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REVIEW OF THE HOME OWNERSHIP SERVICE

REPORT OF THE PERFORMANCE REVIEW COMMITTEE

London Borough of Islington

January 2003

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REVIEW OF THE HOME OWNERSHIP SERVICE REPORT OF THE PERFORMANCE REVIEW COMMITTEE

FOREWORD FROM THE CHAIR

It is my pleasure to introduce this first scrutiny report of the Performance Review Committee on the topical subject of the Home Ownership Service. The right to buy legislation of 1980 has provided generations of Council tenants with the opportunity to purchase their properties at discounted rates and become leaseholders. Leaseholders have often exercised their choice and sold their properties in order to purchase a more appropriate property either in Islington or outside the borough. Recent publicity concerning the future of the right to buy option has created a surge of interest and activity in Islington with over two thousand applications expected by the end of the year 2002 / 2003. The most recent plans to reduce the maximum discount from £38,000 to £16,000 in March 2003 will almost certainly stimulate a further surge of applications. It is clearly an appropriate time to scrutinise the whole process of right to buy to leaseholder status in order to improve the service to tenants in this transition phase and ensure continued high quality service to the ever growing population of leaseholders ( currently almost 9000 ). Many observers consider the scrutiny process as one of the most challenging elements of the new local government structures and a real opportunity to scrutinise a subject in some depth in order to make evidence based recommendations and generate added value to a key service. The Performance Review Committee consisted of ten elected Members (eight Liberal Democrats and two Labour) working with senior Council officers to conduct a detailed investigation from the right to buy process for tenants through to the services provided to leaseholders who were former Council tenants and secondary leaseholders who have purchased property on the open market. On behalf of my Committee Members, I would like to thank individual leaseholders, leaseholder forum members, leaseholder representatives from Area Housing panels, Executive members, Members, senior Council officers, local estate agents, and officials from Westminster and Barnet who have all made invaluable contributions to the scrutiny process and provided much of the evidence which supports the recommendations contained in this report. We hope that this report will help to improve the service given to right to buy applicants and in the long term, the growing population of leaseholders in Islington.

COUNCILLOR GRAHAM BAKER CHAIR OF PERFORMANCE REVIEW COMMITTEE

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MEMBERSHIP OF THE PERFORMANCE REVIEW COMMITTEE

Councillors: Graham Baker (Chair) James Blanchard Dorrie Valery (Vice-Chair) Graham Hay Smith Lucy Watt Stefan Kasprzyk Doreen Scott Richard Greening Terry Stacy Barbara Sidnell Substitute Councillors: Sarah Teather Jonathan Dearth Angela Brook Joan Coupland Bruce Neave Carol Powell Keith Sharp Heather Johnson Daniel Bonner Derek Sawyer ACKNOWLEDGEMENTS The Performance Review Committee would like to thank the following groups and individuals who have provided invaluable contributions to the scrutiny process, offered constructive criticism of the current service, and helped to shape the recommendations contained in this report. These groups include: Leaseholders Forum and Panel Members, individual leaseholders, Council officers, Executive Members, Members, local estate agents and representatives of Westminster and Barnet Councils. OFFICER AND MEMBER SUPPORT Scrutiny Committee Section: Joe Watts, Peter Moore Housing Services: Eamon McGoldrick Assistant Director of Housing (Housing Management) Home Ownership Services: Simon Kwong Nigel Freeman Legal: Helen Coyle Building Services: John Phillips Valuation: John Fisher Members: Councillors Jyoti Vaja and Ed Featherstone

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RECOMMENDATIONS FROM THE PERFORMANCE REVIEW COMMITTEE

1. Right To Buy (RTB) Process

Completion of RTB1 forms

1.1 A validation service is provided on receipt of the RTB1 form to check that the form is completed properly (similar to the services offered by the Post Office for passport applications).

1.2 Staff time should be offered to RTB applicants to explain the whole RTB

process to the tenant so they clearly understand their statutory rights and the key stages and timings of the process.

1.3 Suspected fraudulent claims should be separated from the mainstream

process and investigated by means of a personal interview and home visit as a high priority.

Receipt of RTB2 forms by tenant

1.4 Clear communication should be given to applicants of the next stage of the RTB process, i.e. the issue of a Section 125 notice with property valuation, tenant discount, estimated service charges and estimates of major works over the next five years.

