LEASEHOLDER FAQS

Leaseholder discounts for works confirmed after funding boost

The previous offer of discounts for resident leaseholders will apply to the full amount of £57.9m.

For resident leaseholders (including shared owners) the contribution of the Council will have a 20 per cent reduction applied when rechargeable works are billed for.

The contribution from central government (£24.9m) will not be recharged to resident leaseholders. This equates to a 54.4 per cent discount for resident leaseholders who wereresident at the time of the tragedy, and also at the time of being required to pay the charge. In addition, the maximum potential charge for resident leaseholders will be £15,000 over any five-year period whilst the government grant is utilised, and an extensive range of repayment methods will be put in place to ensure no one is financially stretched as a result of the refurbishment.

Following a request from the Lancaster West Residents Association (LWRA), which has since been agreed at Leadership of the Council, non-resident leaseholders (e.g. Notting Hill Genesis and buy-to-let landlords) will be fully charged for the cost of works, including the government grant.

There is no limit on the level of recharge for these properties, however repayment options will be available. The table opposite summarises the full repayment options that will be available to leaseholders.

LEASEHOLDER REPAYMENT OPTIONS

Help to pay for leaseholders

If you are a resident leaseholder at the time of the tragedy, there are different options that may be available to you to help pay the remaining cost of the refurbishment.

You may be eligible to receive either a mandatory loan or a discretionary loan from the Council at differing rates of interest. Both loans can only be taken out for an amount of £500 or more and can be spread over a three to ten-year period.

Council loans

Mandatory loan: Your lease is 10 years old and you have been charged more than £2,250 for any major repair work. The loan has interest added to it at the local authority mortgage rate.

Discretionary loan: You have been charged for major repair work. You have to pay interest on the loan and the length of the loan depends on the value of the invoice. The loans are like a mortgage and a charge will be placed on your property. The land registry will be informed and in the event of you selling the property, the debt will be paid from the proceeds of the sale. There is also an option to secure a charge on your property.

Voluntary charge

If you are a resident leaseholder who is retired or disabled, we can secure a charge against your property, although we would expect you to pay the legal costs and interest associated with this. We would recover the debt when your property is sold or transferred. Please note we would always encourage you to seek independent legal advice before placing a charge on your property.

Further options are available, including applying for a bank or building society loan, equity schemes and extending your mortgage at

a better interest rate. Please note we would always encourage you to seek independent financial advice before signing any financial agreement.

For more information, please contact lancasterwestoffice@rbkc.gov.uk

Leaseholders frequently asked questions

What could the Council actually charge leaseholders for?

RBKC leases are in the main repair-only leases. For example, a repair would include the replacement of a faulty lighting system where one is already present. This includes all parts of the building and estate which are known as ‘common parts’. Improvements, i.e. installing a new feature to a block, such as a lift are not rechargeable.

Which parts of the buildings are ‘common parts’?

These are the parts that are not granted to residents in the lease but residents have right of access to and comprise the fabric of a building. These include but are not limited to, walkways, staircases and stairwells, door entrances, communal doors and windows, communal pipework and lightings.

How will leaseholders be consulted on how proposed future works are specified?

Future investment in the Lancaster West Estate will trigger a Section

20 Consultation for leaseholders. This is a two-stage consultation process. At each stage leaseholders have the opportunity to make ‘observations’ to which the Council must give due regard.

How does the Section 20 Consultation work?

A Section 20 Consultation is triggered when any lessee’s individual recharge for works to a block is in excess of £250.

First, a Notice of Intention is issued to leaseholders which sets out the nature of the proposed work. This is then followed by a Notice of Proposal which sets out the total cost of the works, the recommended contractor and your individual recharge.

When will we know what will and won’t be potentially recharged?

It will not be until any future works are specified that we will be able to properly ascertain what is to be recharged but we will ensure that you are only recharged for works that are permitted under the terms and conditions of your lease.

How will the Council calculate overall refurbishment costs and how will this be broken down as charges for leaseholders?

Any major works that are rechargeable would be calculated in the same way as your day-to-day service charges. This is apportioned using the Council’s weighted room formula:

●Flat weighted rooms divided by block weighted rooms e.g. 4/50ths of the cost of works.

●Professional and management fees would also form part of the calculation.

●Any works that are not rechargeable under the lease would be excluded from the calculations.

Who can I contact for independent advice?

There are a number of free and independent advice services available to lessees, such as The Leasehold Advisory Service: www.lease-advice.org