Repair fund 'surplus' irks sheltered owners: Service charges in warden-supervised homes have angered residents

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The Independent Online
WYN MARTIN, 74, lives in a complex of 35 warden-supervised flats and bungalows managed by Guardian Housing Association. She likes her flat and is full of praise for the warden and the way the properties are maintained.

She is not so happy about the substantial increases in her monthly service charges and is angry that part of the charges are going into a 'sinking fund' that is rising in value.

The fund already stands at pounds 33,000. Interest earned on it in the year to the end of March came to about pounds 1,200 but this went straight back into the pot. Last year a little under 20 per cent of the pounds 32,000 collected from residents on Mrs Martin's south London estate went into the sinking fund.

Guardian sets this aside for repair and replacement of major parts of the properties, such as windows, roofs, drainage and plumbing systems. There is a separate 'repair' fund for day- to-day repairs and redecoration.

Mrs Martin thinks interest from the sinking fund should be used to help pay for regular repairs, so residents do not have to pay ever-higher service charges. In April, her monthly charge went up by about 5 per cent from pounds 81.68 a month to pounds 85.01. When she first moved into her flat seven years ago her monthly charge was pounds 43.

'People think that when you move into a place like this your problems are over but they're not,' she said.

'We could go on paying into the sinking fund to the end of our days and never get any benefit from it. We don't want to erode it. All we are asking for is the interest and the surplus from the repair fund.'

Guardian insists it must build up a surplus on this 'repair' fund to pay for repainting the outside of the flats and bungalows every four years. This is due to start soon and is likely to cost pounds 7,000.

The housing association has offered to have a survey carried out by its surveyors to assess the current level of the sinking fund and whether the amounts originally forecast for major repairs can be revised. But residents have rejected this as a time- wasting exercise.

Mrs Martin and her fellow residents may appear to be getting a poor deal. But according to specialist advisers on the rights of home-owners living in sheltered housing estates, Guardian is probably acting reasonably.

Service charges were at the centre of some bitter disputes between property managers and elderly residents of sheltered housing estates in the late Eighties. Eventually a group of builders, in conjunction with Age Concern, drew up a code of practice for setting and reviewing charges on these types of estates. This operates under the auspices of the National House Building Council (NHBC). Its members agree to abide by it as do many non-member property managers such as Guardian Housing Association.

As part of the same initiative builders agreed to fund the Sheltered Housing Advisory and Conciliation Service. It is staffed by Age Concern, and its advisory officer, Sue Cole, believes this ensures the service acts impartially.

Of the 15 to 20 inquiries the conciliation service receives each week, about 2 per cent are over sinking funds.

According to Mrs Cole, the NHBC code insists that estates have such a fund, to avoid the need for residents having to find large sums for unexpected repairs.

She suggested Mrs Martin and her fellow residents take up the offer of a detailed assessment but added that the charges on Mrs Martin's property did not sound high. 'The average is about pounds 18 or pounds 19 a week and they range from about pounds 10 to pounds 30,' she said.

Mrs Martin and her fellow residents are probably more acutely aware of the costs of their sinking fund than other residents of sheltered housing estates administered by Guardian. Most of these build up their sinking funds through a levy on the proceeds from the sale of flats and bungalows.

Guardian says money can be taken out of Mrs Martin's sinking fund for day-to-day repairs and decoration, but David Bogle, national manager for the association, wants to do a proper survey. Residents would not have to pay for this.

'I wanted to have this done on a scientific basis,' he said.

Sheltered Housing Advisory and Conciliation Service 071-383 2006.

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