RTB2 to issue of Section 125 form 1.5 For valuations, home visits should be maximised using a seven day working

week and phone calls made on the day to confirm appointments. 1.6 A random sample of valuations should be validated by an experienced

independent estate agent. The agent should visit within ten days of original valuation.

1.7 An analysis of all valuations in a sample month should be validated against

established local price databases. 1.8 For serial applicants who are simply looking for a valuation, consideration

should be given to charging a fee for repeat applications which will be refunded in the event of the RTB process being completed.

1.9 Real case histories should be produced to illustrate the short term and long

term benefits of the RTB process for tenant applicants. Acceptance of offer to RTB completion 1.10 Tenants who accept a fast track service should be given a clear timetable and

high priority. 1.11 Tenants who wish to proceed at a slower pace should be provided with

quarterly updates on progress and the option to ask for high priority if needs change.

2. The Leaseholder Transition from Tenant to Leaseholder 2.1 Leaseholders to have the option of a personal interview to explain their first

service charge bills.

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2.2. A personal interview should be offered within the first three months of becoming a leaseholder in order to explain rights, access to services, the detail of service charge bills and payment facilities.

Communication to Leaseholders 2.3 A baseline should be established to measure and monitor leaseholder

customer satisfaction for the year 2002/2003 and subsequent years. 2.4 The profile of the Leaseholders Forum should be raised by increased publicity

and promotion from the Home Ownership Office, Area Housing Offices, and through Area Committees.

2.5 Work should be undertaken to maximise de-centralising leasehold services to

the Area Housing Offices. 2.6 The clarity and transparency of service charge bills should be improved in

conjunction with the Leasehold Forum. 2.7 Advice and information should be given to leaseholders on the implications

for them when the freehold of their homes is to be offered for disposal by the Council with leaseholders being encouraged to purchase the freehold where appropriate.

2.8 The feasibility of an e-mail newsletter should be investigated for a majority of

leaseholders. Leaseholder Management – Major Works 2.9 Full consultation should be carried out on all major works projects according

to leaseholders rights. 2.10 Independent monitoring of the building work should be carried out in

conjunction with members of the Leaseholders Forum. 2.11 The identity, location, telephone number and duties of the Clerk of Works to

any major works project should be made known to all affected residents. 2.12 Leaseholders on low incomes, e.g. pensioners are provided with financial

advice prior to major works. 2.13 A regular monitor of predicted and actual expenditure for major works is

carried out. 2.14 Consideration to be given to major works bills being explained to a

leaseholder representative (or representatives) who then acts as a local liaison person to all affected leaseholders.

Secondary Leaseholders 2.15 A special induction pack should be provided for all new secondary

leaseholders. 2.16 An introductory letter from the Leaseholders Forum should be sent to all new

secondary leaseholders informing them of the support available to them. 2.17 When the new Home Ownership Computer System is implemented it should

be set up to produce statistics on primary/secondary leaseholders.

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1. INTRODUCTION The Overview Committee approved the priority topics for scrutiny in 2002 / 2003 at its meeting on the 25th June 2002. The Performance Review Committee was actioned to carry out a detailed review of the Home ownership Service during the first six months with a final report delivered in January 2003. 2. OBJECTIVES OF THE REVIEW The objectives of the Review agreed by both by Overview Committee and the Performance Review Committee were as follows – ‘To consider whether the services of the Council provided to Right to Buy applicants and leaseholders are appropriate and of the right quality and to conduct a review of that provision and make recommendations to improve the service’ Full details of the scope of the Review and the Committee’s Work Programme are set out in Appendices A and B to this report. 3. METHODOLOGY AND TIMETABLING OF THE REPORT 3.1 Following the agreement of the Scrutiny Initiation Document by the

Performance Review Committee on 1st August 2002, officers designed a programme of work, taking into account the number of visits Members wished to undertake and evidence they wanted to receive. (See Appendix B).

3.2 The methodology undertaken in securing evidence from witnesses was

varied and was required to be flexible to get the most information possible. Visits were undertaken outside of the Town Hall and when required took place during the working day. This was particularly the case when visiting other Local Authorities and outside organisations e.g. estate agents.

3.3 Members received evidence at formal meetings of the Committee, but

also in smaller ‘sub-groups’, with information received being fed back in circulated Committee papers and through the reporting of the Chair.

A summary of the notes of visits, meetings and witness sessions is set out in Appendix C to this report.

