Affected by the refurb of 550 Stevenage flat blocks? Your questions answered
PUBLISHED: 08:31 18 October 2019
The major refurbishment of 550 blocks of flats in Stevenage is landing council leaseholders with estimated bills of up to £20,000, causing concern.
Stevenage Citizens Advice
03444 111 444
The Leasehold Advisory Service
020 7832 2500
Money Advice Service
0800 138 7777
0808 808 4000
Stevenage Borough Council's Major Refurbishment Contract began last year with the Old Town, Longmeadow and Roebuck areas and is due to end in 2023.
All council-owned low and medium-rise blocks are included in the contract and work could include roof replacements and structural repairs.
The Comet put your most pressing questions to council leader Sharon Taylor.
What was the tendering process?
The work was put out to tender and advertised to companies who were invited to bid for the contract. As you can imagine, quite a number were interested and were invited to present their plans and costings to us. The two lowest cost tenders from Wates and Mullaley won the contract.
How are the costs worked out per block, including the proportion leaseholders are liable to pay?
Costs are shared within the individual flat block only. We look at the current insurance valuations for each property and calculate a percentage for each, regardless of tenure. Typically that's 11.1 per cent for a one bed flat; 22.2 per cent for a two-bed and so on. This means that smaller properties pay less than larger properties. We consider this the most fair and reasonable way to recharge as the larger properties are likely to have more equity and the owners more likely to be able to secure borrowing.
Not all items are recharged to leaseholders - tenants' windows and front doors for example - and we examine the last 10 years' worth of repairs to ensure we are not double-charging for any of the work.
When leaseholders receive their estimated bill they should talk to us if they believe they are being charged unreasonably for any work, and then we may be able to adjust it accordingly. It has been suggested that leaseholders are being forced to subsidise the tenants, but that isn't correct because they are charged for this type of work through their rent.
In an effort to keep leaseholders informed about the process we began engaging with them in 2016 through our leasehold forums and extended this to all residents in March 2017.
Will tenants' rent be increased as a result of the works?
In the last four years the government has said that we have had to decrease our rent by one per cent each year. This means that over our 30-year business plan we have lost £225 million pounds. Although we have not had confirmation from the government, we are expecting it to allow us to increase the rent, but it is not directly as a result of the works. With the exception of the last four years, there has been a rent increase each April.
Each year we notify our tenants of the rent changes around the end of February, to give them 28 days' notice.
There is concern leaseholders are being overcharged. Examples include £3,000 towards three fence panels and a gate, and £1,090 to strip and repaint a balcony.
How are costs arrived at and are you satisfied they are reasonable? If so, what measures have been taken to ensure value for money?
Most of the costs were in the original tender, but there are inevitably one or two items that might be unique to some properties and incur additional charges. We re-evaluate all costs when work has been completed and once we have the final bill we are happy to meet with leaseholders to discuss how we arrived at the figure.
No-one is getting charged £3,000 for a gate. When we ask our contractors to quote for works, we provide them with provisional quantities of work we expect them to do, and they can provide a price against those quantities. These prices are then used to determine the cost of the actual quantity of work, which is measured at the end of the job.
Leaseholders make up around 30 per cent of the total number of people that are affected by this contract, so the majority of the costs are being covered by the rent that tenants have paid over the years.
Why are such major works required now? Could more regular maintenance of the blocks have avoided it?
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We accept that in an ideal world we would have delivered a steady cyclical maintenance programme. The reality, however, is that government funding has been cut year-on-year and we have had to make difficult decisions on spending across the board to protect vital services. From now on we will have a planned maintenance programme to ensure that flat blocks are maintained regularly.
There is concern the repayment options all incur interest, increasing people's debt and inflicting hardship. Why are there no interest free options?
All leaseholders have six weeks from when the bill is issued to make payment to the council. Then there are several payment options available to leaseholders, from discounts for early payments, to statutory and discretionary loan schemes to help meet the cost of the works to their homes.
The council also has discretion to make sure that those in extreme hardship are helped with the bills, by deferring payment and placing a charge on the property. However, if an extended interest-free period were offered, this would have to be paid for from the council's housing account - tenants' funds - and this could affect other planned works and our ability to pay for the loans that help fund the major works programme.
To be fair to all our customers we have put in place payment options to give them a range of choices and to enable us to deal with any exceptional cases of hardship, where they occur. We feel that this package of options is fair, but will deal with any individual cases where customers are facing difficulty.
Is it true that leaseholders will have the option of paying nothing and having the money owed deducted when they eventually sell their property, accruing no interest in the meantime?
We recognise that many people are unclear about the payment process and that it is causing a great deal of worry for some residents. We want to try and help alleviate that stress. Nobody likes receiving a big bill and we are happy to walk through the process with them to try and make it as painless as we can.
While the majority of residents understand their obligations as leaseholders, I know there have been others who are worried about not being able to pay, and even losing their home because of the size of the bill. That's not the outcome that we want for anyone, and I would like to reassure our residents that they will not lose their home because of the cost of the refurbishment work. We will always work with them to find a solution that works for all parties.
It's true, in exceptional cases, that we could put a charge on the property that means the money would be paid when the property is sold, or transferred. The amount owed would have interest added to it until it's paid, so we would look at all the options before we arrive at this point.
I understand the work is only guaranteed for one year. If this is the case, what assurances can you give that further works will not be scheduled within the next few years?
What we call the Defect Liability period is one year. That means that the contractor will put right any problems with the works completed during that period. After that, inventory such as roofs, windows etc will be under a standard warranty for such items and, in the event of any further problems after the first year, residents can contact us and we will invoke the terms of the guarantee with either the contractor or the manufacturer, whichever is applicable.
These major works are necessary in order to bring the properties up to standard but, once they are completed, a programme of regular routine maintenance will be in place. We don't, however, envisage it being on the same scale and intensity as this project.
If a leaseholder wishes to make a complaint, what is the process?
They should get in touch with us at email@example.com or call us on 01438 242242. Staff are always happy to talk to tenants and leaseholders to try and allay any concerns and resolve any issues.
If, for any reason, a resident is not satisfied with the response to any complaints, they can contact the Leasehold Advisory Service which will be able to advise them on mediation, arbitration or, ultimately, a tribunal hearing.
Leaseholders have said they feel powerless. Do they have any control over the process, or is there any action they can take?
Absolutely. I can appreciate that it must seem daunting to talk about bills of such a size, but we want them to know that we haven't just left them to it and that they can engage with us in a number of different ways, such as our quarterly leaseholder meetings and through our officers here at the council.
Unfortunately, if we want to bring our homes up to standard there is going to be a cost and, of course, that's not going to win us any new fans, but the end result will be housing that is greatly improved, safe and secure inside and out, which is better for our town and our people.
For more on the works visit stevenage.gov.uk/housing/council-housing/111967/202963.