Latest re Tenants Consultation

TMO Forthcoming Consultation

I have lawyered up again re the forthcoming consultation on the future of the management of our Tmo homes, most especially with respect to the choice of consultant(s) and structure of the consultation, and then the implementation of the results. I am particularly mindful of tenants in a similar situation to mine who, living in single blocks, not estates, do not have any group representation. I will publish the received advice on this blog.

Tenants Consultative Committee

This well attended event took place on 11 December 2017 at the Town Hall. Initially, it was for resident associations, but having heard about it on the grapevine, I requested an invite, as a TMO tenant living in a small block, with no representation. It was chaired by Cllr Mackover,  Cllr Nichols, Cclr Taylor-Smith, & Doug Goldring.

Purpose of meeting: find a way forward for the TMO, AS PER TENANTS & LEASEHOLDERS WISHES, with practical assistance from the council, fr a borough wide consultation.

Terms of consultation, duration, etc... to be decided by US. What form this US will take (elected or appointed or a mix of both) is also to be decided by us. The idea of a main panel with sub-panels was floated about. Training for those on the panel will be available. Since monies from our rents will be use to fund the consultation, the consultants will be answerable to US.

It was recognised that small blocks needed a different process.

The consultation may take 6 months to a full year, during which the TMO would continue to take care of repairs in a timely fashion.

Suggestion that future meeting should be broadcast online (like council meetings) was accepted.

The expression SELF-DETERMINATION was used. I objected to the expression consultative, as consulting is not binding, so a new word will have to be formulated.

There was a wide consensus for the management of RBKC council housing  to go back IN HOUSE, with a preference for small localised repair offices.

In the future, ALL TMO members should be notified. Much work remains to be done, in particular making sure that ALL TMO tenants have representation, and can participate to ALL the decisions concerning how, in the future, we want our homes managed.

If I have forgotten anything and you were present at this meeting, please do add it in the Comments section.

Below are pictures of the 2 pages invitation letter, they can be downloaded.

A potential road map for the Future?

Following talks between some residents association & K. Taylor-Smith on 27 October 2017, the following road map was formulated. It is only a draft, and is therefore open for discussion. You gotta start from somewhere!!!

Resolution 1: Agree to form the Kensington and Chelsea Residents Forum (KCRF):

Resolution 2: Agree to establish a steering committee to act on behalf of the KCRF

1.      The steering group of 8 people to be composed of six Council Tenant TMO Members, and two leaseholders; or five Council Tenant TMO Members, and three leaseholders nominated by the forum.

Objects of Forum

2.      The steering committee will represent the aims of the Forum, will negotiate with RBKC and KCTMO and other bodies as necessary to effect the aims of the KCRF

3.      To ensure the voting rights of Kensington and Chelsea Tenant Management Organisation (KCTMO) members are maintained throughout the transition from the KCTMO to the new management models of council housing are in place and there after.

4.      To ensure all residents are fully consulted during the transitional arrangements of the management of the council housing stock.

5.      To negotiate the pathways for co-designing the new management models for council housing in the Royal Borough of Kensington and Chelsea RBKC.

6.      To ensure that all those people who’s past actions and where employed by the KCTMO that led to the Grenfell Tower fire are fully held to account to the enquiry and either civil or criminal action.

7.      To seek legal advice where necessary.

8.      To seek expert housing advice where necessary.

9.      To represent the needs and aspirations of the residents.

10.  To be open to all tenants and lease holders of council housing in the Royal Borough of Kensington and Chelsea.

The MMA is no longer "commercially sensitive"

The following was forwarded to a housing activist from RBKC: 

The MMA and our standing orders are now available on the TMO website at:

http://www.kctmo.org.uk/sub/about-us/22/constitution-and-accounts

Advantages and disadvantages of residents managing their estate

This evaluation of the advantages & disadvantages inherent to residents managing their estate, by a committed housing activist,  also gratefully received.

Tenants (Both leaseholders and Council tenants are considered tenants) in an estate could use the Right to Manage regulations 2012 http://www.legislation.gov.uk/uksi/2012/1821/contents/made to set up their own TMO to manage their own estate or part of their estate (as long as that part is clearly identifiable), or a number of estates could get together to set up a TMO which would manage their estates.

1.      Advantages:

1.                  Day to day minor repairs: These will take a much shorter time and could be done with a higher quality.

