02 September 2005
A Scottish council is facing a claim of up to £1m from the housing association it set up to take over its houses under the government's voluntary transfer scheme.
Scottish Borders Housing Association is taking action against Scottish Borders Council over a transfer agreement that led to it acquiring the council's 6,728 properties in March 2003.
The SBHA says the action is designed to correct what it considers were 'serious inaccuracies' in the process of determining the value of the houses.
The association paid £23.34m, an average cost per house of £3,400. It claims it paid too much for the properties and is suing the council to claw back some of the money.
The transfer was approved in November 2001 after 82% of tenants voted in a secret ballot, although it was a further 16 months before it was completed.
In accordance with the arrangements for the operation of the voluntary transfer scheme, the Scottish Executive provided £38m to pay off the residual loan debt on the Borders houses.
In a statement, the SBHA said the basis of its action was 'information on the liabilities appertaining to the housing stock which have only become fully evident since the transfer'.
It added: 'SBHA is taking this action with regret, having exhausted all options open to the association to secure a mutually agreeable settlement.
'SBHA's entire income is from its tenants' rents… All monies reclaimed as a result of this process will be invested in further improving tenants' homes and services.'
A spokesman for the council confirmed it had received notice of the claim and members of the council had been informed. He added: 'The SBHA letters have been passed to our legal officers.'
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