UK Residents Win Legal Battle Against Housing Association Over Service Charge Hike

Nine families living in a block of flats in Weston-super-Mare, Somerset, have won a legal battle against their housing association, Curo, after facing a service charge increase of more than 300%. The monthly fees for residents at Coombe Lodge jumped from approximately £70 to over £300.

Following the tribunal, Curo has agreed to cap the service charge at just over £100 per month. A spokesperson for Curo stated that these reductions were agreed upon before the tribunal convened, adding that the provider aims to prevent unexpected large bills for leaseholders and balance safety measures with minimizing financial impact. Residents will be reimbursed for the excess charges they have already paid.

Alan Rice from Weston Housing Action, who supported the residents, described them as "ecstatic." He noted their persistence in achieving the desired outcome despite initial skepticism.

The dispute centered on Coombe Lodge, which comprises nine flats under a shared ownership scheme. This scheme is designed to help individuals purchase a portion of their property while paying rent on the remainder. The significant service charge increase led some residents to take on extra jobs or face anxiety about affording the new fees.

Curo explained that the increased charges were primarily intended to bolster the block's sinking fund, a long-term savings account for building maintenance and costs. Rice acknowledged the need for a sinking fund but highlighted the "devastating" effect the increases had on residents, making homes that were once affordable suddenly unattainable.

In its response, Curo emphasized the ongoing maintenance costs associated with flat ownership and the purpose of sinking funds in spreading these expenses over time. The housing provider expressed a desire to continue working constructively with residents at Coombe Lodge to address remaining issues.

Currently, there is no legal limit on how much a service charge can increase. However, the recently passed Leasehold and Freehold Reform Act, which is yet to be fully implemented, is expected to introduce clearer service charge breakdowns for leaseholders and grant them the right to review service charge information from the past six years.

In a separate case, Samantha Young, a resident in a Curo-managed block in Twerton, Bath, reported her annual service charge increasing from £990 to over £6,000, which she deemed "astronomical" and unaffordable. She is pursuing action through the ombudsman. Curo indicated that it is in conversation with Ms. Young to find a resolution.