Introduction

A few weeks before Christmas (2017) leaseholders on Edmundsbury Estate were sent bills for over £1,400 each from Lambeth Council for Major Works. The works were the installation of the door entry systems that were installed in 2013. Some leaseholders had been sent bills earlier in the year, not stating the nature of the works. Some leaseholders were reluctant to pay this bill as it was so old, some were tenants in 2013, not leaseholders, others didn’t live here in 2013. When we looked into it, we read under Section 20B of the Landlord and Tenant Act 1985 (the Act):

“if the freeholder incurs relevant costs that are more than 18 months old, then the freeholder is required to serve notice on the leaseholders in accordance with section 20B(2) informing them that they will be required to contribute towards these costs at some future time”

We understood from this, that in addition to the Council issuing a Section 20 Notice for expected costs of major works, then they have to charge leaseholders within 18 months or issue Leaseholders a Section 20B notice within that 18 months.

Many leaseholders didn’t pay this bill, a few set up to pay by instalments. In addition, whilst some leaseholders were told that they had to pay this bill into a separate account to their regular day-to-day service charges, other residents were told that their regular day-to-day service charges, that they had been paying for years by standing order, were not being paid. When they questioned this it appeared as if Lambeth Council had changed the account numbers so their regular service charges were paying for the Major Works – the bill that they had refused to pay.

Another leaseholder was accused of not paying previous year’s service charges, but no bill, receipt or evidence was forthcoming.

Jonathan Harbourne wrote on behalf of Edmundsbury Estate leaseholders (after emails from other leaseholders had not been responded to) to Chris Ojo from Homeowner Services seeking clarification. Our new Councillor, Cllr Irfan Mohammed, supported us by issuing a ‘Member’s Enquiry’ – so that an Officer would be compelled to respond to our questions.

 

Letter and Response

Original Letter sent from Edmundsbury Estate to Leaseholder Services
Sent:
27 June 2018 17:39

Dear Chris Ojo, Lambeth Council Homeowner Services

I understand that Tim, the acting chair of the Edmundsbury Leaseholders Group, has invited you to meet the leaseholders of Edmundsbury Court Estate on any Monday evening at our community hall. I understand that he hasn’t received a reply yet.

We have our next Quarterly Residents Meeting on
Monday 23rd July 7-9pm, Edmundsbury Community Hall
and warmly invite you to attend.

If not, the original invitation of any Monday evening before August is still open!

There are some common questions that leaseholders are asking – as certain people have been given different information.

1a. In respect the 2013 intercom replacement bill that Edmundsbury Leaseholders received in November 2017:
Works must be invoiced to leaseholders within 18 months of the freeholder incurring the cost.
• What date did you become contractually required to make payment to the contractor – can you produce the bill?
• Why did you wait 4 years to invoice Leaseholders?
1b. Did you, within the period of 18 months beginning with the date when the relevant costs in question were incurred, notify the leaseholders in writing that those costs had been incurred and that they would subsequently be required under the terms of their lease to contribute to them by the payment of a service charge?
• If you did – can you produce the communication.

2a. Please state which account number is for Major Works, and which account number is for regular annual service charges.
2b. Leaseholders have been accused of not paying their regular annual service charges by Lambeth, because their payments have been diverted into the Major Works Account.
Have you recently changed these account numbers around? How and when did you communicate this to Leaseholders?
2c. If leaseholders understood that they were paying their regular annual service charge, but because the account numbers were changed, the money has not gone to where they intended:
• What is the process for them to rectify this?
• How long does it take?
• What assurance can you give them that this has been rectified once and for all?

3. Leaseholders have been accused by Lambeth of not paying previous year’s bills in full.
No evidence, invoices or receipts, have been produced for these bills.
• Is this your normal practice?
• Can leaseholders expect details of apparent unpaid bills?

