GHA Hidden Charges Uncovered

November 6, 2008 by  
Filed under Features, Local News, Top Stories

Like peeling an onion, each time the LOCAL NEWS carries a story about Glasgow Housing Association, another layer of concern is revealed.

Last month we told how MSPs have written to the Scottish Housing Regulator to ask for an investigation into the finances of Glasgow Housing Association (GHA)

This month, house owners who are obliged to have GHA as their factor are discovering they have been charged a 6% management fee for overcladding, re-roofing and other external works done in the past two years and a 3% contingency fee.

‘I am appalled,’ said Alison Gallacher whose four in a block has been completed. ‘I am in dispute with GHA about the £7600 they have charged me for this work which was not necessary, but purely cosmetic.’

For two years I have been trying to get them to answer questions about the bill and provide me with warranties for the work done. I worked 50 hours a week to try to pay this off at more than £600 a month. Initially they wanted the whole amount to be paid within 14 days! But after eight months I ground to a halt and couldn’t do it any more,’ said the administrator. She has now put the issue into dispute and has held back a large portion of the bill on her Sandyhills home, until she has acceptable answers.

‘Because I’m trying to find answers to the questions myself – I’ve discovered my bill includes a management fee of 6% I knew nothing about and a 3% charge for ‘contingencies’ which I knew nothing about. Both with 17.5% VAT on top. A lot of people have been bullied into paying these enormous bills but a lot of working people – like me – are questioning the bills and asking for a breakdown of the costs.’

One letter Alison sent to GHA in December 2007 was only responded to in October 2008 and enclosed a copy of a letter GHA claimed had been sent to her in May 2008, apologising for the ‘long delay in responding.’

Said Alison: ‘I never received a letter from GHA in May. They are claiming a management fee but all they are managing to do is put people into debt.’

An East End home owner who is also upset following work on her four-in-a-block home, told the LOCAL NEWS, ‘The work has been grossly overpriced and does not represent good value for money. Charging a percentage management fee on every property is wrong. We will never see the contingency money again and my bill of £12,000 is fully 50% more than the average they quoted on literature they sent out last year.’ She added: ‘GHA are not being open with me. The lack of information is upsetting and the whole experience is very, very stressful.’

To ease the stress, Glasgow Save Our Homes Campaign meets on the first and third Thursday of each month at 7pm in the Quality Hotel (formerly the Central Hotel) Gordon Street at Glasgow Central Station.

‘We believe it is illegal not to put a management fee on an invoice,’ said Sean Clerkin who leads the Campaign. ‘Using GHA’s own figures of £14,000 as the average bill for overcladding/re-roofing, we estimate GHA is taking in £21 million on the management fee alone. We think it is tantamount to fraud that the management and contingency fees have been deliberately hidden from home owners till now.’

The Campaign invited members to start a non-payment campaign in December last year. Now they are targeting MSPs with complaints about the GHA bills.

Glasgow MSP Robert Brown, has taken up the issue. A senior civil partner in a prominent law firm before he was elected to the Scottish Parliament, he is the Liberal Democrat Spokesperson on Justice and serves on the Justice Committee and the Standards, Procedures and Public Appointments Committee.

‘When I was in legal practice, Any agent acting for a principal was obliged to put that management fee on their accounts. The idea, therefore, of a hidden management charge on GHA accounts is not satisfactory. A contingency fee is normal but there is an argument that it could be seen as an ‘add on’. He told the LOCAL NEWS that he has ‘ongoing correspondence with the Scottish Housing Regulator and GHA.’ He said: ‘I welcome GHA’s attempts to be more transparent and to provide more comprehensive and comprehensible bills. But on the current situation GHA has pretty poor customer relations.’

In response to questions from the LOCAL NEWS on the management and contingency fees on the overcladding bills, GHA issued the following statement:

‘We’re fully committed to improving transparency in all our communications including those with home owners. Last month, for the first time, we issued itemised bills to owners, which give the detail behind the costs of investment works. We charge a modest project management fee because we do not believe that tenants should underwrite costs for homeowners. Our charge of 6% is significantly lower than that of many factors – 10-12% is more common. We are improving homeowner feedback on the quality of work and we intend to provide much more information on repairs and maintenance when a new contract comes into force next year.’


* Do you have an issue with GHA, especially on bills for overcladding? If so, contact the LOCAL NEWS on : or send a brief outline of your situation to The Editor, The LOCAL NEWS, Yam Publications Ltd, 73 Robertson Street, Glasgow G2 8QD.