Issue - items at meetings - Extending Payment Options for Council Leaseholders

Report of Head of Housing & Social Inclusion (copy attached).  

(1)       That the Cabinet Member for Housing agrees the following proposals for leaseholders in residence be agreed, throughout the term of the loan or arrangement only:

(a)       Brighton & Hove City Council offers additional payment options in the form of equity loans, maturity loans and monthly repayment loans over 25 years to leaseholders who are in financial difficulty and struggling to pay high major works bills as outlined in the report.

(b)       The council increases the interest-free repayment limit from 12 months to a sliding scale depending on the amount with a maximum of 5 years. (See table at 3.14 of the report).

(c)        The specific criteria to be met when offering these additional loans will be agreed by the Head of Housing & Social Inclusion and the Chief Finance Officer in consultation with the Cabinet Member.

99.1    The Cabinet Member considered a report of the Head of Housing and Social Inclusion which set out the financial assistance that was currently available to leaseholders and recommended that the council extended the payment options available, for high cost works where there were payment difficulties.

99.2    The Leaseholder Manager stated that the report had been discussed at Housing Management Consultative Committee on 19 March and that the proposals were unanimously supported at the Leaseholder Action Group on 16 April. 

99.3    Councillor Peltzer Dunn referred to paragraph 94.2 of the minutes of HMCC held on 19 March.  This stated that loans would only be available to council leaseholders who were resident in their properties.  He asked if it was possible to treat leaseholders differently with regard to this scheme. 

99.4    The Leaseholder Manager replied that officers could target help to leaseholders who were in danger of losing their homes.  The Senior Lawyer confirmed that there were various versions of Right to Buy leases in use throughout the city, some of which pre-dated the creation of Brighton & Hove City Council.  However, none of them included provisions relating to financial assistance.  That was available under separate subordinate legislation.  She offered to email a copy of a standard lease to Councillor Peltzer Dunn, but he did not consider it necessary.

99.5    Councillor Peltzer Dunn raised the issue of improvements to properties (as opposed to maintenance) such as over cladding.  He asked if leaseholders were properly protected in this respect. 

99.6    The Leasehold Manager replied that every leaseholder was protected in law in that costs must be reasonably incurred.  Leaseholders could go to the Leasehold Valuation Tribunal if they considered the council were not properly protecting their interests.  Meanwhile, disputes could be dealt via a three stage dispute procedure with the council.    There had been around 60 disputes every year on service charges.  Only two had gone to a tribunal.  Around 95% were resolved at stage 1 or stage 2.

99.7    RESOLVED – Having considered the information and the reasons set out in the report, the Cabinet Member made the following decisions

(1)       That the following proposals for leaseholders in residence throughout the term of the loan or arrangement only, be agreed:

(a)       Brighton & Hove City Council offers additional payment options in the form of equity loans, maturity loans and monthly repayment loans over 25 years to leaseholders who are in financial difficulty and struggling to pay high major works bills as outlined in the report.

(b)       The council increases the interest-free repayment limit from 12 months to a sliding scale depending on the amount with a maximum of 5 years. (See table at 3.14 of the report).

(c)        The specific criteria to be met when offering these additional loans will be agreed by the Head of Housing & Social Inclusion and the Chief Finance Officer in consultation with the Cabinet Member.

Report of Head of Housing and Social Inclusion (copy attached).

94.1    The Committee considered a report of the Head of Housing and Social Inclusion which set out the financial assistance that was currently available to leaseholders and recommended that the council extended the payment options available, for high cost works where there were payment difficulties.

94.2    The Leasehold Manager confirmed that loans would only be available to council leaseholders who were resident in their properties.  40% of properties were sub let at the moment and owners of these properties would be excluded from the scheme.

94.3    Councillor Peltzer Dunn referred to paragraphs 1.1, 1.3 and 3.9 in the report.  He queried whether leaseholders should be responsible for improvements to a property in addition to the repair of a property.  Over cladding for example was an improvement.   He considered that if the council was carrying out works to improve a block to meet Decent Homes Standards, that was a responsibility to tenants and should not be the responsibility of leaseholders.

94.4    The Leasehold Manager reported that Brighton & Hove leases allowed for works of improvement.   Costs must be reasonably incurred. 

94.5    Councillor Peltzer Dunn asked what would be considered reasonable.  The Head of Housing and Social Inclusion explained that some blocks required some cladding to ensure the property was water tight and met Decent Homes Standards.  The council would need to prove that the cost to leaseholders was reasonable. 

94.6    Councillor Duncan asked why there were already loans of up to 10 years for non resident leaseholders.  He asked if it was reasonable that tenants should subsidise leaseholders. 

94.7    The Leasehold Manager explained that 10 year loans had been a feature of what the council gives in its payment options.  The council was not looking to reduce options for leaseholders.  All costs were recovered with interest bearing loans. 

94.8    Tony Worsfold thanked the Leasehold Manager.  He stated that leaseholders wanted to see the proposals implemented. However, Mr Worsfold said he would like to discuss the proposals with his members before they became council policy. 

94.9    Councillor Mears expressed concern about the 12 month period proposed for an interest free loan (for amounts up to £2,000).   She felt this should be extended.  She stressed that many of the council’s leaseholders were elderly and works had a major implication on their finances.  Councillor Mears considered that some of the contracts were not best value for money.

94.10  John Melson considered the report to be excellent.  He reported that Hi Rise welcomed it.  However, he had reservations about interest free loans.  He had doubts about the 5 year period and said he would like to see interest free loans of 2 years or less. 

94.11  Councillor Peltzer Dunn suggested that the wording of paragraph 3.14 should be changed to read  “It is also proposed that Brighton & Hove extends the interest-free repayment period, for leaseholders who are residents only, from 12 months to the periods set out in the table below”.  This was agreed.

94.12  Councillor Robins asked about the fitting of fire doors for leaseholders.  The Leasehold Manager explained all exterior doors had to be fire and smoke proof for 30 minutes.  With regard to the fitting of fire doors there were different situations for leaseholders in Brighton and Hove.  It was agreed that a written note on this matter should be made available to all HMCC members. 

94.13  RESOLVED – (1) That the following proposals are noted.

(2)       That the Cabinet Member for Housing or the relevant committee be recommended to agree the following proposals after they have been considered by the Leaseholder Action Group.

(i)         Brighton & Hove City Council offers additional payment options in the form of equity loans, maturity loans, and monthly repayment loans over 25 years to leaseholders who are in financial difficulty and struggling to pay high major works bills as outlined in this report.

(ii)        The council increases the interest-free repayment limit from 12 months to a sliding scale with a maximum of 5 years for resident leaseholders. (See table at 3.14 of the report).

(iii)       The specific criteria to be met when offering these additional loans will be agreed by the Head of Housing & Social Inclusion and the Chief Finance Officer after consultation with the Cabinet Member or relevant committee chair.