info@gsohc.co.uk

Homeowners lobbied GHA board meeting

Homeowners lobbied GHA

A GHA board meeting at the GHA offices in Trongate was lobbied by homeowners over charges for home improvements.

The Glasgow Homeowners Campaign made the discovery of charges after the social landlord issued itemised bills for repairs. The campaigners claim they were misled over the city-wide improvement plan with added management and contingency fee charges of six and three per cent – based on average bills ranging from s7000 to s14000 across 26000 properties.

Sean Clerkin, chair of the Glasgow Homeowners Campaign said: “What the GHA has done by not telling homeowners, for three years about management fees, shows a concerted attempt to mislead them.”

Homeowners can apply for 50 % up-to100 % grant from Government or in same instances, a loan from a council run scheme with Glasgow Credit Union that is means tested so do not guarantee full funding.

The GHA claim that 95 % of homeowners have already paid for their improvements within their required 12-month period.

For the 1300 homeowners with bills outstanding the issue is not just the cost but also a matter of transparency.

Sean Clerkin added: “We have campaigned for three years for a flexible payments scheme that will enable GHA factored homeowners to get longer than one year (current arrangement) to pay thousands of pounds for over cladding and re-roofing under the GHA’s improvement programme.

“We understand GHA agreed to discuss, for approval at its board meeting on Friday January 30, the introduction of a flexible payment scheme giving these homeowners a maximum of two years (interest free) to pay these bills for the GHA home improvements. We welcome this step forward and as a gesture, we will end our non-payment campaign.

ROOF SLATES FOR RE-SALE

ROOF SLATES FOR RE-SALE - KILORAN STREET, G46. GHA FACTORED HOMEOWNERS HAVE BEEN SLATED FOR TOO LONG!

THE PRICE OUR GOOD OLD SCOTTISH SLATE, TAKEN FROM OUR ROOFS, SELL TO THE TRADE MARKET AT 35 – 50p PER SLATE, AND WE WERE FORCED TO ACCEPT THAT MARLEY TILE CR*P THAT FALLS OF IN A SLIGHT BREEZE !
GHA(m) were asked if homeowners would receive a rebate on their re-roofing bill; given the re-sale of their old roofing slates by the contractor!

GHA(m) stated that NO rebate would be given.

HUNDREDS OF furious homeowners are demanding a full refund….

From the Sunday Herald]

HUNDREDS OF furious homeowners are demanding a full refund and “unqualified” apology from Glasgow Housing Association (GHA) this weekend after it emerged the landlord had been charging them undisclosed fees for home improvements.

The Glasgow Homeowners Campaign (GHC) made the discovery after the social landlord supplied homeowners with itemised bills for repairs for the first time last month. The campaigners claim GHA wilfully misled them over the cost of its city-wide home improvement programme by “hiding” a 6% management fee and a 3% contingency fee in the homeowners’ original estimates, which only listed roofing, rendering and VAT charges. Based on average bills ranging from £7000-£14,000 across 26,000 properties, these fees amount to a total cost to homeowners of between £11 million and £21m.

Sean Clerkin, the chairman of the GHC, said: “What the GHA has done by not telling homeowners for three and a half years about management fees amounts to a lie of omission and shows very clearly that there has been a concerted attempt to mislead homeowners. This proves the need for a full and independent financial enquiry.”

The £650m scheme to upgrade the city’s public sector housing stock began in 2005, but only homeowners were able to vote in favour of renovations. As GHA votes on behalf of its renting tenants, they are not liable to pay. In many cases this has meant homeowners in a block where the majority of residents are tenants being overruled by GHA and forced to meet their share of improvements despite voting against the measures.

Although they can apply for a 50% or 100% grant from the Scottish government and, in some cases, financial assistance from a council-run scheme with Glasgow Credit Union, both are means-tested so do not guarantee funding.

