Leaseholders and Housing Association Ballots

Jim Fitzpatrick Excerpts

Wednesday 24th June 2015 Westminster Hall

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

I beg to move,

That this House has considered leaseholders and housing association ballots.

It is a pleasure to see you presiding over this debate, Mr Owen, and to see the Minister in his place. I and others have had an ongoing, constructive dialogue with him on these matters—on some of them, at least—as will become clear in due course. The title of the debate may be slightly misleading, as I intend to cover leasehold reform as a separate but connected matter to housing association ballots. I have advised the Minister’s office of that, and I am sure the Minister has been forewarned about the shape that my contribution will take.

I raised these matters on 6 March, in the dying days of the previous Parliament, and I welcome the opportunity to put them on the ministerial radar early in this Parliament, although I know the Minister is already aware of them—of the leaseholder issues, in particular. I and others are grateful to the Minister and his officials for arranging a meeting on 8 June about leaseholder matters with the hon. Member for Worthing West (Sir Peter Bottomley), me and representatives of the Leasehold Knowledge Partnership. The hon. Gentleman has led on these issues for some time, and I am pleased to be assisting his significant efforts. Mr Martin Boyd and Mr Sebastian O’Kelly, campaigning as the LKP, have made much progress in engaging with the Government, securing charitable status and ensuring that millions of leaseholders have a voice and access to an organisation dedicated to advising and assisting them.

I do not want to labour this point, as I know the Minister’s officials are examining many of the anomalies and weaknesses that we have identified in the existing legislation on leaseholders, but the matters that concern us include the problems with retirement homes and the issues of commonhold versus leasehold and property ownership. Tribunal procedures are supposed to be relatively informal, but can become expensive if the defending freeholder brings high-powered barristers against local residents who are trying to get redress against problems they have identified.

There is also the issue of unscrupulous freeholders and predatory property management companies. The sector is doing a lot to improve its image and the professionalism of property management services, but there are some predatory organisations that prey on vulnerable people and take a lot of money unfairly. There is the issue of forfeiture, which we have discussed in depth with the Minister. There are also recognition issues. Leaseholders often find it difficult to get their association recognised by their property management company or freeholder because of difficulties in securing numbers, identifying the owners of properties and the like.

We have also talked to the Minister about the different roles and responsibilities of the Department for Communities and Local Government and the Ministry of Justice. This policy area has implications for both Departments, so we must look at how well those arrangements are working. I know the Minister is well aware of all those issues, as they were reinforced in our previous meeting. I acknowledge that he has tasked his officials to examine them and to report back. We look forward to continuing our discussions on those issues in due course. If, however, the Minister has anything new he wishes to add, his comments would be welcomed by all who take an interest in leaseholding. I fully accept that his officials have done a lot of work on this matter, and, given that we have had a recent meeting, there is probably not a lot to report back.

The hon. Member for Worthing West, ably assisted by Ms Katherine O’Riordan, has organised another roundtable discussion on leasehold reform on 9 July, to which the Minister and his officials have been invited. They will be very welcome. Such successful forums, which have been taking place in recent years, allow people to share information and experience on these issues.

On the issue of housing association ballots, the Minister may be less informed about the concerns I raised on 6 March; the Deputy Leader of the House responded to that debate, although I am sure he reported back to the Minister. The Minister’s officials will have read Hansard and will be aware of the questions I was asking.

As the Minister knows, hundreds of thousands of tenants in recent decades voted in stock transfer ballots to leave local authority control—i.e. to move the management of their properties from the council to a housing association. Thousands—probably tens of thousands—of my constituents are among those who agreed to do that. The driver was that housing associations are able to modernise and refurbish run-down council properties and raise them above the decency threshold for homes because they can raise the finance, while the rules prevent councils and council housing organisations from doing the same. New kitchens, bathrooms, windows, central heating and security measures were installed. Many of the schemes, including a number in my constituency, were very successful, although not all were.

