There is no government funding for the upgrade of communal TV systems. Landlords or managing agents may choose to recover the cost through service charges which will be governed by the terms of the tenancy or lease agreements.
Consultation will enable landlords to decide what services to provide and what residents are happy to contribute to. Landlords need to consider residents’ statutory rights and other legal, social and logistical factors. They should also take into consideration that high specification systems could cause financial hardship for some residents.
Services to flats might be tailored when a lease agreement does not provide a mechanism for levying a contribution. The lease may refuse to enter into a supplementary agreement to receive and pay for the additional service. In such circumstances a social landlord may be under a fiduciary duty not to incur a cost of installation as there is a little chance of recovery therefore upgrading a lessee’s flat may have to be omitted from the scheme.
The method you can use to recover the cost will depend on the type of organisation you are and the agreement that you have with your residents.
The landlord or freeholder should be able to recover the cost of digital switchover if the lease allows.
Local Authorities are restricted to operating fixed service charges under the rent restructuring rules and therefore may not be able to recover costs in full.
Tenants of Local Authorities cannot challenge a service charge at a Leasehold Valuation Tribunal (LVT). Long leaseholders’ may under s26 of the Landlord and Tenant Act 1983. Where a local Authority tenant is exercising the Right to Buy, the details or cost of the proposed or planned works for switchover should be included in the s25 notice.
The landlord or freeholder should be able to recover the cost of digital switchover if the lease allows.
Local Authority leaseholders are covered by ss18-30 of the Landlord and Tenant Act 1985. The Local Authority will need to consult with leaseholders prior to commissioning work for the digital switchover if they wish to recover the cost through the service charge. This could cause additional issues in mixed tenure blocks.
Housing Associations registered with the Homes and Communities Agency will have to comply with “A Charter for Housing Associations applicants and residents (2003)” in respect of providing information and costs to their tenants and leaseholders’. Therefore Housing Associations must be transparent in their dealings with their tenants and leaseholders’.
Tenancies that commenced before 14th January 1989 will have their Fair Rent (including net rent and service charge) set by the Rent Service, and reviewed every 2 years under the Rent Act 1977.
The landlord will supply details of current costs cost of the works to the communal TV aerial system and the Rent Service will consider how much of those costs are reasonable when setting a new Fair Rent. Where the Rent Service registers a Fair Rent with a variable service charge, then the service charge can be varied in accordance with the tenancy agreement.
The Rent Acts (Maximum Fair Rent) Order 1999 imposes a restriction on the amount a Housing Association can recover from the tenant following a revised Fair Rent being set by the Rent Service.
Where there is a fixed service charge the maximum allowable increase on re-registration of the Fair rent is the Fair rent plus RPI plus 5%. This will be the total increase including the service charge. Where there is a provision for a variable service charge, the same formula will apply to the net rent, but the variable service charge element is excluded from the effect of this Order.
Where repairs or improvements (including the replacement of any fixture or fitting, such as a communal TV aerial system) are carried out by the landlord or superior landlord to a dwelling or the communal parts and the costs included in the rental element, the Order makes provision for increases to be included as long as they do not exceed 15%.
All new lettings after 15th January 1989 will be either assured periodic tenancies or assured shorthold tenancies. Most Housing Association tenancies will be assured periodic.
If the tenancy agreement does not have a provision for increasing the rent and service charge, (such as a reference to an external index such as RPI) a landlord will have to serve a Notice in accordance with s14 of the Housing Act 1988. This will show the amount of the service charge currently being charged and the amount of the new service charge after the increase.
The assured tenant can challenge the amount of the new rent by appealing to the Rent Assessment Committee. If the service charge is fixed, the Rent Assessment Committee will consider the amount of both the net rent and the service charge. If the service charge is variable, Rent Assessment Committee, will consider only the net rent aspect. The landlord will be able to recover his full costs, provided they are reasonable.
The Tenant Service Authority, in its Rent Influencing regime does not limit the annual rent increases to RPI plus 5% where the landlord levies variable service charges.
Housing Associations granting assured shorthold tenancies will be able to recover all their service charge costs on new lettings provided that the tenancy agreement allows this.
Usually a default tenancy for the private sector. If the tenancy agreement allows the landlord will be able to charge for the cost of preparing for switchover through the service charges.
Where a freeholder has transferred ownership of individual properties to others but has retained the responsibility for maintaining a communal TV system costs are recovered through an “estate rent charge” set out in the conveyance or Transfer. If no such provision has been made, then the costs will not be able to be recovered except by agreement with the individual freeholders.
