The risk of buying ex-local authority property has been laid bare by a leaseholder who claims she has had to pay more than £24,000 for a new heating system and £2,000 to have her door painted.
Artist Michelle Baharier has lived on the Gilesmead estate in Camberwell, south London since 1993, first as a council tenant, then as a leaseholder since purchasing her flat through right to buy in 2008. Southwark council owns the freehold to the estate of 40 flats, 29 of which are owned by leaseholders.
Since owning the property, the 56-year-old has been on the receiving end of “eye-watering” bills for maintenance to the building.
She says her two-bedroom flat originally lacked adequate heating. In 2014, after a series of surveys and consultations with leaseholders, the council installed a communal heating and hot water system at a cost of close to £1m, saying it would last 25 years. Each flat was billed £24,486. But Baharier claims that installing an individual heating system in each flat would have cost just £4,000 per property.
“They installed the communal system which included a hot water tank in my living room, plus three radiators.” She decided to challenge the cost, as under the terms of her lease, she said she only had to pay for repairs, not improvements.
Baharier took her case to the first tier tribunal which ruled that she didn’t have to pay the money.
Southwark council appealed, and the upper tribunal ruled in its favour saying: “It is unrealistic to suggest that the parties entering into the lease intended the building to remain unchanged throughout the term.” Baharier was required to pay the money, plus court fees and interest, bringing the total to about £32,000. She says the new heating system regularly breaks down with leaseholders footing the bill, which the council denies.
“We’ve paid for more than 50 repairs in the past year. The council doesn’t seem to know anyone who can fix the heating. The pipes and tanks have cracked and are leaking. I don’t have any control over the temperature of my flat and my hot water tank isn’t sufficiently insulated,” she says.
Major works bills from Southwark council continued to arrive on the doormats of Baharier and the other leaseholders. These included an £8,000 bill per flat for internal decoration, which was later reduced to £2,000. “The council originally tried to charge us £8,000 each for internal decoration which involved painting corridors and the front door to each flat. We are being ripped off. It took the workman two hours to paint my door,” she says.
Southwark council said the £8,000 bill was an “estimate” and included electrical work that didn’t go ahead. The Landlord and Tenant Act 1985 requires freeholders to consult leaseholders if major works will result in a bill of £250 or more per property. Leaseholders can nominate alternative contractors to carry out the works and the freeholder is obliged to obtain an estimate. But the rules are different if the freeholder is a local authority; leaseholders can make “observations” but the authority has no obligation to act on them.
Kieron Williams, cabinet member for housing management at Southwark council, said: “We have a duty to keep all our homes in good condition. Leaseholders are then legally responsible for their share of the cost of maintaining their block or estate. Unfortunately some work is expensive so the bills can be large.”
Sebastian O’Kelly of the Leasehold Knowledge Partnership says he gets three or four queries a week from leaseholders facing huge bills for major works, with most bills in the region of £15,000 to £25,000.
“The problem is that councils do not have reserve funds, so huge bills come out of the blue. These can be devastating for right-to-buy purchasers or young first-timers, who have bought a council property because it is relatively cheap,” he says, “The bills are staggeringly high, the works are often pretty shoddy and there seems to be minimal cost control.”
O’Kelly’s advice for those who don’t think they are getting value for money is to pay the bill, and fight it later. “This means you can argue over the quality of the works or the cost without danger of being hit with legal costs if you fail,” he says.
Other local authority major works bills
The Guardian reported in May that leaseholders on the Tustin estate in Peckham, also owned by Southwark council, had received bills of £146,000 for regeneration of the whole estate.
For leaseholders struggling to pay the amount – which is more than five times the average UK salary – the council offered an interest-free loan over 72 months, or to buy back the property.
Back in 2016, we reported on how leaseholders at tower blocks in Oxford had each received a £50,000 bill from Oxford city council for works to their block. But a tribunal ruled that the 54 leaseholders were not obliged to pay for the improvements, only repairs, and the bill was reduced to less than £4,000 per flat.
