Council Leaseholders

rm2

Hopefully this is in the right place, and someone can offer some advice.

My Mother purchased her council house (Right to Buy) about 8 years ago and as part of her agreement, she is required to part pay any upgrade works that happen on the property, which up until now she has never had a problem with and has been at reasonable levels. Around 10 days ago she received a letter out lining plans for the works, the total cost and what her cost would be. The cost for her portion of the works was £19,000, with no option to not carry out the works, to be paid by 31st December.

Her options

1. 36 Month Loan
2. Council Loan
3. Private Loan

her only options she has is for finance. My mother is 55, and probably has 10 years left of work, she has worked tirelessly for all these years and her only option is to lumber herself with more debt that she really cannot afford, and this causing her untold amounts of stress.

She had no option here, no choice, the council seems to be acting like a flat track bully and a complete cowboy but expecting someone who lives in one of the most deprived areas in the country to causally lumber herself with more debt or that she may have £19,000 and deciding to carry out work with no option to opt out.

Some of the above is emotive, i know that, if it was 5k, 8k then at least it is something that could be worked in some how, but 19k expected to be sorted out within such a short period i find absolutely ridiculous, 80% of this block are council tenants who will not have to pay for these upgrades so they would not have declined them so the consensus in that respect would be really skewed anyway.

Thanks,

R

propertyman

I am assuming it is a leasehold flat or leasehold house?

If so sorry to be harsh but that means that the lease spelt out that -works would be done and
-that it would be in the control of others, and
-that it is a consequence of home ownership that you pay to maintain it and
-don't have the choice of letting it fall into disrepair.

In fact your section 125 notice explains that very clearly.

While the law protects you from overcharging and requires you to be consulted, whether or not works re done are not your, or the others, choice.

Sorry.

While it's still money out you could look at increasing the mortgage as the equity in the house should be less than the current value, by some way, and in the long term she gets it back through the increase in value when sold, in a better state of repair.

rm2

Hi,

Thanks for the reply, it wasn't harsh.

Its not a case of not wanting the works to be carried out (or being against paying for works, she has done in the past), but it is the amount of money and that they expect everyone to have it, she doesn't, so the issue comes in from the fact that if she cannot afford to pay for these items (through a loan or increased mortgage) she could potentially lose her home and in that instance who does that benefit, she would not as the house would not be hers to sell.

I am unaware of any direct consultation, none where costs were discussed (a couple of letters were sent based on plans) but at no point were costs outlined.

If this is the be all and end all then i am not sure what we can do, the money or means to pay a loan are simply not there, it should always fall to a reasonable affordable level for everyone involved.

Thanks,

R

Fire_Fox

Welcome! Major works are part and parcel of being a leaseholder and a contractual obligation under the long lease. Leaseholders are expected to set aside or have access to funds in preparation for this, if you cannot you don't become or don't remain a homeowner. Does your mother have a spare room? If so could she take in a lodger for a tax free income up to £4K a year? Does she know where every last tenner of her income goes?
http://www.stoozing.com/msoc/soacalc.php
https://www.gov.uk/rent-room-in-your-home/becoming-a-resident-landlord

Councils and housing associations are permitted to do improvements, if you search the internet it's far from unusual for bills to be many thousands even tens of thousands. Do bear in mind that the council has a legal obligation to all its tenants (a leaseholder is a longhold tenant) and to meet the Better Homes standards. With private blocks the long leases usually only provide for repairs and maintenance, so major works are more often only thousands. Sorry but your mother did not do enough research before purchasing and should really have taken legal advice earlier in the process. You may find this website helpful, it is government funded. Also check out your mother's council website for Better Homes and/ or leaseholder information.
http://www.lease-advice.org/publications/documents/document.asp?item=20

Is your mother entitled to any benefits? Service charges can be claimed for, not normally major works BUT that *might* depend how the council agrees payment terms with your mother. IMO she would be much better coming to an arrangement with the council than taking out a private loan, best way to address this is likely in writing - something similar to what the debt charities CCCS and Payplan do with creditors, send them a full budget and an offer of an initial lump sum then realistic staged payments.
http://www.turn2us.org.uk/benefits_search.aspx
http://www.stepchange.org/
http://www.payplan.com/

Another possibility is that the council will get a charge against your mothers property or the debt added to her mortgage. With an increased mortgage she *might* be entitled to claim Support for Mortgage Interest. Final option is to put the place on the market at a realistic price for a quick sale and then move into rented. It will take a long while for the council to complete proceedings for the lease to be forfeited if indeed they go that route.
http://england.shelter.org.uk/get_advice/help_with_housing_costs/support_for_mortgage_interest
http://www.direct.gov.uk/prod_consum_dg/groups/dg_digitalassets/@dg/@en/@benefits/documents/digitalasset/dg_201860.pdf

rm2

Fire_Fox wrote: »

Welcome! Major works are part and parcel of being a leaseholder and a contractual obligation under the long lease. Leaseholders are expected to set aside or have access to funds in preparation for this, if you cannot you don't become or don't remain a homeowner. Does your mother have a spare room? If so could she take in a lodger for a tax free income up to £4K a year? Does she know where every last tenner of her income goes?

Councils and housing associations are permitted to do improvements, if you search the internet it's far from unusual for bills to be many thousands even tens of thousands. Do bear in mind that the council has a legal obligation to all its tenants (a leaseholder is a longhold tenant) and to meet the Better Homes standards. With private blocks the long leases usually only provide for repairs and maintenance, so major works are more often only thousands. Sorry but your mother did not do enough research before purchasing and should really have taken legal advice earlier in the process. You may find this website helpful, it is government funded. Also check out your mother's council website for Better Homes and/ or leaseholder information.

Is your mother entitled to any benefits? Service charges can be claimed for, not normally major works BUT that *might* depend how the council agrees payment terms with your mother. IMO she would be much better coming to an arrangement with the council than taking out a private loan, best way to address this is likely in writing - something similar to what the debt charities CCCS and Payplan do with creditors, send them a full budget and an offer of an initial lump sum then realistic staged payments.

Another possibility is that the council will get a charge against your mothers property or the debt added to her mortgage. With an increased mortgage she *might* be entitled to claim Support for Mortgage Interest. Final option is to put the place on the market at a realistic price for a quick sale and then move into rented. It will take a long while for the council to complete proceedings for the lease to be forfeited if indeed they go that route.

Hi Fire fox, thank you for the response, some great suggestions there, we are going to speak to the council first see if there is any room to wriggle like you said, it simply is an issue is money is tight and there is no space for this sort of expense, its not really that she doesn't want to pay it, if it was there it wouldn't be an issue.

Thanks again for your time.

Rob

Fire_Fox

rm2 wrote: »

Hi Fire fox, thank you for the response, some great suggestions there, we are going to speak to the council first see if there is any room to wriggle like you said, it simply is an issue is money is tight and there is no space for this sort of expense, its not really that she doesn't want to pay it, if it was there it wouldn't be an issue.

Thanks again for your time.

Rob

Approach the council formally (in writing) and keep copies of all correspondence as evidence of willingness to negotiate and pay. The problem is legally speaking not being able to afford to contribute to major works is no excuse, there is a contractual obligation under the long lease. Leaseholders are expected to have made provision for this.

propertyman

The leasehold services department of your council will be able to discuss and MUST direct you to sources of advice.

If it is genuine case that her income cannot support the loan, it is unlikely they will seek possession, or indeed,less likely they would get it.

In those cases they typically negotiate part payment or take a charge on the home in the long term that is paid at a later date or on the sale.

Your local area may also have " your council" leaseholders association who can assist.