council sinking fund

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ging84 wrote: »

Council or housing association owning an asset and not charging full market rate when renting it, is a form of subsidising.

The Mayor of London wants to charge market rents and at presents its 80% of market rents in London and that's not cheap. Old block that are 60 or 70 years old councils has more than made their money from its property from renting without doing any maintenance or cleaning of communal parts as well as as in and around the estate. All the councils are good at is collect money and that is what they do best but do not maintain its properties. If they do get some work done the contractors takes years to do it and charge whatever they like as their contractors know that no check will be carried out on their work.
Also, councils likes to come across as green but they leave all their external lights on during the day time, they do not care as the residents will be paying for it.

The other problem with run down council estates is that in many areas the housing department are expected to maintain the whole area despite a large number of the properties having being sold off over the years under RTB.

People that purchased under RTB are charged the same as tenants for services that the council do not deliver. Also, they get very large bill for works and have no say on it. Some that purchased under RTB that have not let out their homes are questioning management fees as there is no management in the councils. RTB got some good deals in 80' and 90' and since then properties prices have gone up 300% who would buy nowadays considering how bad council are with maintaining their properties as well. Terms and condition for RTB have change from 3 years to payback the discount in 90's and now that is 5 years also council's has the option to buy back within 10 years. Council use their billionaires contractors for any major works they carry out on council properties. How do you think their contractors became billionaires.

Also residents do not have the option of getting individual gas provider as some council have a blanket policy and residents pay them not the gas company, therefore if a family of 4 or 5 will pay the same gas prices as a pensioner living on their own.

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leegarlick wrote: »

i havent agreed to buy the property yet so not sure what they have sent me is the actuall lease but it does give a breakdown of were my payments to them would go.I agree with the majority of them i am quite happy to pay for repairs or improvments but only if i am fairly charged,when i rang and asked about the advance payment fund they said it was incase the roof got damaged or incase they decide to change all the windows?
Also if i have been renting from them for 10 years i presume some of my rent has been getting put into this pot yet no work in 10 years has been done, so the pot should be pretty big as there are 6 flats in the block.Also now they have broken down the service charge i have been paying for 10 years i can see that i have been paying for things that havent been done(£63 a year for gardening, the garden hasnt been touched by the council for at least five years) is there anything i can do about this?

I expect you have received S125 with breakdown of what you will be expected to pay, ask the council for a copy of the lease and then as MisterBaxter has advised question everything in it.

As it is a small block and perhaps other have purchased under RTB you could all could buy the freehold, as for not getting anything done for the service charge you have already paid that is how council and you will not get anything done that they have charged for and its not going to happened now unless you chase them day and night and they you will be labeled as complainer and that is not good for you in the future.

PlutoinCapricorn

I live in a council owned block of flats. I have always believed that local authorities are not legally permitted to operate sink funds. I think it was a neighbour who told me that when we were discussing possible major works. I wonder where he got this idea from - perhaps it varies according to the area.

Some neighbours check and query everything, to ensure that we get value for money.

cattie

charlieismydarling wrote: »

Council rent is not subsidised by the taxpayer, or indeed any other body. It is more affordable and not inflated like market rents.


Big difference. Yawn.

Of course it's subsidised. How on earth does a tenant such as a friend of mine get to live in a huge 4 bedroom mansion flat right in the centre of Waterloo for a rent of under £100 per week? If you don't think that's state owned property, which is what council housing is, isn't subsidised, then how do you quantify a prime piece of state owned property that could easily be let for £1200- £1500 per week bringing in a mere pittance?

That's not to say I believe the council should be looking to charge anywhere near what the rent on the open market could be, but a little more reality in some of the rents they charge would be no bad thing. Many people clamor for council property simply because of the very low rents charged, which obviously you can't blame them for.

Somebody has to pay for the upkeep of exterior & common part & all the internal improvements carried out recently, as well as the management & staff charges & it certainly doesn't come out of the rent! Councils get massive subsidies to run council properties from the government because the rents don't cover expenditure so where do you think this government money comes from?

MisterBaxter

moremore wrote: »

People that purchased under RTB are charged the same as tenants for services that the council do not deliver. Also, they get very large bill for works and have no say on it. Some that purchased under RTB that have not let out their homes are questioning management fees as there is no management in the councils. RTB got some good deals in 80' and 90' and since then properties prices have gone up 300% who would buy nowadays considering how bad council are with maintaining their properties as well. Terms and condition for RTB have change from 3 years to payback the discount in 90's and now that is 5 years also council's has the option to buy back within 10 years. Council

You misunderstood my point, I wasn't referring to tenants who bought flats under RTB and who pay service charges I was referring to tenants who have bought houses on housing estates, they generally don't pay a service charge but pay for council services through council tax. Tenants pay for some estate charges through their rent as well as through council tax.

I have done work for a number of councils with retained stock where the land on housing estates is owned under the HRA (housing budget) and not the General Rate Fund, the HRA budget pays for the maintenance on this land but tenants who have bought under RTB make no contribution and there is no funding back into the HRA from the General Rate Fund so they don't even fund indirectly.

PlutoinCapricorn
Council sink fund
I live in a council owned block of flats. I have always believed that local authorities are not legally permitted to operate sink funds. I think it was a neighbour who told me that when we were discussing possible major works. I wonder where he got this idea from - perhaps it varies according to the area.

Some neighbours check and query everything, to ensure that we get value for money.

