Transcript PowerPoint title A presentation by 4 January 2011

Home Ownership Services
LEASEHOLD MANAGEMENT
FEE (2)
Pat Ronayne, Head of Home Ownership & Leasehold Services
REGENERATION & HOUSING
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Home Ownership Services
What is a Management Fee?
• It is the non- profit Fee that a freeholder charges
its Service Charge Payers for the cost of running
the leasehold management function
• It’s your contribution to this
• It is not the cost of the day to day services
you receive to your properties
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Home Ownership Services
Why do we charge a Fee
• It is a legal requirement that the cost of the
leasehold management function is paid for by
Service Charge Payers
For Local Authorities this must be self sufficient
and cannot be subsidised by the Housing Revenue
Account (Tenants)
• Council leases & transfers allow for a Fee to be
charged to all service charge payers
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Home Ownership Services
Background
We have always charged a Fee, so not something new
•16% in 1995 to 26% in 2005, onwards
• Currently the Fee is charged at that 26% of your annual
service charge bill, plus £30 for about half of Service
Charge Payers
Under current percentage method
•
the higher your bill; the higher your Fee,
so £1000 = £260 fee, but £200 = only £52
•
Half of you pay an extra £30; half of you don’t
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Home Ownership Services
What does the Fee cover?
The central leasehold management service including;
• calculating, producing & sending Estimates & Final
Accounts, collection, advice, & dealing with queries
• managing service charge accounts, refunds, adjustments
• cost of Home Ownership Team itself, which includes, e.g.
salaries, office equipment like desks, chairs, PC’s,
stationary, like paper, postage, pens, envelopes, etc
•Publications, e.g. Handbook, leaflets, etc
Plus
• % of cost of Area Team, e.g. Estate Management, ASB,
• Support services, e.g. Finance, IT, Human Resources
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Home Ownership Services
What does the Fee not cover?
The Fee does not cover:
• the services to your property
• these are covered by your service charges
• the cost of the Right to Buy – covered by Council
• the cost of administering major works – has own Fee
• cost of Insurance
• Tenant-only services – covered by the Council (HRA)
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How does it work?
Example Service Charge Bill
Services
Property cost
Estate Services (cleaning/Caretaking)
£156.71
Graffiti Removal
£4.18
Pest Control
£0
Window Cleaning
£1.62
CCTV
£0.00
Concierge
£0.00
Gardening
£41.28
Lifts
£0.00
Lighting
£22.23
Routine Repairs
£29.96
Total
£255.98
Variable Management Fee at 26%
£66.55
Insurance
£122.29
Heating
£0
Fixed Management Fee
£30
Total for Services
£474.82
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Home Ownership Services
What is being proposed?
1. Changing the method of calculating the Fee to make it
fairer to Service Charge Payer’s.
2. Changing Fee so that the Council recovers the full cost
of leasehold management, as we currently we under
recover
3. Changing the Fee in the April 2013 Estimates
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Home Ownership Services
Why should we change the method (1)
1. Fairness
•
Fee is currently based on level and cost of property services,
but should be based on cost of leasehold management
function
•
Currently the highest Fee is £427; the lowest is £0, but level
of leasehold management function is generally the same
•
•
e.g. same number of bills issued, similar support from
Home Ownership Team, same support services
Half of leaseholders pay an additional £30, irrespective of
where they live and the level of LM service they get
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Home Ownership Services
Why should we change the method (2)
• A non-percentage based method will be more transparent
and you will see the actual cost of the leasehold
management function reflected in your Fee
• Any efficiencies in the leasehold managent service will
automatically be passed onto Service Charge Payers
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Home Ownership Services
What are the options?
There are a number of options that we will be looking at
1. Flat fee method – Same Fee for everyone
2. Percentage method – stay as we are = high percentage
3. A combination percentage + flat for all – everyone sees an
increase + unfair percentage method is kept
4. Sliding scale method – a range of percentages based on
level of your bill
5. Your suggestions
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Home Ownership Services
Harrow
£45 - Flat Fee
Brent
£73 average - %
other
Ealing
£106 average - %
Lambeth
£114 - % + Fixed Fee
Council's
Camden
£114.58 average - %
Greenwich
£121.34 average - %
Hillingdon
£125.80 - Gross rateable value
Kensington & Chelsea
£172 average - %
Hounslow
£190 l/h; £125 street props - %
Barnet
£190 average - Flat Fee
City West Homes (Westminster)
£200 + actual
Lewisham
£200 average - Flat fee
Islington
£218 l/h, £164.23 F/H estate,
£145.33 L/h street props - %
Hammersmith
£229 (actual, with maximum) - % + FF
Havering
£229.48 actual - Flat Fee
Hackney
£235 actual - Flat Fee
Haringey
£262 l/h; £96 street props - Flat Fee
What do
do?
- Flat Fee
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Home Ownership Services
What next?
• The timetable is to change to a new method in April 2013, in
readiness for 2013/14 Estimates
• Between now and the end of this year we will consult with
leaseholders about a new method
• We will continue to write to all leaseholders, holding public
meetings, and it will be a standing item at these FORUM
meetings for the rest of the year
• We will use feedback from leaseholders about what new
method we will change to
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Home Ownership Services
Thank you
and
any questions?
Pat Ronayne
Email: [email protected] or
Post: Perceval House, 14-16 Uxbridge Road, London W5 2HL
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