2.                  Major repairs: Costs would be controlled ad most probably reduced.

3.                  Improvement to the estate: By reducing the costs of repairs, money could be allocated to improvement of the estate, whereas an in-house Council management department might only deal with repairs, but then again they might not if they are a Council with liberal views.

4.                  There is a lesser chance of corruption with a small tenant led TMO than what we have witnessed both in KCTMO and RBKC which resulted in increased costs of maintenance of the estate.

2.      Difficulties:

2.1-      It requires a committed group of tenants with a clear idea how to manage the property.

2.2-      It requires the engagement and support of both Council tenants and leaseholders.

2.3-      It is a time consuming process, and if the Council is not supportive, it could  take up to 3.8 years or more, but if the tenants get organised almost professionally and the Council cooperates, it could take one and half years. And right now, the Council seem to be supportive.

A constituted borough wide association could help reduce the above disadvantages to a great degree, by pooling resources, experience and by sharing costs amongst its members, costs that otherwise could be much higher. I will come back to this subject a bit later.

Such a TMO is not the right solution for every community. Success is more likely where there is a committed tenant group with a clear sense of what they want to do and strong links with the community they represent. I would add that both leaseholders and Council tenants need to be very engaged with their RA, as later in the day there would be separate ballots for leaseholders and Council tenants which need a simple majority in favour of forming a TMO.

So the tenant group, before even applying to the Council for Right to Manage, should establish first if there is support within their community for a TMO. To do that they would need to engage the tenants (more easily said than done), debate the issues that they have with the management of KCTMO, and at the end of this consultation process, they should conduct a secret ballot.

But before they do that, the tenant group needs to have a clear idea of how they would manage their estate as opposed to and better than KCTMO. To do that it would be essential to go over a few things. First, KCTMO results for attending to repairs and the quality of those repairs; second KCTMO health and safety records; and third, KCTMO expenditure for their estate. It would not be too difficult to cut down the quality of repairs and the timing of it compared to KCTMO. A handyman (men, depending on the size of the estate) housed in the estate could deal with 75% of day to day repairs. For more major repairs, the RA could through a process of due diligence source, interview and choose contractors such as electricians, plumbers, roofers, lift service companies, damp proof specialist, drainage specialist, heating specialists, gardeners and so on. They would need the services of a surveyor to manage these contractors. As to the Health and safety, the tenants are the people most concerned about this issue so it would stand to reason that they would take care of health and safety problems urgently. As to the expenditure, the tenants would need the help of a qualified surveyor (not necessarily but this is my suggestion), to identify where KCTMO has been overcharging and if the tenant group could bring down that expenditure substantially and allocate the savings towards improving and enhancing the quality of their estate. Armed with this clear view of the management of the estate and how their estate could be improved both from a health and safety angle and making their estate more desirable, the tenant group could deal with the process of consultation with and balloting the residents.

The tenants group need to quantify the man-hour required to go through these first steps of the right to manage process and quantify the cost of a surveyor. I would suggest that the man hours required would be as follows:

1.      Developing a clear idea of how to manage and improve their estate

1.                  Through a process of due diligence, choose contractors and a surveyor for the management of the estate and agree prices and repair quality and timing targets with them. This I would suggest would require 16 hours for developing a due diligence process (Please find attached such a process that I developed for choosing an independent tenants and leaseholders advisor, ITLA) for choice of contractors, 3 hours of research per contractor group and a surveyor so about 33 hours, arranging interviews with three companies for each contractor and interviewing them and choosing one, 43 hours.

2.                  The same surveyor that you choose to run the management of your estate could be instructed to do a report on the three previous years expenditure of your estate, and with the prices that you have agreed with contractors, identify if there could be a substantial reduction of expenses and where the subsequent savings could be invested to improve the estate. This would usually cost £3,000 (we already have a quotation for £2,500 for a review of our service charged at Warwick Road Estate, and I have added £500 for a draft business plan), and the surveyor could even prepare a draft business plan. Of course the surveyor might give you a discount or do it for free if you promise him the management of the estate. You would need to raise that fund (RBKC might pay that, as they would be willing between £20K to £30K for an ITLA). For that the tenant group would need to allocate 40 hours, that is for raising funds, studying the surveyor’s report, questioning the report, and finalising the report. This surveyor’s final report is a formulation of your clear idea on how to better manage your estate.