3.4 The majority of target groups for scrutiny were readily accessible to the

Committee or sub-groups of the Committee. However, it proved difficult to recruit individual leaseholders to discussion group meetings at the Town Hall with the result that only one discussion group was possible during the timeframe of the investigations.

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4. BACKGROUND 4.1 For over two decades Council tenants have had the Right to Buy for

their properties. Houses are usually sold freehold, but with flats and maisonettes, only the leasehold interest can be sold and the freehold remains with the Council. This has resulted in Housing Departments having to adapt their normal landlord function from dealing solely with Council tenants to dealing with a mixture of tenants and leaseholders.

4.2 Last year the Council sold 850 properties under the Right to Buy

Scheme and yet retained the freehold interest in over 95% of the sales because they were maisonettes/flats. At the 31st March 2002 the Council managed 30,872 tenancies and 8,442 leaseholders.

4.3 It was anticipated that the sales of flats would run at approximately 700

per annum for the foreseeable future. However, the Government’s recent decision to reduce the amount of discount given to right-to-buy applicants may well reduce this figure by an amount which it is difficult to estimate at this stage. Even in the event of a reduction in the number of sales there will still be an increased emphasis on leaseholder services with a corresponding reduction in the provision of services to Council tenants.

4.4 As a result of the above, the Director of Housing has been reviewing procedures, policies and structures to meet the demands of the increasing leaseholder portfolio and at the same time Members have been reporting increases in enquiries from leaseholders, particularly in respect of service charge bills and leaseholder consultation/ participation. 4.5 For example, until recently there has been a serious lack of investment

in planned maintenance. The Housing Department has now set up a cyclical programme of external decorations and repairs. Leaseholders concerns have shifted from the lack of investment to how can they influence the works being specified and pay the resultant bills.

4.6 For these reasons Members identified Home Ownership Services as a

priority subject for scrutiny in this municipal year and the scope of the scrutiny exercise can be found at Appendix A.

Tenant/Leaseholder Ratios

Tenants Leaseholders Total Stock Leaseholders as % of Total Stock

April 1983 41,000 209 41,209 0.5%

April 1992 38,173 3,818 41,991 9.1%

April 2002 30,585 8,442 39,027 21.6%

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5. THE COMMITTEE’S FINDINGS Right to Buy Process Completion of RTB1 forms 5.1 There did not appear to the Committee to be any major problems in the

completion of the RTB1 forms by tenant applicants with self-completion the usual method away from the Home Ownership Office. Help and guidance is available if required and clearly there is an incentive for the tenants to complete this form quickly as the valuation of the property is fixed to the date of application.

Issues Identified

There are some problems with completion of the forms which can contain incomplete or inaccurate information.

The early detection of fraudulent claims is important to the process

The staff time involved in dealing with over 2000 applications in 2002/03 and probably more than 2000 in 2003/2004.

Receipt of RTB2 forms by tenants 5.2 The Council fulfils its statutory obligation in sending RTB2 forms

(acceptance of application) within the 8 week target period. Home Ownership officers informed the Committee that the speed of turn round of the forms did not significantly increase the risk of fraudulent claims remaining undetected at this stage.

Issues identified

The speed of this stage may raise expectations of the overall speed of the RTB process.

RTB2 to issue of Section 125 form 5.3 The key elements of the Section 125 are a valuation of the property

backdated to the date of application, tenant discount, estimated service charges and estimates of major works over the next five years. Valuation is based on a detailed inspection of the property followed by drawing up of detailed plans. This stage is rarely completed within the statutory target and a key focus of the Committee was to determine how the process could be improved.

Issues identified

Staff levels limit the turn round time for valuation based on home visits.

Valuation needs to be conducted in daylight which limits time available in winter months.

As much as 50% of valuation appointments are not kept by the tenant.

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There is a perception that the Council undervalues its properties – 90% of applicants accept valuations without challenge.

In the 10% of cases where an appeal is made to the District Valuation Officer, the majority are either reduced or remain the same. Only a small percentage (5%) of appeal valuations are increased on appeal.

Acceptance of offer to RTB completion 5.4 The acceptance of the offer by the tenant initiates the legal process of

conveyancing between the solicitor acting for the tenant and the Council’s Legal Department. The target for completion is rarely achieved although it is known that a major factor is the tenants opting for a slow process to completion. As the price of the property is fixed, actual price inflation is not a problem to the tenant.

