***CTRA Statement on Major Works Bills***

Major Works Actual Bills:
In early October, many leaseholders received major works actual bills with their service charge actuals for the period April 2019 to end March 2020.

For some, these bills came in much higher than was estimated by Tower Hamlets Homes (THH) with residents expected to pay thousands of pounds in extra costs. The bills came with no itemisation nor explanation for these cost increases. Leaseholders were not pre-warned by THH to expect increased bills despite THH knowing, in some cases, a year before that costs had spiralled.

On hearing reports of this from residents, the CTRA sought an explanation for the bad handling and lack of open accounting and clear communication with leaseholders.  

In a telephone conversation with the Head of Leaseholder Services, the CTRA was promised an official written response to our concerns by the end of October 2020. Despite chasing, at the time of writing, this response has not yet been received.

Following our call for more clarity, we understand that some but not all leaseholders have been written to with a breakdown of their major works. However, the itemisations we have been shown have been very unclear with difficult to understand descriptions. It does not provide a comparison of actuals to the estimates like service charge actual bills do. Nor was the itemisation accompanied by an explanation as to how and why costs increased to so high.

Admin Charges:
It is our understanding that some leaseholders who had been issued an estimate major works bill in a previous year where works were then postponed have been charged an ‘admin fee’ against that estimate of up to 10% of the total (Note: this may be described as a ‘Better Neighbourhoods’ charge on bills).

Following CTRA’s enquires about this, Tower Hamlets Homes has admitted that, in some cases, this was a mistake. We also believe this could have happened in previous financial years. The CTRA requested, in a meeting with senior management, that an investigation take place to understand who might have been affected by this over the last three years so that refunds could be issued. At the time of writing, we have not heard if this investigation has been initiated or not.   

Major Works Estimates:
It has also come to the attention of the CTRA that many leaseholders across the Borough have been charged on estimates for major works that have then been postponed. It was the policy of THH to charge in advance of works until recently and, our investigations have uncovered around 50 blocks where this has happened in the last three years with the sum total of billings reaching over £4 million.

We are told that THH changed this policy at the beginning of 2020, but we have not seen evidence of THH actively seeking to refund residents for any money paid against estimate bills before October of this year.

During our conversation with the Head of Leaseholder Services, the CTRA secured the agreement of THH that interest would be paid on any money paid against estimates for major works that have then been postponed. Furthermore, that where residents have incurred additional costs in relation to raising monies to pay the estimate these will be reimbursed by THH if evidence is presented.

The CTRA has confirmation of these undertakings in writing from the Head of Leaseholder Services. Though a month on we are yet to see guidance on how interest will be calculated or how refunds and reimbursements will be made nor how they will be communicated by Leaseholder Services to those affected.

Summary:
We were promised an official response to these issues by THH. To confirm, we would still like to see that response. We strongly believe that it in THH’s interest to work closely with us and other TRAs to resolve this kind of resident issue.

We have in the past on more than one occasion offered to work with THH to improve their communications with residents. We also repeat that offer here.  

It is well documented that the CTRA is far from impressed with the way THH has handled major works projects in our area. This issue is just one in a long line we have seen relating to major works projects.

In Summer 2020 we wrote the Mayor John Biggs to bring to his attention the serious failings we have seen and to request a full public inquiry into THH’s managing of major works across the Borough in order that lessons can be learned and the outcome of projects improved. As yet we have had no confirmation such an inquiry will take place.

We will continue to monitor major works projects across the Columbia Estates and hold THH to a higher standard than we have seen of late. We urge all residents to do the same.

Advice for Leaseholders:

  • If you have received a major works bill:  
    • Contact leaseholder services to request a breakdown of costs
    • Compare bills with other leaseholders in your block
    • Ask for further explanations where you need them
    • Contact the CTRA if you think items of your bill are incorrect or need further clarification from THH
  • If you have paid on an estimate for major works that has not yet gone ahead:
    • You can request a refund
    • You can request interest be paid on any money THH billed you in a previous financial year for works that have not started
    • You can request payment for any costs you have incurred in order to pay your estimated major works bill where works have not started e.g. interest paid on any loan or mortgage agreement you had to take out in order to pay the bill
    • Check bills for an ‘admin charge’ against your major works bill in last three years. Seek a refund from Leaseholder Services  

CTRA will be holding a residents virtual meeting to discuss major works bills and answer any questions you have. Email info@columbiatra.org.uk if you would like to join that meeting.

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