3.                  So altogether, to achieve a clear idea of how your estate should be managed, you need to spend 132 man hours for 100 properties (you need to add 10 man hours per 100 extra property), or 16.5 working days. If there are 3 of you, the whole process could be done in one and a half months at most, allowing for advance notices for interviews. Of course if there is a constituted borough wide association, it could produce all the due diligence guide lines for choice of contractors, it could source contractors and handymen and surveyors, raise funds, thereby reducing substantially the man hour time above.

2.      To engage and consult the tenants on the clear idea that the tenant group have formulated through the process above.

2.1-      distributing the surveyor’s final report by e-mail and physically. This would cost about £100 per 100 properties and would take 10 hours for the same number of properties.

2.2-      I suggest three consultation meetings of three hours each are required in the space of a month and a half, in which guest speakers could be invited as well a RBKC Councillors. The preparation as well as the meetings would take about 40 hours.

2.3-      I would strongly suggest a door knocking exercise to explain to the tenants the finalised surveyor’s report and to encourage them to participate in consultation. For 10O properties this would take 25 hours.

2.4-      As well as the consultation meetings, e-mail and social media should be used to encourage tenants to participate in a debate about the surveyor’s final report, This could take 40 hours.

2.5-      A secret ballot should take no more than one week and cost about £100 per 100 properties and take about 15 hours for the same number of properties (again you need to add 10 hours and £100 pounds per extra property)

2.6-      All in all the process of consultation requires 130 man hours, or 16.5 days and £200(again you need to add 20 hours and £200 pounds per extra 100 properties) , and should take about 2 months.

3-         together with the surveyor, they should develop a system for supervising and reporting by the surveyor who will manage the estate, as well as agreeing the number of meetings. Usually four meeting per year would suffice and time needs to be allocated for studying the quarterly report from the surveyor. I would say ordinarily 25 man hours per annum is required for that and another 50 man hours per annum for consultation with members should improvements be required.

Whilst some of the above steps could be taken at later stages, I strongly advise that they should be taken before a notice of the intention to form a TMO is served to the Council. For one it is very important that the tenant group has a clear and detailed idea of how to manage the estate, for two it would make engaging tenants easier, and for three it would probably make the Right to Manage process shorter. So all in all the tenant group need to spend 262 man hours in the space of three and a half months and about 75 man hour per annum for supervising the management. If they could not allocate this man hour time, there is no point in going ahead. It would help if amongst them there would be professionals such as surveyors, architects, lawyers and property managers.

Funding of the TMO to manage your estate(s) could be done in two ways, depending on the management agreement. Either RBKC could give the same funding that they were giving to KCTMO to manage your estate, lets call this option 1, or they can allow you to collect service charges and rents, the same way that KCTMO is operating now (option 2). Each option has its advantages and disadvantages. The advantage of option 1 is that the TMO would not have to serve demands for service charges and rents, chasing service charges and rents, and in case of non-compliance taking action to evict the occupier, in other words it would not need to allocate time for those administrative tasks. The disadvantage is that If there is funding required for a substantial repair/improvement project, and RBKC refuse to provide that funding, or even delays substantially the funding, matters could go pear shaped. Option 2 has the advantage of removing the latter risk, but adds the administrative burden of collecting service charges and rents and so on. Although this burden could be subcontracted to a private firm for a fee, if the TMO budget allows it.

So all in all I would suggest that three and half months of what I call overall due diligence process is required before the committed tenants group decide to go ahead with serving a notice to the Council. Then the timeline is as follows;

1.       The tenant group need to serve a notice to RBKC declaring their intention to use the Right to Manage and form a TMO. I argue that it is much better to form the TMO first, in the shape of a Limited Liability Company, with both Council tenants and leaseholders sitting on its board (there is no requirement in the right to Manage Regulations 2012 for the type of the tenant, ie leaseholders or Council tenants, sitting on the board of the TMO, but Councils have used this excuse before to withhold funding to the TMO in arbitration courts, although if the members of the bard are actually residents with a surveying, property management, legal and architectural/building background, I don’t see this as a problem). It costs less than £100 to do this. I also suggest that it is wise to spend an initial period of due diligence to establish the costs of the Right to Manage process, which could run to a substantial sum, which would have to be paid by the Council. So it is important that these costs are reasonable, to survive any examination in any arbitration tribunal. For doing that the TMO needs professional advice, which they could most probably get for free. If a number of smaller estates come together for this purpose, it will reduce the cost per estate. It will also reduce the Council’s cost as otherwise the Council would have to fork out the same sum for those different estates. A borough wide association could also be useful. Although each estate is different with subsequent different management requirements, there would be a lot of similarities in the costs of the Right to Mange process. Consequently, on those costs, the borough wide federation could employ top firm of surveyors on behalf of its members, thus reducing the cost per member. The consultant could also make sure that the TMO is properly set up, that at the time of the service of notices the requirements of the regulations are fully met when serving a Right to Manage notice. I estimate that this due diligence process could take up to one month.