Issues identified

Can the conveyancing process somehow be speeded up if both parties agree a completion timetable.

Transition from Tenant to Leaseholder New and Mature Leaseholders 5.5 When the transition from tenant to leaseholder is completed (approx.

700 per year) the goodwill earned by the Council can quickly be dissipated by the first service charge bills. Leaseholders readily accepted the principle of service charges but often object to the lack of clarity in the billing and charges for low level or non-existent activity.

5.6 Mature leaseholders often expressed the same concerns to the

Committee including the perceived excessive year on year increases in service charges. They often considered themselves as the new target or victim of the Council in receiving demands for higher charges.

Issues identified

The early perception of the leaseholder can determine the long term relationship between leaseholder and the Council.

Levels of customer satisfaction may deteriorate rapidly as a result of large and obscure service charge bills.

Leaseholders were not fully aware of the range of services offered by the Home Ownership Office in Tufnell Park Road and often preferred to use the Area Housing Office which they had used as a tenant.

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Communications to Leaseholders 5.7 The meetings that the Committee held with the Leaseholder Forum,

Leaseholder representatives on Area Housing Panels and individual leaseholders highlighted common areas of concern relating to service charges and major works. The problems relating to service charges concerned clarity of billing, charging for poor or non-existent services, e.g. caretaking, excessive increases year on year, a lack of consistency in billing between similar properties, and the need to pay in advance.

5.8 The Committee heard from the Assistant Director of Housing about the

Council’s policy of disposing of its freehold interest where the entire property was now occupied by leaseholders. The Council receives no benefit from blocks which are 100% leasehold. However, it retains liability for freeholder/landlord responsibilities which can be onerous.

Issues identified

There was consistent evidence from discussions with leaseholders of a perception of inadequate service from the Home Ownership Office in terms of slow response to letters or telephone enquiries.

There was also some evidence of a critical attitude towards leaseholders, in particular, in terms of their expectations of service from the Council.

Some leaseholders felt that they were now seen as a good source of income for the Council and a sitting target for increasing bills.

For blocks sold 100% leasehold, although the Council’s freehold interest was offered to the leaseholders in the first instance, many leaseholders had not yet responded despite being informed that in the event of them not taking up the offer, the freehold would be offered for sale on the open market. The Committee felt leaseholders needed to be given more advice on this matter.

Leaseholder Management – Major Works 5.9 The planning and execution of major works is clearly an area of

potential friction between the leaseholder and the Council. There were general criticisms at all stages: the lack of major works being done, inadequate consultation before major works, high projected costs, poor contractor management and often poor quality of work.

5.10 In some cases the disputes are taken to the Land Valuation Tribunal.

Lessons learned from these cases are now being incorporated into revised policies and procedures.

Issues identified

There are clearly stated statutory rights for the leaseholder regarding major works and it is important to monitor each project to ensure these rights are observed.

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The major works bills are likely to be the largest bills ever received by the leaseholder and will inevitably cause distress and concerns, particularly for leaseholders on low incomes, eg. pensioners.

Contractors will have a key role in achieving customer satisfaction through a project well managed and well executed.

Concern has been expressed that actual costs of major works to individual leaseholders are often higher than estimated costs.

Secondary Leaseholders 5.11 Since the initial RTB legislation in 1980, the leaseholder population in

Islington has grown steadily to almost 9000. Many of the original leaseholders have sold on and moved out of the borough. As a result, there is now a significant sub population of secondary leaseholders who have had no former contact with the Council.

Issues identified

Secondary leaseholders may be less critical of the service charges involved but soon become involved when major works are planned.

Secondary leaseholders may be less well informed as to their statutory rights and responsibilities as leaseholders.

The attitudes and expectations of secondary leaseholders may be quite different from former Council tenant leaseholders.

Management of primary and secondary leaseholders plus the interface with Council tenants is a major challenge to the Home Ownership Service.

6. CONCLUSIONS

6.1 The Performance Review Committee concluded that the right to buy process was conducted with a reasonable level of efficiency. Delays were often as a result of the tenant opting for a more gradual process. However, there was some evidence of systematic undervaluing of property with 90% of tenants accepting the Council valuation, usually after checking with a local estate agent. There was also some evidence of a lack of effective communication to tenants of their new responsibilities as leaseholders.

6.2 There was considerable evidence of growing dissatisfaction amongst

leaseholders regarding the bills for service charges. These concerns centered on the clarity of the bills and the charges for poor or non – existent services, eg caretaking and gardening.

