Tories delay application for fairer leaseholder charges

At last Monday’s Executive meeting it was agreed to apply to the independent Leaseholder Valuation Tribunal (LVT) to make a decision on varying the percentage charges of the Benhill Estate leaseholders.

Conservative opposition members applied the following day to delay the application so that it could be debated at a full council meeting in December. They said that the desired outcome at council is to delay it even further by having it looked at by the Health and Wellbeing Scrutiny Committee.

The Executive’s decision to apply to the LVT was at the request of leaseholders who had highlighted that similar properties on the Benhill estate were paying different percentage rates for services and major works. This request was supported by representatives of the Sutton Leaseholders Association.

Investigations showed that when ‘right to buy’ council homes were first introduced the percentage contribution towards shared services was calculated in a fairly simplistic manner. As right to buy became established the calculated charge detailed in the leases better reflected the relative size of the individual properties as well as any connected garages. The result is that similar properties are paying vastly different amounts towards the same works because they were purchased at different times.

A more detailed appraisal looking at what a fairer application of percentage charges would mean showed that some leaseholders had historically contributed significantly less than their appropriate share, whilst others had been paying too much.

It was agreed that an application should be made to the Leasehold Valuation Tribunal to vary the leases so that in future everyone pays the percentage that correctly reflects their share of the building. There will be winners and losers as a result of the ruling, and there is no guarantee what the LVT will decide.

The Benhill leaseholders had indicated an urgency to resolving this matter as they would soon be having major works undertaken to their properties which would have a big impact on the contributions they will be expected to make.

The delay poses a risk for council tenants as any overall under-recovery of charges comes out of the Housing Revenue Account thereby reducing the amount available for improvements to their properties. Any party to a lease can apply to have their terms changed so if overpaying leaseholders applied individually the Housing Revenue Account could lose funds without the compensatory adjustment from underpaying leaseholders. This is why the decision was for the council to apply and have all the leases reviewed at the same time.

I am sure that the delay to getting a decision from the LVT caused by the Tories will result in an extended period of anxiety and uncertainty for leaseholders who will have no assurance about the bills they are likely to face in the near future, and anger those leaseholders who already feel they have spent long enough contributing more than their fair share.