4. If a resident reports a problem with a building – the repair is prioritised but not repaired –
• what is the mechanism/action can we take to get the repair done?
(Some simple repairs we reported a couple of years ago, and every quarter since, are causing damage to flats which is incurring more costs to Lambeth).

The Edmundsbury Leaseholders look forward to your answers to all the above questions in a timely fashion, and hope that you can attend either a Leaseholders meeting or our Residents Meeting.

I look forward to attending the The Lambeth Council Homeowners Assembly scheduled for Thursday 5 July 2018 from 6:30pm to 9pm at the Town Hall in Room 1-16.

Many thanks
Jonathan

Jonathan Harbourne
8 Glasbury House
Edmundsbury Court Estate
Ferndale Road, Brixton
London SW9 8AY UK

07939 490702

CC. Ferndale Councillors and Lambeth MP

Ifram – if we don’t get a response to this within a week – would you ask this as a ‘Members’ (ME) Enquiry’. The council target is to respond to 90% of MEs within 10 working days.

Response from Leaseholder Services to Edmundsbury Estate
Received 12th July 2018 at 12:34

Thank you for your below email to which I respond with the following.

After communicating your enquiries listed under section 1 with the Section 20 Manager, Karen Kellaway, she has provided the following response and attachment.

1a: The first payment certificate for this contract is dated the 30 January 2014 and I have attached all the payment certificates to this email.

Before April 2017, the Councils processes have not been as robust as they could have been and it led to delays between receipting the final account and issuing it to leaseholders. As soon as the final account for your estate was received by Home Ownership Services, it was calculated and invoiced swiftly. I can only apologise for the delay you have experienced.

1b: Leaseholders were informed of the costs apportioned to them for the major works programme via an estimated invoice dated 19 December 2013. I have attached a sample of an estimated invoice for this works as per request. A breakdown of costs was provided and there were notes on how cost was calculated and how to make payments.

If you have any further enquiries in relation to the above you can contact the

Section 20 Manager
Karen Kellaway directly with the following details.
Email: kkellaway@lambeth.gov.uk
Telephone: 020 79263715.

2a-b I have attached a copy of both your 17/18 and 18/19 service charge estimate, both of which provide information relating to questions 2a-c. Please review the first few pages, after which point I suggest it would be helpful if you are able to either relay this information to your resident association at your next meeting, or provide them with copies of the relevant information.

2c: For residents who have failed to use the correct reference when making payments, resulting in payments being allocated to the oldest outstanding debts, a request can be made by email or post asking that relevant payments are moved across from one invoice to another. Please note, the exact amount, date and number of payments must all be stated in order that payments are moved across correctly. This process can take up to 28 working days, after which point a resident can request a statement or login to their My Lambeth account and view and up to date statement on line.

3: It is expected that leaseholders are firstly aware of their account balance, whether it be debit or credit. Lambeth provide access to individual accounts via ‘My Portal’ located on the Lambeth Council website. All are also able to request an up to date statement at any point via several methods, such as phone and email. For those who wish to query bills further we offer an appointment service at our Civic Centre or alternatively, similarly to the above we can be contacted by various methods.

4: As you can appreciate, you have contacted the Service Charge Collection Team and not the Repairs Department, despite this I have managed to obtain the below information in relation to issues revolving around repairs.

Where you have reported a repair and are unhappy with the developments, you have a choice of contacting your local area housing office which can be done via the contact centre on 020 7926 6700 or you can raise a complaint using the Lambeth Website directly to the Repairs Department, which will be logged and monitored.

I hope the above is of help and if you require further information you can contact me by reply.

Regards

Chris Ojo
Service Charge Coordinator
Housing Management
London Borough of Lambeth
Phone: 020 792 63743

Email: cojo@lambeth.gov.uk
www.lambeth.gov.uk

London Borough of Lambeth
Homeownership Services
PO box 734
Winchester
SO23 5DG

Were all the questions answered and what do they mean?