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6.3 The Leaseholder Forum is intended as conduit for leaseholders to

channel their complaints and concerns to the appropriate Council departments. There was clear evidence of a lack of awareness amongst leaseholders of the role of the Leaseholders Forum and more publicity is needed to raise the profile of this important group.

6.4 Major works are also reported as a key area of concern both in poor

consultation prior to the works, indifferent contract management, low quality workmanship and ultimately excessive bills. There is clearly a need for better consultation and communication before , during, and after major works projects. It is recognised that the Clerk of Works should be clearly identified as a key person to monitor complaints from tenants and leaseholders.

6.5 It is recognised that the large leaseholder population is a far from

homogenous group with the result that modern methods of communication such as e-mail may only be helpful to a minority. However, efficient communication is clearly a priority in order to ensure that leaseholders are well informed and receive good standards of service from all Council departments.

6.6 The recommendations in this report have not been costed, however, it

is recognised that the use of external valuers and weekend working will have some cost implications.

6.7 It is predicted that the implementation of these recommendations will

not result in increased leaseholder bills. 6.8 Finally it should be noted at the time of completing this report a

Government announcement regarding the reduction of the maximum discount from £38,000 to £16,000 will inevitably lead to a rush of applications before April 2003. In the long term, the level of RTB applications is likely to be at a much lower level.

6.9 This report is now submitted to the Executive for consideration.

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APPENDICES TO THE REPORT

Appendix A – Approved SID. Appendix B - Work Programme. Appendix C - Reports on visits and meetings. Appendix D - Makes two comparisons: the value of a typical two

bedroomed Council flat on an estate purchased in 1982, 1992, 2002 and the value of a typical three bedroomed terrace house purchased in 1982, 1992 and 2002. Both include maximum tenant discount

Appendix E - List of background papers.

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APPENDIX A Scrutiny Review Initiation Document

SCRUTINY REVIEW INITIATION DOCUMENT (SID)

Review: Home Ownership Services

Scrutiny Panel: Performance Review Committee

Portfolio holder: Councillor Jyoti Vaja

Director/Head of Service: Andy Jennings, Director of Housing

Project Leader: Eamon McGoldrick, Assistant Director of Housing

Objectives of the Review: To consider whether the services of the Council provided to Right to Buy Applicants and leaseholders are appropriate and of the right quality and to conduct a review of that provision and make recommendations to improve the service.

Scope of the Review

Consider whether Council is meeting all of its statutory obligations in respect of leaseholders/RTB applicants.

Consider if levels/quality of services are appropriate taking into account resources/value for money.

Consider whether the charges to leaseholders are fair to individual leaseholders, and represent overall a fair apportionment of costs between leaseholders and tenants.

Review information provided to tenants considering RTB by the Council and by third parties, and consider whether the risks and benefits are clearly communicated.

Review how the Council deals with cases where leaseholders have difficulty in meeting their obligations (e.g. contributions towards costs of improvement schemes).

Consider pros and cons of the use of different forms of tenure ( e.g. sale of Freehold or conversion of Leases to Commonhold/Freehold) for leaseholders and the Council.

Is the Council prepared for the predicted growth in the number of leaseholders? How is this being reflected in service planning?

Is there a focus on customers? e.g: - How are they involved in shaping services? - Do they have service guarantees? - Are our consultation/information sharing arrangements satisfactory?

Are we identifying/using best practice from other local authorities?

Do we have appropriate performance measures/targets in place?

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APPENDIX A

How is the review to be carried out. (Use separate sheets as necessary for 1-4 below) 1. Who is to be involved

Right to Buy Applicants

Leaseholders

Leaseholders Forum

Leaseholder Associations

Relevant Officers

Area Housing Panels/Committees 2. Who is to be consulted

All of the above

Other Housing Departments (via benchmarking or visits/interviews). 3. Who will give evidence Evidence could be gathered from:

- Written reports - Interviews with Professionals/Customers - Presentations - Site Visits

4. How will Area Committees be engaged? Could interview Leaseholders on Area Housing Panels/Area Committees to

get a customer perspective.

Consultation and communications plan: Apart from visits/interviews, consultation on the review could include: - residents/leaseholders newsletters

- Council Website

- Local Press. Final Report could also be published via above.

