AN EXCERCISE IN FUTILITY

The present tribunal system for contesting service charges is inadequate, imbalanced and unfair.

The weak legislation and regulation allows Housing Associations to exploit residents. Poor accounting practice and lack of transparency are the norm. Housing Associations are not required to produce any underlying evidence of 'real costs - it is up to the leaseholder to prove charges are unreasonable'.

Despite being successful resulting in Accent Housing having to refund Lambert Court around £24,000 the FTT is not fit for purpose. It relies too heavily on residents having to offer a level of burden of proof which is often not possible.

The case outlined below is taken from challenges presented by Lambert Court disputing a 162% increase on 'accountancy' charges in front of the First Tier tribunal 'judge' Angela Davies.

 

 

TO BEGIN

Accent Housing had their own lead solicitor, an external solicitor from Trowers and Hamlins, the head of leasehold and a homeownership officer representing them.

Lambert Court, a retirement community, had a single resident without any legal background arguing their case.

 

The initial estimated charge for 'accountancy' work presented to residents for the year 2018-19 was £331.56.

By 2020 that figure had risen to £865.62. A 162% increase over two years.

To put it in context average inflation over that period was 5.8%. That initial £331 in 2020 was worth £370.

In approaching the FTt where do you begin your argument that that charge is not 'reasonable'?

 

 

Obstacle 1 Comparison websites

You will not find any way of producing comparable estimates. This goes for insurance, maintenance and other service charges.

Obstacle 2 Approach an accountancy firm

Request that a firm produce an estimate as to how much they would charge to provide a statement of factual findings.

Obstacle 3 Find estates with similar service provisions

Where to start?.

If you could indeed find an estate with a similar number of properties with the same tenure type managing agents are not allowed under data protection laws to reveal any information.

Obstacle 4 Request documents from Accent Housing

Simple then. Approach Accent and request that information which is provided to their auditors. Explain it is needed to obtain comparable quotes.

Accent Housing refuse to provide that.

(They refuse to provide the fire risk assessment.)

Obstacle 5 Rock and a hard place

Months will pass with requests being denied and emails being ignored. Weak legislation allows this. Accent Housing use it to their full advantage.

Residents are forced into a statutory process requesting under section 21 LTA 1985 a certified summary of accounts. This request will then have to be followed a month later by a request under section 22 LTA 1985 for the 'underlying' invoices for work to the estate.

Obstacle 6 Underlying invoices

It would be reasonable to assume that as per the lease as 'charges have to be in connection to work on the estate' there would be invoices to reflect the work undertaken.

How far from the truth.

The accountancy work for that year was undertaken by Grant Thornton. This is where you drop down the rabbit hole....

There are no invoices for accountancy work to Lambert Court or indeed any other estate 'managed' by Accent Housing. Under the section 22 request Lambert Court were provided with 3 'global' invoices for a combined total of £29,760 issued by Grant Thornton.

There is no reference to any estate or any rationale as to how charges were applied. An example of one of those 3 'invoices';

Beevers and Struthers have since taken over the external accountancy role. A unit price is now charged equally across the entire portfolio. It is difficult to see how this fulfils the conditions of the lease where charges have to be in connection to work on the estate.

Here lies a great problem which works in the landlords favour. If a landlord does not have to show what work is actually involved in providing a service (which is a condition of the lease) how can a resident contest those charges.?

Accent Housing produce lists of what could be included in any service provision but no definitive statement of what work is actually undertaken.

That invoice only shows that Grant Thornton invoiced Accent Housing on 29th January 2020 a sum of £15,360. For what?

The adoption of a tiered management structure is a case in point. It is being challenged in the Supreme Court as it simply ignores the lease conditions across all estates.

The mystery deepens

As if the figures themselves aren't inadequate enough.

The entire accounting charges invoiced by Accent Housing to Grant Thornton for that year were raised on behalf of a company unconnected to Lambert Court......

Coppen Estates... a back street in Sheffield

Coppen estates are the freeholders of two estates, Langley House and Vyner House in York. Both recently left Accent for the right to manage. They have no connection to Lambert Court or any other Accent managed estate that I am aware of.

Why are they named as the LANDLORD on the invoices for accountancy charges?

Epilogue

In December 2022 the resignation as auditors to Accent Housing of Grant Thornton UK LLP was announced. This was prior to the end of year accounts being submitted.

Now approach the tribunal....

Have you any confidence that you could argue a valid case that accountancy charges to Lambert Court are not 'reasonable' given the minimal information you can access combined with the chaotic and inept record keeping. Throw in a judge who believes £133 per hour for basic cleaning is a reasonable charge and seems to have no understanding as to the importance of the lease?

Angela Davies concluded that charges for accountancy work were 'reasonable'.

Accent Housing were not required to provide details of what work was undertaken in 'connection to the estate' as per the lease.

Angela Davies presided over the initial FTt judgement involving Howe Estates and Accent Housing in which she ruled that management fees being challenged were reasonable. The Upper Tribunal on appeal ruled that her decision had been incorrect as the tiered management system adopted by Accent Housing was indeed contrary to the lease conditions.

This case has now proceeded to the Supreme Court and a final judgement is awaiting.

Accent Housing did have to repay all residents court costs as they simply could not and failed to offer any defence contesting allegations of overcharging on repairs. A complete waste of the court's time.

Solicitors Regulation Authority

Red flags procurement