1. Do Leaseholders have to pay the major works bill for the 2018 intercom?

Don’t Know – we should ask a Lawyer

Leaseholder services informed Leaseholders of the costs apportioned to them for the major works programme via an estimated invoice dated 19 December 2013. The Payment Certificates for this work were signed on 2 July 2014. They did not pass this bill on to leaseholders within 18 months, it took them 40 months to do so.

“Before April 2017, the Councils processes have not been as robust as they could have been and it led to delays between receipting the final account and issuing it to leaseholders. As soon as the final account for your estate was received by Home Ownership Services, it was calculated and invoiced swiftly. I can only apologise for the delay you have experienced.”

When asked if Lambeth communicated about this bill between the first S20 and the final bill being presented in November 2017 they responded “Leaseholders were informed of the costs apportioned to them for the major works programme via an estimated invoice dated 19 December 2013 – so “no”.

The Leaseholders Advisory Service said: “If that period is more than 18 months from notification of the demand for payment [November 2017], and where a notice under section 20B was not served on you, you may be in a position to challenge the demand for payment.”

I think we now have enough information to pass on to a solicitor to see if they recommend challenging this Major Works bill. My suggestion is to write to Pam Douglas from Wainwright & Cummins, who wrote an article in the Brixton Blog about this very issue.

 

2. Have Account Numbers for Regular Service Charges and Major Works bills changed?

There is now One Account but you have to quote the correct Invoice Number

Lambeth sent out a letter dated 26th February 2018 that states:

“Your account number (the 9 digit payment reference number on your statements) remains the same, this will not change. You can still pay using your 9 digit account number, but when you do the payment will be automatically allocated to invoices on your account. If you quote an invoice number when making payment, your payment will be allocated to a specific invoice. This makes it possible to see exactly which invoice a payment has been made against, as each invoice has its own balance.”

If you have made payments intended to pay your Regular Service Charge, but have an outstanding Major Works bill:

“a request can be made by email or post asking that relevant payments are moved across from one invoice to another”.

3. Can Lambeth make you pay for a bill that you think you’ve paid without producing evidence?

Lambeth referred us to the ‘My Portal’ website as evidence of where up-to-date accounts are kept. I’ve just logged on an added my 7-digit Housing Reference Number so I can see my Service Charges (my Council Tax was already set up). When access is granted (when I get my ‘unlock’ code in the post) I’ll let you know how I get on – and I’ll ask the particular leaseholder who was presented with past bills if all the information is up-to-date on this system.

4. Is there a mechanism/action can we take to get urgent repairs done?

Yes – make a complaint: https://www.lambeth.gov.uk/council-tenants-and-homeowners/about-lambeth-housing/complain-about-housing-management

I will make a complaint of some repairs that I have reported over three years ago – I’ll keep you updated as to how long it takes for them to be resolved.

Client Number: 853834
Enquiry Number: 633333
 
Dear Mr Jonathan Harbourne,
 
Thank you for your enquiry of 15/01/2018.
 
Please note that the position under Section 20B of the Landlord and Tenant Act 1985 (the Act) is that if the freeholder incurs relevant costs that are more than 18 months old, then they are required to serve notice on the leaseholders in accordance with section 20B(2) informing them that they will be required to contribute towards these costs at some future time.
The notice must contain a specified amount of the overall  spend, even if it is an over estimate.
It will be important to consider when the costs were incurred for the purpose of recording the time. The case of Burr v OM Property Management Ltd [2013] EWCA Civ 479;  [2013] WLR (D)  164 makes it clear that time starts to run for the purpose of this rule from either when the freeholder is presented with a demand for payment or when payment is made. I attach a link below to some information on the case for your benefit.  
 
In this regard, time starts to run from the period the freeholder council became contractually required to make payment to a third party contractor. You will need to make enquiries about when payment in respect of these services were paid or needed to be paid. If that period is more than 18 months from notification of the demand for payment, and where a notice under section 20B was not served on you, you may be in a position to challenge the demand for payment.  
     
