Public sector: Local Authorities
Posted on 30th May at 01:39 PM
Secure Tenants
All local authority tenancies will be secure tenancies under the Housing Act 1985. Local Authorities have tended to set an inclusive rent in the past and funded the cost of services, if provided, from within that inclusive rent.
The government has indicated that it wishes to remove the differences between the rents set by Local Authorities and Housing Associations and in February 2003 published “A Guide to Social Rent Reforms in the Local Authority Sector” Paragraph 4.1 of this document Treatment of Service Charges under Rent Restructuring includes the following:
“Therefore Ministers have encouraged Local Authorities to move towards identifying service charges separately, based on the actual cost of services to individual properties. This would allow tenants to see what they are getting for their money and to assess the reasonableness of charges.”
The Government is therefore actively encouraging Local Authorities to identify and charge for services separately and this would include the cost of switchover works. However, where a local authority levies a service charge, this will be a fixed charge since local authority tenancies are expressly excluded from ss18-30 of the Landlord and Tenant Act 1985 that includes the rules governing consultation, accounts and the right to appeal to the Leasehold Valuation Tribunal.
Local Authorities are restricted in the same way as Housing Associations operating fixed service charges under the rent restructuring rules, and therefore may not be able to recover their costs in full.
Tenants of local authorities cannot challenge a service charge at an LVT. Long leasholders may under s26 of the Landlord and Tenant Act 1983. Where a local authority tenant is excercising the Right to Buy, the details/ cost of the proposed or planned works for switchover should be included in the S25 notice.
Leaseholders
Unlike tenants, local authority leaseholders are covered by ss18-30 of the Landlord and Tenant Act 1985, and as such the Local Authority will need to consult them prior to commissioning works for the switchover to digital, if they wish to recover the costs of the works through the service charge. This could cause additional issues in mixed tenure blocks.
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