This is a letter to neighbours from a housing activist in Notting Hill Genesis. Underneath are the comments made to the Competition and Markets Authority.
Your comments need to be in by 12 July!
The Competition and Markets authority (CMA) is carrying out an investigation into the abuses taking place within leasehold and also the mis-selling of leasehold. The majority of leaseholders were not told at the time of purchase that they are classed as tenants in law and the freeholder is our landlord. The majority were not told about the permission charges we would have to pay our landlord to carry out improvements to our flats such as a new bathroom or new kitchen etc.
The leasehold scandal is gathering pace and is in the press daily. We need as many people as possible to email the CMA to let them know of their experiences please! This scandal has the potential to be the PPI of the housing industry. The Law Commission has also been carrying out a major consultation on leasehold reform with their recommendations being compiled ready to present to the government later this year. They are pushing for commonhold for flats like Scotland and the majority of the rest of the world along with many other recommendations to protect leaseholders. However the big shot investors have employed the top lawyers to lobby against the changes that will take away their ability to abuse and use leaseholders like cash cows.
I have shared below my email to the CMA which may help you with ideas for your own email to them. Remember to add the personal impact this is having on your own situation.
I have included links to the CMA website so you can read about their investigation and also a list of the email addresses to send your experiences to.
Call for your views
If you wish to provide information to the CMA please use one or more of the following email addresses below:
In the heading of your email please indicate the address of the property about which you are getting in touch with the CMA and any other relevant material such as, should you be contacting us to make a complaint, the person against whom you wish to complain.
In your email please provide as much detail as you are comfortable with including timescales and dates, values and frequency of payments etc.
We would appreciate initial responses by 12 July.
Dear CMA team,
I have been made aware of the enquiry you are carrying out into the issues experienced with leasehold properties and wanted to share the below. I have copied the information that I sent to the Select Committee when they were collating evidence in September 2018.
Housing Associations- our freeholder is Notting Hill Genesis Housing Association, prior to the merger they were Genesis Housing Association and prior to that Paddington Churches Housing Association
Housing Associations are not subject to the FOI Act and can refuse to answer requests about fire risks, Health and safety matters and a range of issues as they so choose.
I have been asking for a copy of the Fire Risk Assessment since June 2017 and so has my MP. Genesis Housing Association told me it was not their policy to share Fire Risk Assessments with residents. They failed to reply to my MP’s letters. I requested a copy of the Fire risk assessment again in 2018 once they merged with Notting Hill Genesis and wrote to the CEO, Kate Davies. She has not responded to my email nor to my letter sent Special delivery. 24 months after Grenfell we have still not been provided with a copy of the Fire Risk Assessment for our building despite numerous requests by myself, my MP and a lawyer. This is an interesting link on fire safety post Grenfell. https://www.thecanary.co/uk/2017/06/30/not-just-grenfell-these-tenants-warning-fire-safety-years/
Housing Association and councils with a Qualifying Long Term Agreement (QLTA) are exempt from going out to tender for works and they add a 15% management fee on top of the contractors cost meaning that there is no incentives for them to keep the costs down. The higher the contractors cost, the more management fees they can command.
We currently have a recent example of this. Our cyclical works costs have gone up massively. This is since the QLTA was brought in with Kier to provide all the works for the Housing Association. Kier were fined £17.9 million in 2010 for contract rigging and price fixing yet the Housing Association signed the QLTA with Kier in 2014. Why? Because they have been able to add a whopping management fee of close to £30,000 on top of the already inflated costs for the cyclical works. We had an independent report carried out. The report confirms that much of the work needs doing due to the failure of the freeholder to carry out basic routine maintenance to the building and so some of the costs have been incurred due to their negligence. Yet it is the leaseholders that have to pick up the costs of the freeholders negligence. The cyclical works are supposed to be done every 7 years according to Notting Hill Genesis Housing website yet our last one was over a decade ago.
Another major issue is the one surrounding lease extensions, collective enfranchisement and the right to manage. All of these options are out of reach to shared ownership leaseholders unless they have staircased to 100% share. In London’s market, this is going to be impossible for the majority of leaseholders. This means we cannot extend our leases, we cannot buy our freehold and we cannot get rid of our incompetent management company. See below links regarding lease extensions from both the Genesis Housing Association website and the Notting Hill Housing Website. Both Housing Associations have now merged. It is interesting to note that both Housing Associations push for lease extension via the informal route which, as those in the know are aware, is NOT the recommended route and is dangerous for leaseholders.
We are also not able to collectively enfranchise unless all flats have staircased to 100% which is impossible in London’s market
We are also not able to exercise our Right to Manage for the same reasons as above.
There is a lack of transparency and despite around a decade of complaining about erroneous service charges, nobody told us that we had the right to inspect the receipts making up the service charges.
Nobody told me this, not the Leasehold Advisory service every time I contacted them, not the CAB, not my MP and not even my legal representative. I found out about the Section 21 and Section 22 of the Landlord and Tenant Act 1985 from the National Leasehold Campaign and the Leasehold Roadshow put on by Louie Burns. As soon as I had this information I issued these notices and received a pack yet it is missing the majority of items.