According to GHA, 95% of the homeowners have already paid for their improvements in full within the required 12-month period following the receipt of a bill for the works. For the 1300 homeowners with bills outstanding, however, the point of contention now is not the cost itself but the fact they feel their agent has breached its fundamental duty of honesty and transparency – a breach they argue amounts to “fraud” and entitles them to be reimbursed for the management fee.

Mike Dailley, a solicitor at Govan Law Centre, believes they may have a case. “If they were being charged bills and they’ve effectively been charged for something they never consented to, then there is a question mark there over whether they might be in breach of their fiduciary duty. One could have a potential claim on that basis.

“This now makes urgent the case for adding GHA to the Freedom of Information schedule. The Scottish government did introduce a statutory instrument to change FoI recently, but they’ve not done that yet and I think they just need to be questioned why.

“The GHA are not acting in a way any reasonable landlord would act.”

However, Paul Brown, a solicitor at Legal Services Agency, is more sceptical. He said: “I would think the management fee would only really be attackable if it was an excessive amount for the work done.”

He added: “The basic contractual argument sounds fairly weak because even if they were misled, if they actually got the benefit of the management then they’ll have to pay on that basis. The contingency fee should be reimbursed, though, if it doesn’t end up needing to be used, so you need a detailed account of the contingency fund.”

Glasgow Liberal Democrat MSP Robert Brown believes that while the fees themselves are legal, the fact they were initially undisclosed is a cause for concern. “Whatever the rights and wrongs of whether it’s there or not, the whole thing points to the inadequacy of the arrangements for taking instructions for people who are, after all, your principals in the legal sense,” he said.

“A contingency allowance is probably quite reasonable and standard practice for these types of contracts but, again, the issue is whether it’s being used properly or just used in a way which, if you like, soaks up any oddities there may be for the sake of peace and quiet.”

The row is the latest twist in a three-year battle between the landlord and homeowners over the management of the home improvement scheme, which they contend has been poorly run and overly expensive. Last year, Communities Scotland carried out an inspection into the scheme, with mixed conclusions. While it found that the association had procured its contracts “in line with good practice and EU requirements” – contrary to homeowners’ claims that contractors were charging inflated rates – it did identify weaknesses in monitoring contractors and communicating with owners, leading to the introduction of the itemised bills demanded by homeowners.

However, its replacement body, the Scottish Housing Regulator, has rejected calls for an independent financial inquiry and campaigners’ attempts to take their case to Audit Scotland are precluded by GHA’s charitable status.

A spokesperson for GHA said the landlord is “caught between a rock and a hard place” when it comes to balancing the interests of its tenants and homeowners: “To ensure that our tenants are not used to underwrite costs for homeowners, we charge owners a modest administration fee of 6%, which is significantly lower than the 10%-12% management fee charged by most factors.”

Sandra White, SNP MSP for Glasgow, believes that an independent inquiry is the only way to draw a line under the three-year debacle.

She said: “I think we need to have an investigation basically to make the people who are accountable, be accountable. The perceived problem is that many of the people who are now within the Scottish Housing Regulator were actually appointed by the previous executive to set up and work in the GHA, so I think there could be a conflict of interest in that.

“We’ve managed to move forward and get these bills broken down, but as we’ve got further and further into GHA we’re discovering something new every day. They’re duty-bound to tell homeowners what they’re charging them for, but they’d never have known about these fees if we hadn’t fought for it, which is why we have to keep fighting.”

GHA Factoring Services

Your GHA Factor, is responsible for general management and administration of the common property.

In law, the Factor has the power to: -

• Instruct and oversee common repairs below the threshold levels set out in the Deed of Conditions for each property. Per property type, these are generally £5000 for high-rise and deck access, £2000 for tenements and £200 for four-in-a-blocks.
  
• Insure the property and collect the premiums.
  
• Manage and administer the common property.
  
• Organise repair, maintenance, service, and improvements over threshold levels, subject to majority owner support, as required under the Deed of Conditions.
  