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APPENDIX A

Programme

Key output: To be submitted to Committee on:

1. Scrutiny Initiation Document 1 August

2. Timetable September 2002

3. Interim Report November 2002

4. Final Report January 2003

This SID has been approved by the Overview/Review Committee.

Signed: Date: Chair Use Co-signed copy and dated

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APPENDIX B

WORK PROGRAMME 1. HOME OWNERSHIP

___________________________________________________________ 12TH AUGUST – VISIT TO HOMEOWNERSHIP SERVICE OFFICE 4TH SEPTEMBER 2002 - MEMBERS’ PRESENTATION BY HOME OWNERSHIP OFFICE AT TOWN HALL FORMAL PERFORMANCE REVIEW COMMITTEE 17TH OCTOBER 2002 to: 1. Agree programme of meetings (formal meetings/sub-groups) 2. Visits 3. Witnesses 4. Outside Venues 5. Publicity/Engagement of Area Committees INTERVIEW LEAD MEMBERS AND LEASEHOLDER FORUM REPRESENTATIVES OCTOBER 2002 - SUB-GROUPS (VISITS/WITNESSES)

1. Right to Buy

2. New Leaseholders

3. Mature Leaseholders (10+ Years)

4. Secondary Leaseholders

5. Local Estate Agent

31ST OCTOBER – FORMAL PERFORMANCE REVIEW COMMITTEE TO INTERVIEW AREA HOUSING PANEL REPRESENTATIVES AND RECEIVE REPORTS ON VISITS/INTERVIEWS UNDERTAKEN NOVEMBER - SUB-GROUPS (VISITS/WITNESSES)

1. LBI Officers

2.

3.

4.

26TH NOVEMBER 2002 - FORMAL PERFORMANCE REVIEW COMMITTEE RECEIVE INTERIM REPORT ON HOME OWNERSHIP SERVICES/ RECEIVE ANY REPORTS ON VISITS/INTERVIEWS UNDERTAKEN.

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APPENDIX B DECEMBER 2002 SUB GROUPS (VISITS/WITNESSES)

19TH DECEMBER 2002 FORMAL PERFORMANCE REVIEW COMMITTEE TO CONSIDER FIRST DRAFT OF FINAL REPORT ON HOME OWNERSHIP SERVICES PRESENTATION FROM JOHN PHILLIPS ON MAJOR WORKS JANUARY 20TH FORMAL PERFORMANCE REVIEW COMMITTEE TO: AGREE FINAL REPORT

LB Westminster/Barnet

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APPENDIX C

SUMMARY OF THE NOTES OF VISITS AND MEETINGS OF THE PERFORMANCE REVIEW COMMITTEE 12.00pm 12th August 2002 – Visit to the Home Ownership Office at Tufnell Park This visit took place to set the scene and enable Members to have the opportunity to hear about the process of the ‘Right to Buy’ from officers. The presentation by the Home Ownership Manager outlined the process of Home Ownership from the first contact to completion. Members received a Scrutiny Information Pack containing examples of application forms and information leaflets involved. 7.00pm 4th September 2002 – Presentation by Staff of the Home Ownership at the Town Hall (Witness) The purpose of this presentation was as above, but took place at the Town Hall to give Members who were unable to attend the visit to the Home Ownership Office the opportunity to receive the presentation from the Home Ownership Manager. 3.30pm 11th October 2002 – Visit to an Estate Agent in the south of the Borough This visit was arranged to receive the views of the business interests involved in the home ownership process. A number of points were raised with examples as follows:

80% of sales are ex Local Authority properties

Professional view is that ‘Right to Buy’ process is opportunity to make large sums of money

Tendency to ‘trade-out’ of Islington for reason above

Information of % of Tenant/Owner Occupier in areas/blocks should be in public domain

Service Charges – Advise prospective purchasers to apply for ‘pre-assignment’ from Council to establish likely levels of service charges on property

7.30pm 17th October 2002 – Executive Member for Housing and Community Safety at a formal meeting of the Performance Review Committee Councillor Jyoti Vaja, Executive Member for Housing and Community Services attended the Performance Review Committee to present her views on the review of the Home Ownership Service:-

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APPENDIX C

Not all applicants proceed through the RTB process with speed

Major concern for new leaseholders is the level of service charges they face and the actual service they receive

Council stock depleting as RTB applications exercised – Council will not own these properties again

Council obliged to supply RTB applicants with information relating to expected costs for capital works planned for 5 years in the future

7.30pm 23rd October 2002 – Representatives from Islington Leaseholder’s Forum at the Town Hall (Witness) A number of Leaseholder Forum (LHF) representatives attended a sub-group of Members at the Town Hall to present their views and experiences of the Council’s operation of the Home Ownership Service :-

Experienced problems with dealing with Home Ownership Office, especially with regard to accuracy of records, correspondence etc.