Where a freeholder has transferred ownership of individual properties to others but has retained the responsibility for maintaining a communal TV system costs are recovered through an “estate rent charge” set out in the conveyance or Transfer. If no such provision has been made, then the costs will not be able to be recovered except by agreement with the individual freeholders.
Ss18-30 of the Landlord and Tenant Act 1985 (the provisions about the recovery of service charges) do not apply to freeholders who own their own homes but have a communal TV system provided by another party. It is also restricted by whether the lease or tenancy agreement allows for a variable or a fixed service charge.
Legislation tends to give more freedom to those landlords operating a variable charge. It allows for more resident empowerment, and the right to be consulted about expenditure before it is incurred. Fixed charges tend to have more restrictions imposed by legislation, since there is no obligation on landlords to work in partnership with their residents.
The lease or tenancy agreement (and conveyance or Transfer) under which the resident occupies his property is fundamental to the ability of the landlord or freeholder or a third party to recover the costs incurred in preparing for digital switchover. If the lease agreement, conveyance or Transfer is inadequate in that regard, there is provision for such agreements to be varied. Any tenancy agreement or lease can be varied by the express agreement (in writing) of each tenant and leaseholder affected by the proposed change(s); in the case of leases, this would also include any mortgagee who has registered an interest in the property at the Land Registry; Where not all leaseholders accept the proposed changes, there is a procedure set out in the Landlord and Tenant Act 1987 (ss 35-37) whereby the Leasehold Valuation Tribunal can consider an application for changing the wording of the leases provided that certain criteria apply.
A secure tenancy agreement (housing associations and local authorities) can be varied by the landlord following the procedure set out in ss102 and 103 of the Housing Act 1985.
There should be clear statements in the tenancy or lease agreement about services (including TV aerial systems) to be provided by the landlord;
In some tenancy agreements, usually houses, landlords specifically pass the responsibility for the provision and maintenance to the tenant.
Residents who hold their property on long leases will often be contributing towards a sinking or reserve fund. Such funds can only be collected if the lease so allows and any monies collected through the sinking fund must:
Landlords or managing agents cannot therefore use a sinking fund from one estate or block to pay for the cost of switchover on another.
There are three Management Codes that Landlords and managing agents are expected to comply with. Two of these codes are in relation to service charges and both emphasise the importance of consultation when introducing new services, modifying existing ones and undertaking major works.
They are:
The costs of upgrading or replacing the infrastructure of a communal aerial system are deemed Housing Benefit eligible where levied as a service charge (Schedule 1, paragraph 1(a) (iii)).
Landlords should ensure that the money received from tenants who receive Housing Benefit, should contribute this to the upgrade of their communal aerial system and be shown separately in the service charge schedule.
The Housing Benefit regulation does not stipulate which kind of system to choose. The type of system chosen should be done through consultation with the residents. Communal aerial systems that support free-to-view channels and satellite services are eligible for benefit.
Paragraph 1(a)(iii) of schedule 2 in the Housing Benefit Regulations amended the Regulations in April 2007 to ensure that Housing Benefit service charges relating to the relay of Freeview channels via communal aerial systems continue to be eligible for Housing Benefit. See JSA Regs, Sch 2, para 16(1)(b); IS (Gen) Regs, Sch 3, para 17(1)(b); SPC Regs, Sch II, para 13(1)(b).
However there is no benefit available to assist with any rental or purchase of television equipment, nor for subscription charges or license fee payments.
The intention is that Housing Benefits contribute to a service charge or an increase in service charges and therefore covers the maintenance of the communal aerial system. Anything beyond the plug on the wall inside the home (e.g. equipment, pay TV subscriptions etc.) should be the responsibility of the individual.
It would not be appropriate for Housing Benefits to cover the costs of additional pay to view channels i.e. over and above the free-to-view channels that are accessible via digital TV through an aerial (Freeview) or satellite.
Additional subscriptions to pay for TV services should be treated in the same way as licence and rental fees. This includes all cable and broadband services.
If a local authority considers a charge to be greater than comparable service charges elsewhere, they are able make a deduction from the charge in the normal way.
There are other financing options that to be considered. These include leasing or renting the system or, in the case of local authorities, looking at the possibility of a Strategic Service-delivery Partnership (SSP).
For many residents in social housing, paying a lump sum contribution to the capital cost of a new installation may cause more hardship than paying a recapitalised cost over a 15-year span for example. To assist, some larger aerial installers are able to offer fund-install-maintain options, recovering their charges over a period of years. Landlords may wish to consider such schemes to determine whether terms are favourable.
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