• Instruct interim work for protection or safety pending a majority decision.
  
• Carry out major work, if so authorised.
  
• Invoice owners for their share of the costs of maintaining and servicing the common parts, including concierge, lift maintenance, stair cleaning and back court maintenance, etc and to recover outstanding balances through effective debt recovery procedures.
  
• Divide, on the sale of a flat, the costs between seller and purchaser of management, insurances, maintenance and repairs charges.
  

They provide the following specific services to factored properties: -

• Management services
  
• Comprehensive building insurance
  
• Common repairs and property inspection
  
• Landlord services (stair cleaning, backcourt maintenance, de-littering)
  
• Concierge services for multi-storey flats
  
• Lift, tank, pump, riser maintenance in multi-storey flats
  
• Stair lighting
  
• Common electricity and Heating
  
• Any other Common Services (e.g. Communal aerials)
  
• Project management of owner led major works (fee charging basis)
  

We will develop further services in line with needs identified by our customers.

GHA and Minor Repairs

For minor works under threshold limits, the Deed gives the Factor power to instruct these works and recover costs from owners without consultation.
We can also instruct works above the threshold limits, for the immediate protection of any person or the property, pending a decision being taken by owners on permanent remedial works.

In 2005, GHAM introduced an enhancement to our repair service. This gives customers early warning of works and the chance to query anything you are not happy with before your bill arrives. This service has been well received by customers.

Minor jobs will be carried out at one visit and you will be advised by a ‘job completion’ card that work has been carried out. A few days later you will receive an ‘owner occupier inspected repair costs proforma’. This will detail the work description and the total cost of the repair. Note: Your share of the total will only be shown when you get the bill.

For owners living within deck access and multi-storey flats with concierge – please check on your communal notice board. Owners living within these types of properties will be advised of minor repair work, the work content and cost, via the notice board at the concierge station. This is the most cost effective way of delivering this information.

Threshold Limits
GHA should write to owners to seek consent for a repair if the cost is over the
property threshold limits.

Threshold limits are generally :
Four-in-a-block – £200 plus VAT
Tenements – £2,000 plus VAT
Flats associated with shops – £2,000 plus VAT
Multi-storey/deck access – £2,000 & £5,000 (varies) plus VAT

If it is found that the work will exceed the threshold, the contractor will provide details of the total costs and you will receive a letter seeking majority consent to proceed.

We request a response from owners within 10 days to ensure work can be authorised promptly. However, work will only proceed if the majority of owners at the property consent to the repair. We will write to advise you of the outcome of the consultation process. If we do receive majority consent, the work will be authorised to proceed.

If authority cannot be obtained, then we will generally be unable to have the repair carried out and owners will be notified of this. Failure to have necessary work carried out can de-value your property or result in deterioration, which is likely to cost more to correct in the longer term.

Stair/Back Court Lighting

There is a legal requirement in the Civic Government (Scotland) Act 1982 to provide & maintain lighting in stairways and back courts.

Glasgow City Council provides a Stair & Back Court Lighting Service with the cost of this service charged to relevant owners through GHAM.

Included in this service are:

• Close and common stair lighting, back court lighting, low level perimeter lighting, pathway lighting (for lighting systems adopted by Glasgow City Council)
  
• Repair and replacement of light fittings
  
• Lamp replacement
  
• Repair and replacement of control equipment
  
• Repairs to wiring system
  
• Periodic (5 yearly) inspection and testing of installation
  
• Energy charges – electricity consumption
  

Excluded from this service are: -

• Replacement of entire systems that have reached the end of their serviceable life
  
• Repairs where damage is attributable to fire or deliberate misuse
  
• Repairs are carried out by City Lighting and should be reported in the normal manner to the Building Services Call Centre 0800 595 595.
  