It is tedious and time consuming to keep going backwards and forwards and they hope that people will give up. We are often charged for items that don’t exist and/or duplicated charges and it takes years and years of emails and still you don’t get anywhere.
The charges are also inflated and as a recent example, a charge of over £300 was made for an item which can be purchased in a shop for £14 (Replacement entry phone handset).
We also have examples of duplicated management costs which are 15% and have been applied in the same years budget more than once.
I was refused a copy of the Insurance premium paid despite this being clearly stated in my lease that I am entitled to a copy of the receipt of premium paid every year. They state they are not able to provide this as they insure all 168,000 of their properties and cannot provide a receipt for my block. I asked them how then did they manage to calculate my share in accordance with my lease. Unfortunately I haven’t received a satisfactory response to date and neither have I received a copy of the receipt for the insurance premium yet I am expected to keep stumping up money. Funnily enough, the service charge actuals are always over budget. Here is a link to a story that is about my freeholder overcharging residents on their Just Ask cleaning account https://www.mylondon.news/news/west-london-news/huge-refund-maida-vale-residents-15168299
There is no quality control of their contractors who get paid for doing the work even if it is not done or not done to a decent standard.
Brent Environmental Health issued Genesis with a notice due to a mouse infestation they had ignored for 2 years. Genesis also ignored the EH notice and ignored the works in the notice but issued residents with charges of over £6000 despite the proofing of entry points not being done even to to this date.
Between winter and spring the gardeners failed to show for months and although we pay for 4 hours per week gardening, when they do show they are rarely on site for more than an hour. The procurement and contracts department are not willing to speak to and liaise with leaseholders to find out what it is we want and to confirm we are receiving the services we are paying for. The same applies to the cleaners, window cleaning and bin store cleaning which also don’t take place as per the contract yet we have to pay the charges as stated. The freeholder refuses to give us or show us a copy of the contract either so we are expected to just pay up.
While I welcome the Government’s programme of work on residential leasehold reform I do not feel it is currently doing enough to help current leaseholders who are already trapped by onerous leasehold terms, especially the high service charges and S20 works which are currently not being looked at by the law commission, yet affect a huge number of current leaseholders. I believe further reforms should be introduced to prevent managing agents and freeholders taking advantage of leaseholders for monetary gain for themselves. Developers have already had the money from the sale of the flat and the managing agent is paid a handsome fee for carrying out his duties of managing. There is no need to continue to milk money from leaseholders long after they have paid the asking price of the property.
Of course there is the first tier tribunal, but this is not fit for purpose. To go to a first tier tribunal it would cost me £100 for the application and a further £200 if there was a hearing. If I did this, I would no doubt be met at the tribunal by the Freeholder and his solicitors and barristers who would all argue a point of law and probably conclude that it is reasonable to spend money on something but not fix it. The Government should overhaul the first tier tribunal so that there is a level playing field and the leaseholder without the money for expensive legal representation is not disadvantaged. The freeholder and managing agents are gambling on leaseholders having neither the time nor the money to challenge their unscrupulous practises at a property tribunal.
The governments push on shared ownership properties and the amount of people being trapped with leases they can’t extend until they have staircased to 100% share and flats that are being forfeited due to
the escalating costs in service charges, cyclical works and service charges must all be looked at before this housing model carries on being roled out.
Housing Associations must also be much more accountable and transparent rather than hiding behind their exemption to the FOI act. See the example of 29 year old Carolyn Mendehlson who was evicted by Genesis Housing Association after paying her mortgage for ten years after her rent and service charges became unaffordable.
I was not made aware of any of the pitfalls of leasehold by the solicitor recommended by the housing association when I purchased my flat. I was told to use their recommended solicitor because they were experienced in shared ownership and that therefore the sale would go through faster with no hiccups. I was never told that as a shared ownership leaseholder I was actually a tenant with an AST under the housing act of 1988 but with 100% responsibility for ALL of the buildings maintenance costs as is being discovered by all those unfortunate shared ownership leaseholders in buildings with cladding. The case of http://haresidentsaction.org.uk/leasehold-and-shared-ownership/shared-ownership-is-not-ownership/ This is the precedent set by Richardson v Midland Heart 2007, when Ms Richardson lost everything because she got into rent arrears on the share she didn’t own, and since then a number of people have lost their homes in similar circumstances. This situation will only change if there is a new Act of Parliament which updates the 1988 Act. Currently there are no plans to do this.
I was also never told that I would have to pay my housing association freeholder permission fees if I wanted to put in a new bathroom suite or kitchen, or permission fees if I wanted to change my mortgage provider or even that I would have to pay them 1% of the market value when selling my shared ownership flat.
I am in a fortunate position in that I was able to staircase to 100% ownership however I am still a tenant in the eyes of leasehold law and, because some of my neighbours are shared ownership, we are exempt from the Right to Manage and Enfranchisement. I still have to pay permission fees and I still have no say in the running of the building nor how my service charges are spent. The only benefit is that I no longer will have to pay them 1% of the market price when I come to sell my flat.
I appreciate their is a lot of information here to take in but this is just a small glance into the nightmare that being a leaseholder is for people.