Leaseholders told they face costs of up to £95k each

Some leaseholders in an east London block of flats have been hit with "astronomical" bills of up to £95,000 per flat.

The cost is to carry out exterior building refurbishment to flats in Old Market Square, Bethnal Green.

Residents said the scaffolding went up in 2019 to fix issues with the building's concrete, but five years later it still had not come down due to an "admin error" at Tower Hamlets Council.

The council said it was "reviewing the options that are available to support leaseholders".

Sarah Barraclough, a leaseholder on the estate, said the Covid-19 pandemic had been used as an excuse for delays in starting the exterior refurbishment works despite work concluding on nearby buildings during the same period.

“My guess is the council didn’t have enough budget during that financial year to do our block as well, so they rolled it to the next financial year and each new financial year that has come round, there’s still not enough budget,” she said.

Over the past five years, Ms Barraclough estimated she had sent about 70 emails asking the council about the works, scaffolding and when it would be removed.

Ms Barraclough and other leaseholders threatened to take the council to court over the scaffolding and sought legal action after years of “being fobbed off”.

Last month, leaseholders at the flats were issued with section 20 consultation notices by the council, which estimated it would cost up to £95,000 to carry out external refurbishment works and remove the scaffolding, depending on the size of each flat.

As part of the Landlord and Tenant Act 1985, a section 20 notice is given to leaseholders if their freeholder or management company wishes to carry out any major works that will cost more than £250.

Ms Barraclough and her partner were issued a notice amounting to £95,000, which she said seemed to have been “completely fabricated”.

The couple’s section 20 notice showed the council wanted to charge them £30,591.46 to supply and fit “keep shut” signs to store doors and lift lobbies as part of “fire safety works”, however, the block they live in does not have any lifts, she said.

Ms Barraclough said: “They cannot be correct. How can you send this bill to people for £95,000 which is a life-altering amount of money, if they're not correct?

“There are other crazy things like doors; the new doors will cost £10,000 and I asked for the breakdown and [the council] said there are 16 communal doors but there are two. This is completely full of inaccuracies.”

A council spokesperson said some costs had been “incorrectly allocated”, but that the overall cost was correct.

However, the local authority is now withdrawing the section 20 notices and is getting a third party to carry out a "peer review" of the scope of the works and costs.

Ms Barraclough said leaseholders had a duty to pay for major works but questioned whether it would have been cheaper to do so five years ago.

She said the cost of the bill was “astronomical”, adding: “[The council] says you can pay it off over 10 years, which sounds nice but then you do the maths, that’s £800 per month - who’s got that much?”

The residents of Old Market Square are made up of leaseholders, private renters and social housing tenants.

Council tenants do not pay for the works to be done, however leaseholders will have to pay the costs to their freeholder - the council - ranging from £38,000 to £95,000.

The two companies who are responsible for the scaffolding at Old Market Square did not respond to requests for comment.

A council spokesperson said: “We understand the scaffolding has been up for some time and is an issue for residents. We accept this situation is far from acceptable and are doing our best to get to a resolution.

“Works need to take place to maintain the structural safety of the building. Unfortunately, there have been various challenges over a number of years that have led to delays.

"We have been consulting with residents over the past year and had hoped works would have started many months ago."

“We accept there was an issue with the supplementary information enclosed in the section 20 pack that was sent out to residents," the spokesperson added.

They said that while some costs, including for the signage, were "incorrectly listed" the overall costs were "correct".

A meeting was held with residents last week, the spokesperson added, and an independent review will be undertaken to "validate the scope of works and costings".

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