2.      The Council has 28 days to accept or refuse the notice.

3.      if accepted the TMO could ask the Council for financial support for the cost of the Right to Manage process. This is where the benefit of a top surveyor who costed this process professionally becomes apparent, as the Council could dispute these costs if they are not reasonable.

4.      The Council has 28 days to determine the support, that is to agree or disagree with the costing submitted by the TMO.

5.      If the TMO find the support suggested by the Council insufficient, the TMO could within 28 days refer the matter to an arbitrator.

6.      Within 28 days of referral to the arbitrator, he must determine the support from the Council.

7.      the TMO must within 3 months of the acceptance date apply to the approved assessor service to appoint an approved assessor to report on the competence of the TMO to exercise the management functions set out in the proposal. 

8.      The approved assessor must, within 15 months of the acceptance date, complete the report and provide it to the Council and the TMO. 

Within these 15 months a number of important activities have to be completed successfully. They are:- Developing skills and knowledge The TMO committee must develop their skills and knowledge so that, in the view of an external assessor, the TMO is competent to manage the responsibilities it plans to take on.  They have to show that they have been trained in property management if they do not already have these skilss. A management agreement The TMO will confirm which services it plans to run and will negotiate the main elements of the proposed management agreement with the Council. A business plan The TMO will develop a business plan showing how it will organise and pay for the services it plans to provide. Although as I have suggested previously, I prefer this business plan to have been prepared before the notice was served.

Establishing good governance

The TMO will develop the rules, policies and procedures needed for good governance – ensuring that the TMO will be properly run.

Keeping in touch with tenants

The TMO committee will keep in touch with tenants in their area. Making sure people are informed about the TMO and listening to their views.

Apply for funding and appoint advisors

To help plan and carry out these tasks the TMO is likely to apply for some government grant funding and will almost certainly need to appoint suitable professional advisors.

9.      The Council and the TMO must use all reasonable efforts to take the action suggested by the approved assessor in accordance with paragraph (3)(b); and jointly agree an action plan to enable them to do so. 

10.  The Council must notify the approved assessor within 7 days of the action being completed. 

11.  The approved assessor must within 35 days of receipt of the Council’s notification under paragraph (6) reassess whether or not the TMO is competent and notify the Council and the TMO of his conclusion. 

12.  Where the approved assessor concludes under regulation 13 that the TMO is competent, the Council must within 3 months of receiving his conclusion, make to the tenants of each house identified in the proposal notice, an offer containing— 

(a)the offer notice; 

(b)the conclusion of the approved assessor; and 

(c)information submitted by the TMO concerning the proposal. 

13.  The Council must arrange for a ballot to be carried out within 3 months of making the offer, with a view to establishing whether the tenants referred to in paragraph (1) wish to accept the offer. 

14.  The Council must within 14 days of carrying out the ballot notify the TMO of whether a majority of the tenants who voted and a majority of the secure tenants who voted accepted or refused the offer.

15.  Subject to regulation 17, where a majority of the tenants who voted in the ballot under regulation 15(2), and a majority of the secure tenants who voted in that ballot, have accepted the offer, the Council must within 9 months of the date of the Council’s notification under regulation 15(3), enter into a TMO agreement with the TMO.

So all in all, it will take 3 years and 4 months maximum for the right to manage plus the intial 3.5 months due diligence process, or 3 years and 7.5 months, that is if the Council would not cooperate. But I anticipate if the Council cooperate, it would not take more than 1.5 years.

The advantages and the problems with RBKC taking management in house

This advice was gratefully received from a respected housing activist:

What RBKC was trying to do with the KCTMO resolution 5 and 6 was to become the only shareholder of KCTMO, in order to control it, change the managers and directors, dismiss part of the workforce, train the rest to change KCTMO into an efficient in-house Management department.