A number of issues arose. Some are ongoing, such as the quality of work and the materials used, the fact that some people have been overcharged for the work, and transparency. There were recently two contradictory reports on the schemes: the Evening Standard reported on bribery and corruption at a housing association in Hackney, while Inside Housing reported on a positive contract in Brighton that created hundreds of apprenticeships and new jobs. There are different experiences of schemes in different parts of the country. A number of other issues were raised, including the costs and service charges and the appeals procedures. Many tenants were able to resolve such issues with the assistance of their registered social landlord. The Government changed the regulations to level the playing field, in terms of transparency, accounting and information, but not all the concerns were addressed.

In a few cases, the offer promised by some housing associations to entice council tenants to vote for the stock transfer were never fulfilled. In such cases, tenants were powerless to have their complaints resolved. After they have voted to hand over their property to the new landlords, there was and is no mechanism to vote to sack the housing association for poor performance.

Such a sanction exists for the regulators—the Homes and Communities Agency and the housing ombudsman, following complaints of failures, can order mergers and takeovers of failing housing associations, but residents are powerless. Incidentally, leaseholders who exercised their right to buy their council property are powerless and voiceless, as they have no vote when the estates in which they live are transferred unless the local housing associations included them in the consultations, as good registered social landlords did. The Government have introduced a welcome cap on charges, which is a positive change.

My main question to the Minister is about the rights of housing association tenants and whether they should be empowered to sack poorly performing housing associations. Leaseholders in the private sector, despite the anomalies in the recognition procedure, are entitled to a ballot if their property management company lets them down, and they can vote to award their contract to a new company. If it is good enough for the private sector, why cannot it work in the public sector? It is an essential element of consumer protection that customers who are disappointed with a purchase are able to ask for redress, return the goods, seek compensation or purchase alternative products elsewhere, but those who live in housing association properties cannot. I was going to say “social housing”, but of course council tenants can switch initially by stock transfer ballot, which I mentioned. They have an initial choice, but then are locked in; having transferred, they have no further rights.

Obviously, the Minister will publish his housing Bill in this Session; I am not sure when, but he might be able to indicate the timing, even generally. Just as an aside, but an important aside for many of us, I should say that there are real concerns, which have been expressed publicly, about aspects of the Bill, such as the sale of housing association properties under the Government proposals and the economics of whether there will be like-for-like replacement. That issue has been raised by a number of people.

The second anomaly, for me and others in Tower Hamlets, is that of requiring higher-value council properties to be sold. Both those elements will have a huge negative impact on Tower Hamlets; as an inner London borough, all our property is very expensive. However, the three, four and five-bedroom properties, which are absolutely essential for the kind of community we have, are particularly expensive properties. If they go from the social housing stock, that will create major difficulties for local people.

In conclusion, and to go back to my main question about tenants getting control of their estates, may I ask the Minister whether he would be prepared to consider an amendment to his Bill to allow housing association tenants, with all the appropriate safeguards that would be required, to vote to transfer the management of their properties from one housing association to another, or to return to arm’s-length management organisation or council housing control?

This is a big issue for many thousands of my constituents. As I say, I have raised it before and it has got quite a bit of interest, because it would be a brand new right for housing association tenants. Clearly, the Government have housing associations in their sight for reforms, and I am eager to hear whether the Minister is interested in this one. I am very grateful for the opportunity to raise these matters and I look forward to the Minister’s response.

--- Later in debate ---

[Jim Fitzpatrick]

I thank the Minister for the information he has given, which I am sure we will look at very closely. I know that my local authority, Tower Hamlets Council, is closely engaged in this process. I am not sure whether local councils have a role to play, but because the affected tenants are residents in the borough the council has a moral, if not legal, obligation to engage, and I know it is looking to speak directly to certain housing associations.

I note what the Minister had to say about the Bill. We will look at tabling an amendment in due course and would be grateful if he would consider it at the appropriate time. As he said, we are having ongoing discussions, which will continue, and I look forward to future meetings in due course.

Question put and agreed to.