranteeing that you do not carry it out properly.
The estimated cost of having a socket installed is £75 which is a lot better than the £722 estimated elsewhere but leaseholders might want to get a firm price before going ahead because actual costs in blocks of differing size and layout will surely vary enormously.
Islington's Frequently asked Questions (FAQ) will provide a useful checklist for leaseholders who have yet learn what their landlords propose to do.

Europe
English Leasehold Reform (ELR) wrote to the European Commission asking for a ruling to the effect that certain aspects of English leasehold are anti-competitive. ELR have now received a reply from the European Commission to the effect that the Commissioners for Competition and the Internal Market can find no case to pursue. You can read both the original submission and the final reply on ELR's website.

Housing as a whole is the Cinderella subject in Europe. This important aspect of our lives is not the responsibility of any of the 27 commissioners.

Corruption in the building industry
The Office of Fair Trading on 2008 April 17th. issued a damning 'statement of objections' (SO) against 112 construction companies outlining corruption in the building industry that can be seen via their web site.
There is also a report on the BBC News website where you can 'have your say'.

Some of the 112 companies concerned are known to have been working on social housing in London.
37 of the 112 companies sought leniency over a year ago by which time when only 57 companies had been raided. By that time the OFT had uncovered "evidence of bid rigging in thousands of tenders with a combined estimated value approaching £3 billion." These companies presumably confessed to uncompetitive practices presumably through the process known as the issuing of a 'no-action letter'.
The offer of a reduced financial penalty then "led to over 40 further companies subsequently admitting participation in some bid rigging activities."
The 'statement of objections' says that "No assumptions should be made at this stage that there has been any infringement of competition law by any of the companies named in the SO." However, surely we should be told which of these companies have admitted guilt immediately.
If any of the more than 77 companies that have admitted to bid rigging have done so on bids that concern social housing then compensation should be paid back to the landlords concerned in order to reduce the outgoings from the Housing Revenue accounts. Then in turn there should be a rebate paid on leaseholders' bills.

Comments that downplay the effect of cover pricing have been missing the point.
End users, such as leaseholders, who have to pay the cost of contractors work without having any effective control over the work to be done or who is to carry it out, are routinely fobbed off with reassurances that there is a rigorous process of competition in place when in reality at worst there may be only one contractor who is genuinely putting in a price.
Then long term agreements such as "framework agreements" have been, incredibly, cited as providing a solution to these problems when examination of these agreements will show that they have corrupt practices built into their very heart.
Council leaseholders across London have seen contractors whose appalling track records are not allowed to be taken into account, taken through lengthy selection processes that involve their being fed prices against which to set price reductions rather than asked to price blindly and conferences in which they are introduced to those that they are supposed to be in competition with.
More latterly we have seen the introduction of ‘strategic alliancing agreements’. Contractors that sign up to these share supply chain information with others within their framework so that they can “drive down prices” but in so doing they will be making their own competitive position unassailable and making it impossible for new contractors to compete in future. This is arguably good in the short term but in the long term it will mean that a few large contractors will be in an ideal position to abuse the market.
Given that there are so few contractors large enough to bid to become part of these framework agreements and that they tend to be looking for work in more than one borough at a time the long term can prove to be very short indeed. Supply chain information picked up through a strategic alliancing agreement in one borough can immediately be used in the next borough.
The height of this stupidity was seen when 8 of the 32 London Boroughs got together in the so called London Area Procurement Network (LAPN)

On the timely presentation of "HfI [Homes for Islington] Capital Programme Scrutiny Review" to Islington Council's executive on 2008 April 24th Councillor Stacy announced that he had written to the OFT to ask whether any of the four contractors that are both engaged in Decent Homes Work in Islington who also appear among the list of 112 contractors being investigated are among the 77+ and if so as to whether they were involved in uncompetitive behaviour with regard to contracts awarded in Islington. All other councils should be engaging in a similar exercise and should be looking again at all the tendering.

London leaseholders need to assemble a list of all the contractors working in London so that they are armed with the necessary information or carrying out their own scrutiny.

Islington Leaseholders were delighted to hear Cllr Paul Convery (lab) draw attention to the fact that in the rather cosier environment of framework contracting, the potential for this type of collusive activity is even greater.

As at 2008 September there we are no further towards obtaining a list of these companies.
What contractors are working in your borough?

Leaseholders' Petition to Government
2008 March 5th. The Government issued its response to the petition asking for the abolition of Leasehold that had been posted on their e-petitions web site. As such this answer amounts to the latest statement of the Government's policy on leasehold and is therefore significant to all leaseholders.

Text of the original petition:
"We the undersigned petition the Prime Minister to Abolish Leasehold."

Details of Petition:
"The antiquated leasehold laws date back to the eleventh-century and apply only to England, Wales and Hawaii. Scotland managed to replace residential leasehold with commonhold. It is only fair that England and Wales should be relieved of this feudal law."

Here is the Government's response:-
Like freehold, leasehold is a long established and extremely common way of owning property in England and Wales. Unlike freehold ownership, however, leasehold ownership is limited in time.

The Government introduced the Commonhold and Leasehold Reform Act 2002 (the 2002 Act). The 2002 Act made significant changes to the rights of leaseholders including making the purchase of the freehold or the extending of the lease of the property easier, introducing a new no fault right to manage, and making the resolution of disputes quicker, easier and cheaper by moving jurisdiction for the majority of disputes from the courts to the leasehold valuation tribunal.

The 2002 Act also introduced a new form of freehold ownership, known as Commonhold, as a voluntary alternative to long leasehold ownership of inter-dependent properties such as flats. Commonhold. is similar to systems in the USA and Australia, but is unique to England and Wales. It is intended to be suitable for developments of all sizes and for mixed use developments.

Commonhold was provided for as an alternative to leasehold as part of Government's commitment to promote housing choice. Such choice would not be achieved by either imposing a ban on future leasehold development, or abolishing leasehold in general. In addition, banning leasehold in general would require consideration of matters such as whether the landlord, who would lose their interest in the property if leasehold were abolished, was entitled to be recompensed for that loss, and if so, who would be liable to pay.

Currently when leaseholders qualify and wish to buy the freehold they are liable to pay an appropriate premium for it. For example, if all existing leaseholders were required to convert to common hold, it could be argued that this kind of forced conversion would amount to a form of compulsory purchase. The associated interference with the dissenting minority's property rights and the removal of their statutory protections would give rise to human rights implications. Imposing the costs of conversion on unwilling participants could also be problematic.

Here are some initial thoughts. Use the Google Group facility on the side bar to let everyone know what you think should be said.

Note that when a request was made for Braintree District Council to provide a list of the addresses owned by the Council they were refused on the grounds that the data should be protected. Subsequently an appeal was made to the Data Commissioner who ruled that only the names are protected and that the Council should hand over the addresses. Download the press release. Download the detailed ruling.

The Commonhold and Leasehold Reform Act 2002 passed into Law five years ago and for several years we saw one provision after another brought into operation. Section 152 that would require landlords to provide leaseholders with a regular statement of account, an accountants certificate and a summary of rights and obligations has never been the subject of a commencement order.
In July of last year Communities & Local Government (CLG) published a Consultation Paper and since 2008 January 16th it has been possible to download a Summary of the Responses.
As you would expect I have placed links to all these documents from the references (or bibliography) section on the side menu.

Also on the "housing finance" section you will find an oft referred to document entitled "Financing Council Housing" from the Audit Commission that spells out a summary of the workings of the Housing Revenue Account but be careful not to assume that it give the entire story.



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