GHA Common Repairs Service

Glasgow City Council’s Building Services is our main contractor for repairs. The contract was retendered this year and City Building (Contracts) LLP and Connaught Partnership were the two successful companies for this contract. The new contract commences 1st April 2009.

As part of the current service, owners have access to the free phone Repairs Call Centre – available 24 hours a day/7 days a week. Through this, you have emergency access to our contractors out with normal working hours.

Please remember, this is only for common repairs. If you have a repair that is individual to your flat such as a leaking cistern, central heating breakdown or something which only affects your flat, this is not covered and you will need to contact your own contractor.

Repairs can be reported to the Repairs Call Centre by owners, tenants, or by staff from GHAM or the Local Housing Organisation.

Prompt reporting of repairs will maximise the lifespan of the property and can cost less if identified at an early stage.

Repair Timescales
Listed below are response timescales under our repair contract with Building Services once work is instructed.

Repair Type      
Emergency – an issue posing immediate risk to health or likely to cause serious risk of damage or security to the property; Timescales Attend within 4 hrs & complete within 24 hrs, if possible Note: Access must be provided. If unavailable it is not deemed to be an emergency.

Repair Type  
Dampness/rot (only where this affects common parts) Timescales Target 20 working days – Max 30 working days, or as agreed   

Repair Type  Paths/fencing Timescales 30 working days, or as agreed 

Repair Type  Underground burst Timescales 2 working days

Repair Type; Timescales General fabric repair, 30 working days, or as agreed

Repair Type  Controlled entry repairs Timescales 10 working days

OFT finds significant problems in Scottish property management market

OFT finds significant problems in Scottish property management market

OFFICE OF FAIR TRADING News Release (12/09) issued by COI News Distribution Service. 12 February 2009

The OFT has today published a study into the Scottish property management market which has found that the market is not working well for consumers in Scotland.

Scottish property managers, also known as ‘factors’, manage common shared property such as roofs, staircases and gardens within tenements and other residential properties with a shared common space. Around 135,000 Scottish households rely on property management companies. The OFT’s study also looked at land maintenance companies which maintain open spaces, typically on new housing developments.

The OFT found that whilst the majority of people were happy with their property manager, around one in three said they were not. Two-thirds of consumers who had made a complaint about their management firm were dissatisfied with the way their complaint was handled.

The study says that:
* many people do not understand their complex legal rights and are unsure about the standard of service they should expect, and
* there is limited scope for redress when things go wrong, and
* owners rarely switch their property manager – and at the same time, there is little evidence of active competition between property management companies to attract business.

As a result of its findings, the OFT has today recommended:
* early implementation of a Scottish Government promoted self-regulatory scheme, with an independent complaints redress mechanism, to ensure better accountability of property managers for their standards. If this fails, a statutory scheme should be introduced, and
* the development of an advice and mediation service by the Scottish Government – available to owners and managing agents – to help overcome the legal complexities and prevent the breakdown of arrangements.

In addition, the OFT study found similar problems in the market for land maintenance companies, with consumers experiencing particularly extreme barriers to switching land maintenance suppliers when ownership of open spaces had been transferred to private companies.

Following discussion with the OFT, Consumer Focus Scotland has agreed in principle to support home owners to bring forward a test case applying legislation which may allow owners to switch land maintenance company. If this proves to be an impractical option for home owners, then the OFT recommends that the Scottish Government should review the legislation.

The OFT’s recommendations have now been submitted to the Scottish Government which has agreed to respond within 90 days.

John Fingleton, OFT Chief Executive, said:
‘This is a market that is not working well for many homeowners in Scotland. People often have little or no understanding about their rights, households rarely switch factors, suppliers do not seem to be actively competing with each other and the options for consumers when things go wrong are very limited. The OFT’s recommendations for change should be to the benefit of many Scottish consumers.’

NOTES
1. Download a copy of the OFT Market Study of Property Managers in Scotland from the OFT website – http://www.oft.gov.uk
http://www.oft.gov.uk.

