How Hyde Housing Retrospectively Increased Service Charges by 100%
Robert* was disconcerted to open a letter from landlord Hyde Housing which arrived in September. It explained that he was deeply in arrears. This came as a shock to Robert who had been struggling to maintain payments (largely successfully) despite the squeeze on his income. As a self-employed worker, Robert’s pay has dropped lately as a result of the pandemic.
Hyde said I was in arrears for last year’s service charges as they overspent. We had no word of this until that letter … we have requested receipts, but so far no one from that department has come back with a reply”.
Robert’s first action was to call Hyde, hoping there had been some error. Attempts to get to the bottom of why service charges had suddenly become so inflated have yielded nothing – except repeats of the service charge demand.
Robert talked to neighbours. All had received the same communication. Like Robert, those who didn’t receive full Housing Benefit were devastated by the sudden addition of a large debt on already overstretched budgets.
“They’re Charging £10,000 to Burn a Couple of Light Bulbs!”
One of Robert’s neighbours, Celia*, also contacted SHAC, saying “These charges are unbelievable. They are charging almost £10,000 for electricity to light the communal areas – we only have seven flats!”.
A Global Trend
These figures come as no surprise. They reflect a global trend across housing associations and council landlords to massively increase service charges.
The Royal Borough of Kensington & Chelsea recently held a meeting at which three slides were presented. They identified a series of ‘additional’ items that its council tenants could be charged for, and one whole slide was dedicated to those which would be covered by Housing Benefit.
Thus both local councils and housing associations seem to have identified an opportunity to increase income through service charges paid for by Housing Benefit (HB).
This benefit is capped (See details here), so if rent and service charges exceed a certain amount, it falls to tenants to make up the difference. Either way, it offers a lucrative income stream to the landlord. Many tenants receive no benefit, and are left to foot a hefty bill at a time that incomes are under extreme pressure.
Hyde appears to have had a lightbulb moment when it decided to charge tenants almost £10k for illuminating communal areas in a seven home apartment.
Hyde’s £161m Surplus
Some of the charges in Robert and Celia’s bills appear downright fraudulent – though whether by the supplier or landlord is not yet known. It is inconceivable for example that the true cost of lighting a small communal area has suddenly shot up to nearly £10k when it was far below this previously.
Robert and Celia are struggling financially. The same could not be said for Hyde Housing. Its financial statement for 2019/20 boasts:
“Our surplus for the year, before tax and impact of derivatives, is £115.7m (2018/19: £114.4m) … adjusting for the impact of COVID-19, impairment, net fire safety works and other non-core operating costs [the] surplus of £161.3m is 19.6% higher than last year”
The association also has a healthy operating margin of 31.8%, and the CEO Peter Denton received a bumper pay rise on the previous year. His salary is now £287k, up from £255k the year before; a 12.5% increase. In total, 47 Hyde senior staff are on salaries of £100k+. This is an organisation awash with money.
Robert and Celia continue to challenge the inflated service charges.
Contact us if you are a Hyde tenant suffering service charge hikes and want to challenge them collectively.
SHAC is currently surveying tenants and residents to build a case on the service charge scandal. Please click here to take part.
*Robert’s identity is being protected to safeguard against potential victimisation by the landlord.
*Celia’s identity is being protected to safeguard against potential victimisation by the landlord.
18 November 2020
And There’s More …
Since our original post, more examples have flooded in on Hyde’s service charges. Here are a couple of examples:
Hyde seems to have a major problem with accurately estimating costs. Instead of just over £900, the final bill demands £1,923.
This tenant’s charges seem in some cases to be trumped up. The tenant confirms “Hyde DO NOT take our rubbish away or clean the windows” yet they are being charged over £126 for these phantom services. There is also apparent double charging for ‘Communal electricity” with £2894 and later £1080.
21 November 2020
There is a total of £13,591.35 of service charges that Hyde ‘forgot’ to estimate yet now wants to charge for (the sum of those estimated at £0.00 above) This is akin to buying a pair of shoes and then getting a bill a year later for the cost of the laces and Hyde is trying to eke out a further £1,941.62 out of each tenant for what is Hyde’s mistake.
It is a long time since I looked at the law surrounding variable service charges yet how can it be lawful for Hyde to go back and charge for issues that they forgot about in the first place? Further, some of the categories that Hyde ‘forgot’ to estimate are ‘bog standard’ issues in all accommodations with communal costs such as electricity for communal areas.
This is not just a huge cock-up and mistake or forgetfulness by Hyde which impacts on tenants as some of these service charges costs can still be eligible for housing benefit and so the negligence of Hyde in not accounting for these costs in housing management and also in misinforming the tenants means there could be a significant underpayment of housing benefit to tenants.
I was a Hyde leaseholder for 10 years and I did not manage to get one receipt or evidence of the cost of services in all of the ten years.
At the time of leaving my property, I owed them around £1000 and still couldn’t get any response, so I paid the money as they wouldn’t let the sale proceed (blackmail) and had approached my mortgage provider and threatened me with forfeiture of my lease.
Yes, they seem to be above the law.
I finally moved on to a similar situation with a new HA who couldn’t have been more professional at the beginning but within 4 years are equally as bad!
Can’t believe 2nd year running Hyde have had to send out statement that their accounts department had under estimated the service charge again. Not by just a reasonable amount but an extortionate amount. Ridiculous amount for electrical maintenance & bulbs from 0.00 to £3470.02. Commmunal signs 0.00 to £513.27 to name a few adjustments.