In other words although you received the invoice in November 2017, and it states that it is for works carried out in 2013/14, you will only be in a position to obtain the benefit of the 18 month rule if payment in respect of the works was made within 18 months of receipt of  the invoice by the council  or the invoice was received within an 18 month period prior to November 2017 and the council failed to serve notices under section 20B(2)  of the Act that you will be liable to contribute to the cost.
It will be crucially important for you to obtain information from the council about when payment was made or an invoice received in respect of the cost, and to ascertain whether or not 18 months has passed since that time without the relevant notification to you and others.       
 
Where you do not consider the demand payable, then it is possible to make an application to the First-tier Tribunal (Property Chamber) for a determination about the reasonableness and payability of such a demand.
Regrettably, the Leasehold Advisory Service does not provide property litigation advice and I am unable to comment on the merits of your claim. You will need to seek specialist advice thereto.
 
I hope my comments prove helpful, but if you have any questions please feel free to contact LEASE again quoting your Client Number 853834. You can telephone on 020 7832 2500 or reply to this message using the link below.
Finally, you are invited to use the link below to complete a short survey regarding this response to your enquiry. Your answers help us maintain and improve the quality of our service.
Yours sincerely,
Alero Orimoloye
 
Leasehold Adviser
The Leasehold Advisory Service
Fleetbank House, 2-6 Salisbury Square, London, EC4Y 8JX.
Telephone: 020 7832 2500
Fax: 020 7832 2529

Click to download letter in full in PDF


 

22 August 2018

The council has issued a service charge invoice in respect of major works service charges which have been undertaken to your block or estate.

The council acknowledges that in this particular instance we may not have served you with a service charge demand or notified you by way of a S20B notice within 18 months of the costs being incurred;

[20B Limitation of service charges: time limit on making demands]
(1)If any of the relevant costs taken into account in determining the amount of any service charge were incurred more than 18 months before a demand for payment of the service charge is served on the tenant, then (subject to subsection (2) ), the tenant shall not be liable to pay so much of the service charge as reflects the costs so incurred.

(2)Subsection (1) shall not apply if, within the period of 18 months beginning with the date when the relevant costs in question were incurred, the tenant was notified in writing that those costs had been incurred and that he would subsequently be required under the terms of his lease to contribute to them by the payment of a service charge.]

However, the Council’s position remains that through the service of the S20 notice, emails, site meetings and correspondence on the matter, you would be aware of the councils intention to issue a service charge demand for the costs which the council have incurred undertaking works to your block or estate.

The council’s position is quite clear. Section 20B of the Landlord and Tenant Act 1985 does not prohibit the landlord from demanding monies. It is simply not equitable for the Landlord not to raise service charge demands for work which it has undertaken and paid for.

The council as your landlord has an obligation to undertake the maintenance repair renewal reinstatements improvements rebuilding cleaning and decoration of our blocks and estates, which will have added value to your property.

Within a ring fenced HRA, any service charge demands which are not paid by the leasehold owners will ultimately be paid by the tenants, who in essence will be subsidising homeownership.

From the Councils perspective, we believe the approach taken to construct your final account is reasonable. Furthermore, we have provided all the documentation currently available to support the final account and charges. We are more than happy to address any further questions around the documentation provided, however, to be clear we have now provided you with everything currently available to justify the costs incurred.

The council is seeking a contribution to the costs of the works incurred, of which, your property has benefitted from. The council will continue to contact you to discuss your service charge demand and the methods of payment available to you.
I would therefore suggest that you contact the Collections team on 02079267132 and enter into a payment plan to settle the invoice.

I trust the above has now clarified all the points you have raised in your enquiry.
Kind regards

Johnson Ajayi
Leasehold Team Leader
Housing Services
London Borough of Lambeth
Phone: 020 7926 6266
Mobile: 07720 827492
Fax: 020 7926 3482
Email: jaajayi@lambeth.gov.uk