All names have been changed
Tower Court is a new build development located at Stamford Hill, London. There are four buildings on the estate, which was developed by Countrywide, with Hackney Council taking on the role of managing agent when it was completed.
Bella made her home in the Peregrine Court building, and was immediately introduced to the concept of service charge abuse. Bella says “I bought my flat in June 2022 and moved in the autumn. Before the purchase, Countryside (the developers) said that the price of the service charges for my one-bedroomed property was £165 per month. Not long after moving in, I got the first letter with the estimated service charges for the following year from Hackney Council. It demanded £225 per month.”
When Nizam bought his flat on Tower Court, he says “we were told that for a one-bedroomed apartment, the monthly service charge would be £162. After moving into the apartment, our first service charge bill was £210 per month”. Sarah, another resident, was quoted even less than her neighbours, at £125 per month for her one-bedroomed flat. Sarah says “well, ever since moving in, Hackney Council has been collecting charges of more than £200 every month, and it is currently £220 per month.”
This pattern is familiar to those who pay service charges in housing associations, but what the experiences of Bella, Nizam and Sarah show, is that the rot has long been afflicting council tenants too.
It is a serious matter, as Nizam explains. Those aiming to buy have to take on trust the likely service charge amounts quoted to them by developers when deciding if the property is affordable. These quotes are also “part of the affordability calculation with the mortgage advisor and the Help to Buy scheme.” says Nizam As service charges rise therefore, the property becomes less and less affordable, and people are forced to take on higher levels of debt. Ultimately, they risk losing their homes if they are unable to keep up payments despite their due diligence beforehand.
Challenges
Once their service charge bills arrived, the residents of Tower Court had no choice but to climb upon the hamster wheel that is the battle to get inaccuracies addressed. Bella says “I asked for clarification on why the amount was different from the one given to me by Countryside. After much badgering from myself and other residents, we were offered a meeting with representatives from Hackney and Countryside for the following February. She continues:
“Both Hackney and Countryside acknowledged their ‘mistake’ in sharing the incorrect figures for the service charges during the sale process. We eventually received a refund in May 2024 after a lot of chasing and gaslighting. I remain in dispute with them over the amount due to us. As well as the service charge, we disputed the reserve fund, and in March 2023, had this reduced from £958.36 to £527.54 per year.”
What these descriptions fail to fully convey is the war of attrition that Hackney Council waged against the residents on the Tower Court estate. Communication with both the council and developers has been a constant source of frustration Nizam says. “The developer and Hackney council each blamed each other at first, but then the developer admitted that it was their fault and promised a refund. This took the best part of 18 months to arrive, although we’re still unclear how they calculated the refund figure.”
View: Tower Court
The service charge abuse experienced by Tower Court residents carries the hallmarks of many other complaints to SHAC. The service charge statements included bafflingly vague descriptions, were subject to constant change, and getting invoices to back up the demands was a near impossibility. Bella says “we have a charge of £430.82 that is unexplained. We have asked for invoices and receipts to show what the sum relates to, but even though we are entitled to this information by law, Hackney refused to supply the invoices.”
Sarah adds “The Council keeps changing the amount based on ‘estimates’ which are inaccurate. It seems that the council does not have a methodology to calculate the components of the service charges, nor any evidence to support the increases.” Hackney council clearly doesn’t consider accurate billing to be a priority, nor do they show any appreciation for the impact on residents of their considerable overcharging. Neither Hackney nor Countryside have offered an apology, says Nizam and adds “they were pretty dismissive of our concerns.”
Disrepairs
Tower Court is a newly built estate, yet it is already falling into disrepair, much to the exasperation of residents. Nizam says “I’ve been at the property nearly two years, and have suffered endless problems. The cleaning of communal areas is poor, the front door is faulty and packages get stolen. The grounds around the building are not maintained, and we have had leaks and constantly broken lifts.” Yet complaints meet a wall of indifference. The vulnerability of some on the estate is a particular concern for Nizam who points out that “elderly residents and people with mobility problems living above the ground floor are often trapped inside their flats.”
And as the fabric of the estate deteriorates, criminal activity increases. “Parcels disappear and a neighbour was intimidated by someone following her home some nights ago” explains Sarah, “but residents were told that we do not need CCTV or other security measures on the estate, as Hackney Council has ‘designed away crime’”.
Hackney Council
Nizam understandably describes Hackney council’s attitude as “extremely frustrating and completely unacceptable”. Despite several meetings with Hackney staff “there is no accountability and still to this day we are left with many unresolved issues.
Appeals to Politicians and Taking Strike Action
Seeking help to resolve the multiplicity of problems, the Tower Court residents appealed to politicians. Sarah approached the Mayor of Hackney, Caroline Woodley with a meeting request in January 2024 to ask for her intervention. “They responded in April” says Sarah. “They rejected a meeting and instead sent a reply containing Hackney Council’s words.” Bella similarly approached Diane Abbot MP, but notes that despite trying to help “her interventions did not resolve the dispute.” The residents realised that they would need to organise for themselves.
From April 2024, I began withholding payment of disputed items”.
Bella
Nizam also felt that he had no choice but to refuse to pay any service charge. His strike however was initially met with legal threats, and he “decided to pay as I was nervous about what the outcome of going to court would be”. The threats however were soon followed by a shocking admission when he was “told by the solicitors that I’d actually been overcharged by £800”. It took Nizam two months of battling with Hackney council to get his overcharge refunded.
Despite these setbacks and threats, the group will not be deterred. And most importantly, they have begun the task of collectivising residents across the estate, says Sarah. “Recently, the Tower Court residents have decided to take matters into our own hands and have united into a Residents Association. We are hoping that this will give us more power to take on the Council.” The aim as Bella says is to get Hackney to “explain what they are doing to address the ongoing issues at our development”.
The Leasehold and Shared Ownership Scams
Many of those who have bought properties through the leasehold and shared ownership schemes have since described them as scams. Nizam says “if someone were to ask me whether they should buy a flat with Hackney council as the managing agent, I would tell them not to do so as the council’s incompetence has caused a lot of stress to all of the residents in these buildings.”
As the Tower Court residents have found out, financial exploitation lies at the heart of the leasehold system, with few pathways to justice for victims. And service charge abuse is often partnered with damp, mould, and with a general neglect that attracts anti-social behaviour.
Hackney Council made a big splash when consulting residents,
but didn’t listen to what they said
Sarah concludes “Leasehold is an unjust feudal system which favours the freeholder and incentivises managing agents to act in their own interests, not ours. Hackney Council has been using its power as landlord and agent to gather funds for unknown purposes the same as any private profit-making institutions. She says:
“We are promised improvements through the Leasehold Reform Bill, but after multiple amendments in Parliament, we are not confident that it will significantly help leaseholders to exercise their rights.”
Sarah
The Tower Court residents are supported by SHAC which now has a dedicated branch for council tenants and residents.
8 July 2024
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