Current system of calculation of service charges manifestly unfair

Council’s treatment of leaseholders very poor in general – almost feel punished for exercising RTB

Service Charge Bill and Capital Works Bill should be clearly separated and clearly identifiable

Do not receive value for money for Service Charges

LHF should have a vote on matters, for example, on implementation of major works

3.00pm 24 October 2002 – Visit to an Estate Agent in the North of the Borough This was the second opportunity to receive the views of the business sector, however this particular Estate Agent was chosen as they were an established business in Islington (over 150 years) and provided a contrast to the Estate Agent previously visited as they were situated at the opposite end of the borough:-

50% of business ex Local Authority property

Seen as a second source of valuation

Feel Council should provide a better service in supply of ‘pre-assignment’ pack as now charge £150 for it – with consumerism come extra expectations

Don’t believe RTB will come to an end in the near future

Tendency to ‘trade out’ of Borough to realise financial gains of RTB sale

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APPENDIX C 7.30pm 31st October 2002 – Area Housing Representative’s at a formal meeting of the Performance Review Committee Area Housing Panel Representatives were invited to attend the Performance Review Committee to present their views on the service insofar as their experience relates:-

Leaseholders not getting value for money for service charges paid

Leaseholder Forum not always representative – many leaseholders have no knowledge of Forum or their meetings/activities

Workmanship of contractors used by Council often very poor

Major works bills should be itemised and there should be proper consultation with residents in connection with major works

Consideration should be given to allowing residents to be given an opportunity to be present when the contract was awarded

Appeared to be no redress against contractors for poor workmanship

Residents and leaseholders should be informed of the start and finish dates for major works

6.00pm 11th November 2002 – Individual Leaseholders selected at random (Witness) Over 130 individual leaseholders were randomly selected, falling into four categories, namely those going through the Right to Buy process, those who had been leaseholders for one to two years, those who had been leaseholders for excess of ten years, and those who had purchased from leaseholders and had become ‘secondary’ leaseholders. Leaseholder’s willing to attend to give their views on their experience of being a leaseholder attended a meeting of a sub-group of Members:-

Leaseholder’s feel isolated – often not aware of who to contact when they have problems with their property

Unsure of rights and responsibilities in relation to their property

Not much knowledge of Leaseholders Forum – so feel have no collective voice

Would like to have some sort of ‘Leaseholder’s Handbook’

Lack of consultation over major works

Feel process of RTB unduly delayed by the Council

Almost a feeling of being punished for exercising RTB 6.00pm 27th November 2002 – Meeting with LBI Officers involved in RTB Process Officers involved in the process of RTB and services to Leaseholder’s were invited to meet a sub-group of Members at the Town Hall. Representatives from the Housing Department, the Home Ownership Office, Finance and Property Services and Law and Public Services explained their involvement in the Home Ownership Services function of the Council:-

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APPENDIX C

Process of fraud detection is a rigorous one, and whilst the detected fraud was relatively small numerically speaking (approx. 25 cases per annum), it still represented a significant amount of money saved for the Council

Expecting over 2000 applications for RTB, although estimate only around 650 completions this year

Valuations and Reference plans done at the same time to make process more efficient

Average of 10% of valuations carried out by LBI appealed against, and of those 10% only 3% were subject to an increase as a result

Some staffing problems have been the cause of delay in getting valuations done, but also a large number of failed appointments due to vendor’s non-attendance as well

As far as the conveyancing part of the process is concerned, often client’s solicitors delay the process

Assessment of need to supply a ‘sellers pack’ could be undertaken

Need to be aware of the ‘silent majority’ of Leaseholders who the Council does not tend to hear from

May help performance of Council if progress of RTB application could be tracked via the internet

10.00am 6th December 2002 – Visit to London Borough of Westminster This visit was arranged to view the operation and experience of the London Borough of Westminster’s Housing Ownership Service

22,000 units of housing stock

8,600 leaseholders – 60% are secondary leaseholders

Right to Buy office look on themselves as a commercial company not social housing