2. In October 2007, Consumer Focus Scotland (formerly the Scottish Consumer Council) submitted evidence to the OFT which raised concerns about Scottish property managers. For more details about this go to the Scottish Property Managers webpage on the OFT website: http://www.oft.gov.uk/advice_and_resources/resource_base/market- studies/current/scottish.

3. As part of its market study, the OFT commissioned Ipsos MORI to carry out a survey of flat owners to see how well the property managers market in Scotland was working from the perspective of consumers. In addition, the OFT sought information from property managers across Scotland, asking them to complete an online survey. To see this survey go to the Scottish Property Managers webpage on the OFT website:
http://www.oft.gov.uk/advice_and_resources/resource_base/market- studies/current/scottish.

4. Consumers wishing to complain about residential property management services should in the first instance contact either Consumer Direct or their local Citizens Advice Bureaux for advice on how to deal with their concerns.

 

PUBLIC enquiries: 0845 7224499
enquiries@oft.gov.uk
OFT reports and consumer information leaflets are available free from:
OFT, PO Box 366, Hayes UB3 1XB 0800 389 3158 oft@ecgroup.uk.com

OFT launched a market study into Scottish property factoring

OFT launches market study into Scottish property factoring

74/08    17 June 2008

The OFT launched a market study into property management services for common and shared residential property in Scotland.

Residents in tenements and other collective residential properties in Scotland use property managers, known as factors, to manage common and shared property – for example roofs, staircases, entrances and gardens.

The study will consider issues such as how much choice and information is available to homeowners, how property managers are selected, the quality and costs of the services provided, how homeowners can effectively manage services and whether homeowners have access to redress when things go wrong.

The market study follows evidence submitted to the OFT by the Scottish Consumer Council (SCC), which highlighted potential consumer harm in this area.

The study will report back by the end of the year and will involve gathering and analysing evidence from homeowners, suppliers operating in the sector, and other key parties as well as co-operation with the Scottish Government and the SCC.

Heather Clayton, OFT Senior Director of Infrastructure, said:

‘This study will take a detailed look at Scottish property management services, consider how well they are working for homeowners, and take a view on any recommendations which might bring positive outcomes for consumers in Scotland.’

Douglas Sinclair, Chair of the Scottish Consumer Council, said:

‘The SCC has expressed concerns about the current system of Scottish property factoring and welcomes the OFT’s announcement today. We look forward to working with the OFT as it looks in more detail at this important area for Scottish consumers.’

The OFT will be contacting key parties directly and other interested parties can submit written views to:

Scottish property management market study
Office of Fair Trading
Fleetbank House
2-6 Salisbury Square
London EC4Y 8JX

Further information can be found in the market study section of this website.

NOTES

1. The work of property managers in Scotland usually includes organising repairs, maintenance and improvements and the administration of common buildings insurance. Property management services are provided by the private sector, local authorities and registered social landlords. The focus of the study is on property management services provided to the common owners of a property. Services provided to individual property owners such as residential letting services are excluded from the remit of the study, as is commercial property management.

2. In 2004, the Scottish Parliament passed the Tenements (Scotland) Act as part of a programme of property law reform to ensure that all tenements have a scheme for the management and maintenance of properties.

3. Scottish property management services are distinct from England and Wales as there is no leasehold system in Scotland and are subject to other historical and legal differences. In contrast to Scotland, most flats in England and Wales are owned on a leasehold basis, where the leasehold owner of the flat has a long term lease from the freeholder.

4. OFT market studies are carried out under section 5 of the Enterprise Act 2002 (EA02) which allows a market-wide consideration of both competition and consumer issues.

5. The Office of Fair Trading opened its office in Scotland last March to strengthen further OFT links with Scottish businesses, consumers, other enforcement agencies and policy makers. The OFT has a permanent representative in Scotland, Kyla Brand, and an office in Walker Street in the centre of Edinburgh.