I have not seen anything that specifically precludes a social housing provider holding a retained or sinking fund to pay for future works provided the lease allows for it and proper accounting rules are applied. The problem I have seen is that a number of landlords have been caught out by collecting an annual charge for a sinking fund without there being provision within the lease.

cattie wrote: »

Of course it's subsidised.........
Somebody has to pay for the upkeep of exterior & common part & all the internal improvements carried out recently, as well as the management & staff charges & it certainly doesn't come out of the rent! Councils get massive subsidies to run council properties from the government because the rents don't cover expenditure so where do you think this government money comes from?

This changed with the introduction of self financing in April 2012. The HRA budget now has to stand on it's own, there is no claw back from Central Government but also no handouts. If anything many Councils are facing the problem of the housing budget being pilfered to fund other services such as social services and education. Council housing budgets are kept separately to the general council budgets and have to show that they balance and that all costs are covered.

Lioness_Twinkletoes

leegarlick wrote: »

I have just enquired about the right to buy my property,it is a top floor maisonette.It is in a poor area and only valued at £32000 which i can buy for £11500 because of my 12 years of being a council tenant (10 years at this property) i have just received the servicre charge bill and the advance payment fund (sinking fund)is £888.32 a year.The total bill for service charges comes to £1165.32 is this reasonable????
I think it is extremely high especially as ive been here 10 years and nothing has been done to the block,are all sinking funds this amount??? Any help or advice would be appreciated
thanks:)

Be very careful. My LA are carrying out extensive block refurbishment works and some of the leasehold bills are in excess of £20k - each. If there has been no work done to the block, it is likely to be very, very expensive when it is done.

moremore

Council have their own policies and they vary.

You misunderstood my point, I wasn't referring to tenants who bought flats under RTB and who pay service charges I was referring to tenants who have bought houses on housing estates, they generally don't pay a service charge but pay for council services through council tax. Tenants pay for some estate charges through their rent as well as through council tax.

Houses freehold are different to flats they do not have the same outlay as blocks of flats.
Some councils gives a breakdown showing their service charges and other charges for the contiguous areas separately to rent for each tenant. However, they only keep the outside areas in good order as it will reflect on them but they ignore the communal cleaning as they will always blame the people living in the block for being dirty and save the money they charge for communal cleaning. Caretaker have the easiest job going they do not turn up and if they decide to show it will only be for an hour, their employer ie the council will always back their staff as opposed to resident/tenants.

Be very careful. My LA are carrying out extensive block refurbishment works and some of the leasehold bills are in excess of £20k - each. If there has been no work done to the block, it is likely to be very, very expensive when it is done.

It is the same with council blocks and I have seen contractors worker on roof of building sunbathing for hours on end and when finish they leave and go no work done and they do have to care as they will get paid regardless and will cost millions to the tax payer.

MisterBaxter

moremore wrote: »

Council have their own policies and they vary.

Houses freehold are different to flats they do not have the same outlay as blocks of flats.
Some councils gives a breakdown showing their service charges and other charges for the contiguous areas separately to rent for each tenant. However, they only keep the outside areas in good order as it will reflect on them but they ignore the communal cleaning as they will always blame the people living in the block for being dirty and save the money they charge for communal cleaning. Caretaker have the easiest job going they do not turn up and if they decide to show it will only be for an hour, their employer ie the council will always back their staff as opposed to resident/tenants.

It is the same with council blocks and I have seen contractors worker on roof of building sunbathing for hours on end and when finish they leave and go no work done and they do have to care as they will get paid regardless and will cost millions to the tax payer.

I am fully aware of the difference between flats a and houses, leasehold and freehold; it's my profession. I am also fully aware of the working a of Local Government finances.

During the large scale council house building projects during the 60's and 70's large amounts of land were handed over for housing projects, in many Local Authorities this land is an asset owned, managed and maintained by the Housing Revenue Account. Many housing estates have common spaces such as greens, shared non-public footpaths and alleyways, in many cases these areas are actually part of the housing asset portfolio as opposed to being Public Open Spaces which is maintained from the General Rate Fund (council tax). Where land is owned by the Housing Revenue Account the cost of maintaining it is met from the HRA budget (tenants rent money). Over the years many houses on these estates have been sold Freehold but the common areas are still maintained using the HRA budget so the home owners make no contribution as often no GRF money is used to contribute to these costs.

Council policy on service charges is irrelevant if the actual lease doesn't reflect the policy. Go to a property tribunal and you will soon see that they won't care what the policy is, they are only interested in what the lease says. If the lease says a service can be charged for then it goes on to the next stage where they will decide if the charges are fair, reasonable and necessary. If you fail at the first bit and the lease doesn't allow for a certain charge the landlord is fighting a losing battle.

I do agree however that tenants and leaseholders don't always get the services that they are being asked to pay for, things do seem to be getting better but largely because tenants and residents are getting much more savvy, they are better educated on their rights and have much more support when it comes to holding their landlord to account.

onlyroz

I used to live in an ex council flat - the leaseholder was Wandsworth council - and the service charges were about £1200 when we left 7 years ago. We also had to contribute towards any "major works" in the block. The ones we encountered were for painting the windows (very badly so they would no longer open) for about £1000 and for installing secure entry doors for around £750.

Lioness_Twinkletoes

moremore wrote: »

It is the same with council blocks and I have seen contractors worker on roof of building sunbathing for hours on end and when finish they leave and go no work done and they do have to care as they will get paid regardless and will cost millions to the tax payer.

I am delighted to be able to say that my LA isn't like this. The works are tendered and are therefore a fixed price - no matter how long it takes.