In addition to their current problem with their insurance costs Matilda House residents are also involved in a long running struggle to gain access to around £300,000 of their cash which is stuck in limbo.
This is quite a complex issue but something somewhere is definitely not right so LW has tried to explain it as well as we can (it being Monday and all).
Take a deep breath and we will dive in. Ready? Here we go.
Matilda House Co-op founded in 1978
Since 1989 the management of Matilda House was undertaken by a Tenants Group (or Tenant Management Organisation) that was run as a co-operative.
A blue plaque can still be seen today recording that this was the first ever local authority estate under tenants’ control in Britain when it was founded in 1978.
Our understanding is that the co-op received service charges from tenants on the estate and an appropriate amount of this was then paid to Tower Hamlets Council who in turn paid a yearly allowance back to the co-op for maintenance which came to around £100,000 a year.
Co-op fails to file paperwork in 2008
Unfortunately in 2008 the Matilda House co-op failed to file accounts with Companies House.
It was not until 2011 that a leaseholder discovered that as a result of this the Tenants Group had their status as a co-operative organisation removed by the Financial Services Authority.
So the co-op ceased to exist.
Council stops payments but continues to accept service charges
LBTH stopped making payments to the Matilda House co-op in 2009 but continued to accept service charges from Matilda House tenants for three years but neglected to mention that there was now no legal agreement between LBTH and the co-op.
Problem being that although the Tenants Group ceased to exist as a legal entity there was still a large sum of money in it’s bank account, around £300,000. And nobody has been able to touch it since then.
In 2012 the Council wrote to the co-op terminating their agreement to manage Matilda House and that it’s management would be transferred to Tower Hamlets Homes.
As a result of Cllr. Denise Jones becoming involved and Jim Fitzpatrick, MP for Poplar and Limehouse, raising a Members Enquiry in 2015 into the mismanagement of the money Tower Hamlets Homes (THH) stated that it had no legal means to recover the funds in question because the bank account was controlled by the Tenant Management Organisation / Matilda House Co-op.
And the co-op had ceased to exist.
No co-op meant nobody had access to the co-op bank account.
Despite this THH was looking at at the possibility of a senior THH finance officer becoming a joint signatory on the bank account in question.
Stuck in limbo since 2015
But since 2015 it seems nothing has happened.
The reason THH gave to Jim Fitzpatrick for the lack of progress was that “there is now no formal committee in place to make decisions”.
LW has written to THH asking exactly what “there is now no formal committee in place to make decisions” means and we will update this story when we get a reply.
We have seen correspondence between THH and Michael Bundy, secretary of the Leaseholders Association at Matilda House who has inherited this unholy mess.
Questions to be answered
Some of the many issues that Mr. Bundy raises are these:
- Why did THH wait three years before taking control of the co-op when it was clear it had ceased to function?
- Why did THH continue to accept service charge payments from leaseholders at Matilda House for three years without informing them that the relationship with the co-op had broken down?
- Is the misappropriation of the funds subject to the current Met police criminal investigation into the activities of the Lutfur Rahman administration?
All good questions. Let’s see what we can find out.
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