Highest peak of sales in the late 1980s, 170 completed in 2001-02, 120 completed 2002 to date

Think market may have reached saturation point – many tenants not able to afford to purchase

Consultation on major works is extensive and done by provider

All contracts are assessed with Walk Arounds, Steering Groups, Provider monitors and a Contract Manager

Average annual service charge is £983

Quality of service now provided has led to a reduction in complaints

No issues with initial stages of applications

Valuation is tendered out – felt this led to higher and more realistic prices

External solicitors do all conveyancing , survey revealed most were happy with that service

Extensive range of information systems available to prospective purchasers

No real Leaseholder Forums, can be part of Resident Associations

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APPENDIX C 10.00am 10th December 2002 – Visit to London Borough of Barnet This visit was arranged to view the operation and experiences of the London Borough of Barnet’s Housing Ownership Service.

14-15,000 homes

3,500 leaseholders – 50% are secondary leaseholders

170 completions in 2001-02

Normally 40-50 applications a month, this has risen to 80-90 a month

Section 205 – all residents are written to with the details of the two estimates and the works to be done – given a month to respond.

Try to carry out preliminary consultation beforehand with possible costs and works

Average Service charge is £600

Have reasonably good collection rates

Spent lot of time on clarifying service charges

No real issues with the initial stage of applications

Have database which gives them price that similar properties have sold for which saves a lot of time on enquiries about valuation from tenants

Council staff carry out valuations better quality then external valuers

Many more cases going to DV as prices of properties surprise tenants

All conveyancing ‘in house’.

Tenants who would like a faster completion are in the minority

Feel that High Street solicitors do not give sufficient advice to tenants often this is left to the Council, some tenants even after completion do not understand what a lease involves

Have a Leaseholder Forum - set up like a Residents Association, they are trying to bring new blood into the meetings.

7.30 – 19th December 2002 - Building Services – John Phillips

In past leaseholders treated as minority and main focus was on tenants.

Only recently started charging leaseholders for major works.

Leaseholders in street properties did not usually employ their own contractors to undertake works

When Section 120 notice issued details 7 year cyclical maintenance programme which showed the year in which works would be undertaken – up to leaseholders solicitor to ascertain this – if not in Section 120 notice and then Council decided to undertake works leaseholder would not be liable for payment.

Agreement reached at leaseholder forum on payment of block costs e.g. payment for lifts etc.

If lowest tenderer is above Council’s estimate of works sometimes not accepted and Council negotiate contract with contractor on PLT.

Construction boom particularly in London limits availability of good quality contractors.

24

APPENDIX C

Major works – lot of legislative requirements e.g. Health and Safety around major works which increases cost to Council/leaseholders whereas jobbing builders do not tend to comply with these requirements.

Lot of work in construction industry is sub-contracted.

Need to ensure relevant P.I.’s put in place to ensure framework contract works effectively and penalty clauses applied.

Secondary leaseholders – some leaseholders will always try to avoid paying bill but generally secondary leaseholders more experienced or have sublet.

Lot of income collected when leaseholder sells on due to charge put on property

Only first time leaseholders protected by Section 125 Notice.

Give leaseholders 12 months to pay major works bills when could enforce payment in 14 days.

Leaseholders do not object in principle to service charges but the standard and quality of work undertaken and the fact that the service charges increased each year.

7.30 – 20th January, 2003 Performance Review Committee

The Committee approved the final draft of the report, subject to any minor amendments by the Chair.

25

APPENDIX D

Valuations on Flats Sold

Under Right to Buy

1983 - 2002

20

65

135

37

157

345

0

50

100

150

200

250

300

350

400

1983 1998 2002 1983 1998 2002

Va

lue

£0

00

K

2 Bed Flat 3 Bed Street Prop.

26

APPENDIX E

LIST OF BACKGROUND PAPERS Review Committee : 27th June 1. Scoping Document Review Committee : 1st August 2. Minutes of 27th June meeting 3. Original SID Review Committee : 17th October 4. Minutes of 1st August 5. Work Programme Review Committee : 31st October 6. Minutes of 17th October 7. Note of a meeting with Bairstow Eves Countrywide 8. Note of a meeting with Drivers and Norris Review Committee : 26th November 9. Minutes of 31st October 10. Note of a meeting with Leaseholders/Tenants Review Committee : 19th December 11. Minutes of 26th November Review Committee: 20th January 2003 12. Minutes of 19th December