Public sector: Housing Associations
Posted on 30th May at 01:43 PM
All Housing Associations who are registered with the Housing Corporation will have to comply with “A Charter for Housing Association applicants and residents” (2003) in respect of providing information and costs to their tenants and leaseholders.
They are also required to comply with the Regulatory Code issued by the Housing Corporation in April 2002. One effect of this is that Housing Associations must be transparent in their dealing with their tenants and leaseholders, and provide full information that affects their tenants and leaseholders.
The Housing Corporation’s Rent Restructuring Policy also became a regulatory requirement for Housing Associations from April 2002. The two main elements are that inclusive rents should be separated into net rents and service charges, and that the net rent should reach a “target rent” under a formula calculation that would apply to all public sector housing by April 2012.
Secure Tenants
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 (including the cost of works to the communal TV aerial in preparing for switchover) 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. This would allow a private landlord to recover all their costs in providing Digital TV, providing that all other requirements had been met.
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 (i.e. fixed for 2-years), 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%.
Assured Tenants
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 Housing Corporation, in its Rent Influencing regime does not limit the annual rent increases to RPI plus 5% where the landlord levies variable service charges.
Assured Shorthold Tenants
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.
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