Easier said than done. The problem is that by doing so, they could assimilate the same toxic culture that KCTMO represent, within the in house RBKC management department, and let’s not forget that RBKC itself is under criminal investigation, so it could be characterised as corrupt itself. You all know what I am talking about. The simplest of repairs take 6 months, the employees have even been trained how to make use of regulations in order not to provide the repair service, they simply let the repair task remain on their computer for three weeks, after which it automatically gets deleted without the repair having been seen to. Add the kind of corruption that could make painting 6 windows and two doors cost £16,000, which happened in Warwick Road Estate. Change of culture within an organisation is extremely difficult. Many have tried it only to fail.  As some of you might know, I once presided over a change of culture in a small company of thirty employees. These were not corrupt employees, they were hard working honest people. The change of culture had the aim of making the teams within the organisation self-managed instead of managed, and handing in the decision making to the employees as opposed to the managers. The resistance was immense. It took me three years, £300K of investment in training and the introduction of new blood (many of the existing employees just left, they just refused to contribute in making decisions) to bring about that change of culture; it produced amazing results non-the-less. But the point is if it is that difficult in a small company of 30 employees, it would be much more difficult in a huge company, and it would need competent leadership, which RBKC is lacking. So to me , this way of making management in-house by RBKC would be business as usual, and even if they succeed in changing the culture, it will take years.

There is a simpler way to implement a successful RBKC in house management system. Let KCTMO go bust. In that way TUPE ( https://www.gov.uk/transfers-takeovers ) would not apply and the toxic culture could not be transferred. Then RBKC should employ and train smaller teams allocated to a few estates only, depending on size, I would say a team of 5, one surveyor, two property managers and 2 handymen, could manage 350 properties depending on the IT systems and softwares provided to them. These teams have to be completely independent of each other, meaning that they should not share any services, or the danger is that we go back to a huge KCTMO managing all the estates. Then RBKC should have a well-equipped handyman stationed in each estate, one handyman per 150 properties. Each team needs to deal with small to medium size sub-contractors such as electricans, plumbers, roofers, gardeners and so on.  The team might even consider employing electricians and plumbers. 95% of repairs, quantity wise, are done by handymen electricians and plumbers.

Then there is the issue of quality and time targets which the residents and RBKC have to agree.

In the property management teams that I trained and directed, we had the following targets;

• 1-      Upon receipt of a request for repair, depending on the subject of repair, a contractor/handyman would be sent to the property on the same day but not later than the next day. We had already negotiated with the contractors that due to the volume of jobs they were getting, that they would not charge an inspection fee.
• 2-      If the cost of repair was under a certain sum, in our case under £100, the contractor would on the first visit go ahead and see to the item of repair.
• 3-      In any case the repair should not take longer than four days (they were exception to these, for example in cases that we needed to order an item that was not manufactured anymore).
• 4-      Then there was the quality of service. If the contractor mis-diagnosed the cause of repair, they should not charge for the work they have already done. A member of our team was trained to inspect every five jobs that the contractor did to ensure quality.
• 5-      A telephone call was made to the tenant/leaseholder that had requested the repair after the work has been done to make sure they were satisfied.
• 6-      If for some reason repair would take longer than four days, temporary solution would be provided. For example in case of lack of heating, electrical radiators would be provided.

The above are just examples of quality and time targets that each estate has to agree with RBKC.

Then we come to major repairs and improvements. The freeholder is under obligation to serve notice to and consult the tenants about these major repairs, and they have to get three quotations per items of repairs and justify the chosen quotation and the choice of contractor. What happens usually is if the leaseholders are not organised and do not possess the knowledge or do not have a surveyor as their consultant, the freeholder have their way. This is where corruption could occur. They would be charging a percentage of the work as management fee, so the more the cost the higher this management fee. In these cases, the best remedy is to set up a committee including members of the RBKC management team for the estate and the RA(s) to give the opportunity to the residents to directly influence the major repairs and improvements, choice of contractor and so on.

But to do these, the estate’s RA need to be very organised. They need to have been trained in property management, to have engaged the tenants (both leaseholders and council tenants), to consult them regularly so that it could be representing the views of the residents. The RA will need to spend the same amount of time per annum as if they were managing the estate themselves, i:e 75 man hours per annum. But the question is if the RA is this organised, trained in property management and they will have to spend the same amount of time per annum, why would they not take on the management of their estate themselves?

Further more RBKC need to be willing to accept this model of management, have the competence and leadership to train and set up the independent property management teams. They could do that by employing very experienced trainers and property managers, it is actually very simple, but would they have the will to do that?