Beware costly maintenance risks

  • Failure to run a good maintenance regime poses real risks to housing associations
  • As well as slips, trips and water damage, there are serious reputational perils
  • Associations need to effectively risk manage their supply chains and get the basics right

Maintaining your properties is an essential part of the relationship between social landlords and their tenants. Make mistakes, and things can go really wrong, really quickly, as Circle Housing Merton Priory (CHMP) found out recently.

The biggest social housing group in Merton, London, has faced stinging allegations from former employees this autumn [OCTOBER 2014] that sub-contractors working for supplier, Keepmoat Property Services, were routinely over-charging for work as part of a £220m contract. They claimed its “terrible repairs service” was based on a culture of bullying, poor practice and bad management.

These claims were widely reported in the local press and are currently being investigated by CHMP, who say they are taking the complaints very seriously.

Cost of reputational damage

The case starkly illustrates the complex exposure of housing associations, and their vulnerability to reputational damage, if their maintenance supply chains break down.

“If you manage the maintenance requirements of your portfolio then you will save money in the long run,” says Stuart Blackie, Property Team Leader, Risk Engineering, at Zurich Municipal. “We would urge all housing associations to make sure that they have robust and proactive maintenance regimes in place, and that their relationships with sub-contractors are carefully managed and monitored.”

These procedures aren’t just about protecting your reputation. By allowing slippage in response times to reported defects by tenants, or by changing defect criteria in order to reduce expenditure, you increase the risk of personal injury claims or damage to property – due to the alleged failure of the landlord to undertake property repairs in a timely manner.

“The high proportion of the claims experienced relate to either slips and trips or water damage, and many of these could have been prevented,” says Stuart. “Good maintenance cuts claims. It really is that simple.”

Manage your risks

Maintenance risk management also needs to take account of the financial pressures that are impacting on maintenance and repair programmes, as well as the capacity of sub-contractors to carry out work to the desired level.

The Department for Communities and Local Government has argued that housing associations can save money by inviting social housing tenants to become more involved in the repair and maintenance of their homes.

If you stay on top of your maintenance, you will save money in the long run

Stuart Blackie, Property Team Leader, Risk Engineering, at Zurich Municipal

However, allowing tenant involvement in repairs without sufficient risk management processes in place could jeopardise savings and generate longer-term costs.

“Without embedding such controls, the risk of property damage as well as tenant or third-party injuries could significantly increase,” says Stuart. “The lines of responsibility for these liabilities could also get blurred.”

In addition, if a tenant undertakes repairs then none of the checks and balances associated with work done directly by a housing association are likely to be completed.

Innovation certainly has a part to play, but it’s essential to get the tried and tested basics right first. Correctly managing your reporting framework, and making sure you have the right people doing the right work, to the correct standard, at the right time, is the best way to keep tenants and landlords happy – and safe.