Agenda item

Authority to commence consultation on an enhanced payment options policy for leaseholders

[Report of the Director for Housing, Regeneration and Planning. To be introduced by the Cabinet Member for Housing and Estate Renewal.]

 

There is a need to introduce an enhanced payment options policy for leaseholders. Authority is being sought for consultation to be carried out with leaseholders on the policy and for delegated authority to the Director of Housing Regeneration and Planning to approve the consultation materials. Following conclusion of the consultation, a further report will be presented to Cabinet to approve the enhanced payment options policy for leaseholders.

 

 

 

Minutes:

Councillors Bull and Chandwani left the meeting for the consideration of this item.

 

The Cabinet Member for Housing and Estate Renewal introduced the report which contained recommendations to improve the leaseholders’ payment options for major works previously approved by Cabinet on 12 November 2013. Recent Section 20 notices outlining major works with a potential cost to 76 leaseholders of £60-£117k had resulted in them raising concerns around their ability to pay. It was recognised that leaseholders would require more support to pay these invoices and so it was proposed that flexible options be introduced to provide support and minimise the risk of leaseholders defaulting on their payments.

 

In response to Councillor Dennison, the Cabinet Member confirmed that all residents would receive a formal notice of consultation and follow up contact.

 

Tracie Downie, Executive Director of Housing Management, advised that Homes for Haringey had improved on contacting non-resident leaseholders and would be able to inform them of the consultation by letter.

 

RESOLVED

 

To approve consultation on the following payment terms for new major works invoices as follows: -

a.      For leaseholders living in their property (resident leaseholders): -

The payment period for invoices between £30k and up to £40k is set at 15 years, with the first 10 years being interest free and the remaining 5 years charged at the Public Works Loan Board (PWLB) rate.

b.      The payment period for invoices between £40k and £60k is set at 20 years, with the first 12 years being interest-free and the remaining 8 years charged at the PWLB rate.

c.       The payment period available for invoices above £60k is set at 25 years with the first 15 years being interest-free and the remaining 10 years charged at the PWLB rate.

 

2.      For resident leaseholders that are facing severe hardship, are unable to secure funding from a High Street Bank/Building Society, the Council will offer them an interest-only payment option. This will be secured by a charge on the property, for the actual amount of the invoice.

 

3.      For leaseholders who are not living in their leasehold property (non-resident leaseholders): -

a.      The payment period available for invoices between £30k and £60k is set at 10 years with interest charged at the PWLB rate with the Assistant Director for Housing in consultation with the Council’s Finance Service, having discretion to approve an offer for the first 5 years to be interest-free, following a recommendation from Homes for Haringey. (That is, if the non-resident landlord has no other tenanted properties and an illness/disability or caring responsibility that is preventing their occupation of their Haringey Council home).

b.      The payment period available for invoices above £60k is set at 15 years with the first 5 years being interest-free and the remaining 10 years charged at the PWLB rate.

c.       An extended interest free period to be approved by the Assistant Director for Housing in consultation with the Council’s Finance Service, following a recommendation from Homes for Haringey, if there will be a benefit to the Council’s homelessness prevention strategy.

 

4.            For all leaseholders: -

a.      The Council offers a discount of 5% for full payments made within 60 days of the invoice being issued.

b.      The Council offers an equity share scheme under section 308 of the Housing and Regeneration Act 2008.

 

5.      To note the intention to consult and the outcome from this will be considered by Cabinet in February 2021, to enable them to formally approve and adopt the payment terms for leaseholders.

 

Reasons for decision

 

It is important that that the Council offers fair and considerate terms that recognise the needs of residents and any debts incurred are recovered in an ethical, reasonable, and just manner.

 

Approving the enhanced payment options will mean that the Council’s new terms reflect some of the best options offered by other London Councils and will give leaseholders greater flexibility to choose a payment option that meets their financial circumstances. It also reduces the risk of the Council incurring debts that remain unpaid as well as the risk of lengthy and costly court proceedings to recover the debt.

 

Alternative options considered

 

A do-nothing option could mean that some leaseholders will struggle to pay the monthly payments associated with bills in excess of £30k. This is not in the Council’s interest since this could result in lengthy court action to recover the debt.

 

The alternative of not introducing this scheme would mean the Council could run the risk of not providing sufficient options for leaseholders, to enable them to agree repayment terms that are affordable and reflect the full range of financial and other circumstances which households may find themselves in.

 

 

Supporting documents: