An artist who bought a flat in a council-owned block faces homelessness after his local authority demanded he pay nearly £98,000 towards building repairs.
Jamie Harris, 47, purchased the leasehold on a one-bedroom flat owned by Lambeth Council in 2007. Eight of the 10 flats in the converted Victorian villa are rented to council tenants and, unbeknown to him, he and the one other leaseholder share liability with the council for any building work. He’s now been threatened with legal action unless he pays £97,860 and says he will have to sell his home to settle the bill.
“I was unaware the flat belonged to the council when I bought it,” he said. “I’m unable to work due to health issues and this bill has pretty much finished me.”
Leaseholders on other local authority estates, including former tenants who bought their home from the council, could face similar bill shock as councils rush to renovate poor-quality housing to meet the government’s decent home standards. Campaigners say the system makes a mockery of right to buy legislation, which helps council tenants onto the property ladder, and risks bankrupting low-income residents who buy local authority-owned properties because they are more affordable.
Since council tenants are not liable for maintenance and repair costs, the bill for entire blocks is divided between any leaseholders and the local authority freeholder. Unlike residents in privately owned buildings, local authority leaseholders have no rights to decide the scope and timing of proposed works or to request comparative quotes from contractors. Local councils often sign long-term agreements with private contractors who do not have to tender for each project, leading to accusations of bribery and overcharging.
Sebastian O’Kelly of the campaign website Leasehold Knowledge Partnership, says he is contacted every week by residents facing financial ruin, including a 62-year-old nurse billed £146,000 for the refurbishment of three blocks on his council estate. “Part of the problem is the council flats do not have reserve funds, so bills can come out of the blue all at once,” he said. “One London council has officials to deal with the right-to-buy sales and, on the other side of the desk, officials dealing with buying back former council flats from leaseholders wiped out by major works bills.”
The problem is particularly severe in London where ex-council flats can be the only affordable way for young professionals to buy a home. Residents can contest unfair charges at a first-tier tribunal but would need to pay for a professional surveyor and a legal representative to make a case and, under leasehold law, they can’t claim costs from a freeholder, even if they win.
According to critics, leaseholders are footing the bill for years of underinvestment in council housing stock. Harris’s building was in serious disrepair, despite the lease stipulating cyclical maintenance every five years. In 2015, he took out a loan after receiving a £20,000 repair estimate from Lambeth council, but the works were never undertaken.
Four years later, he was notified of the £98,000 charge for the same work, including a new roof and windows. Management and professional fees accounted for 16% of the cost. Lambeth council told the Observer that a 2012 survey had underestimated the investment required and that some projects were postponed as costs increased. It claimed the £20,000 estimate was based on a “desktop exercise” which was inadequately costed.
Both quotes were from the council’s former long-term contractor, Mears Group, which has been accused of poor workmanship and a backlog of unfinished jobs. Harris claims that the new windows have been poorly fitted and that leaks in the new roof have damaged three of the flats.
Bell Ribiero-Addy, Labour MP for Harris’s constituency of Streatham, said leaseholders should be given rights to vote on proposed projects, quotes and contractors before having to foot the bill for substandard works. “I received a number of cases and complaints around Mears’ atrociously bad work when they were contractors for Lambeth,” she said. “The bigger picture is a housing crisis exacerbated by years of plummeting investment in social homes and the mass sell-off of social housing stock, coupled with other cuts that have left local authorities [...] beholden to contractors whose first priority is too often putting shareholders before leaseholders.”
Mears, whose contract with Lambeth was not renewed this year, said it was unaware of outstanding issues with Harris’s building. A spokesperson said: “Both Mears and Lambeth Council conducted a rigorous post inspection process, with any identified remedial works required addressed prior to both handover and payment.”
Lambeth council said: “We appreciate major works can place a financial burden upon leaseholders, which is why we offer a number of repayment options.” We’d encourage any leaseholder to discuss these options with us.”
Harris claims he has not been offered any repayment options and has launched a GofundMe appeal to help raise funds. “It’s humiliating,” he said. “If I can’t find the money, I’ll have to sell the flat and I simply can’t see a way out.”
A spokesperson for the Department for Levelling Up said: “Leaseholders should not be faced with such extortionate sums for repairs and we would expect fair repayment plans to be offered in such cases.”
