What are major works and why do I have to pay?
Major works are usually large ‘one-off’ projects designed to extend and improve the life of your building and could include the replacement of old windows or the replacement of a broken lift. Major works are payable under the terms of your lease. We refer to large ‘one-off’ projects as major works but technically they are also a service charge; they are just subject to a more rigorous form of consultation.
The way in which we have to consult you is set out in law, and is referred to as Section 20 consultation.
Section 20 of the landlord and tenant act 1985 tells us we must formally consult with you if we wish to re-charge you more than £250 for major works to your block and/or estate.
How we calculate your contribution
To work out your share of the repairs, we divide the gross value of your home by the gross value of your block. We then multiply this by the total cost of the major work.
We currently use the gross value (GV) of your home as a proportion of the total gross value for your block.The GV was set by a District Valuer and is similar to rateable value.
Here’s an example of how we could calculate your share of the cost of say replacing the roof to your block:
- cost of new roof £128,000
- administration costs and professional fees £19,200
- total cost of the new roof £147,200
- gross value of your home £330
- total gross value of your block £33,000
To work out your share of the repairs, we divide the value of your home by the value of your block. We multiply this by the total cost of the work.
330 ÷ 33,000 = 0.01
Then: 0.01 x 147,200 = 1472
so you pay: £1,472.00
This is only an example and the amount you pay towards a repair or improvement depends on three things:
- The cost of works – it is generally cheaper if part of a larger contract rather than a one-off job
- The size of your block - depending on the cost of works, the smaller the numbers in a block, the higher your contribution would be
- The size of your home - the larger your flat, the more you will have to pay
What documentation will I receive?
Before we begin any works to your block you will receive:
Once the contractors are on site you will receive an estimated invoice for the works. Once the works are complete you will receive and actual invoice for the works.
Notice of Intention
This notice sets out:
- the works we intend to carry out to your block
- why we need to do them
- a list of approved contractors that we will be tendering the work to.
You can write down any suggestions or questions about the proposed works on the comments form included with the notice, and use it to nominate a contractor that you would like to be included in the tendering process.
Notice of Proposal
After we have had a chance to consider your feedback, usually 30 days, we tender the works. You will receive a notice of proposal which lists the tenders we received as well as details of the two lowest tenders. It also lists the details of the works included in the tender price and the details of your estimated charge. We refer to this notice as the ‘form of tender’.
If we use the lowest tender we will let the contract immediately, if we don’t use the lowest tender we will write to you explaining why within 21 days. Once the contractors are on site we aim to issue you with an estimated invoice for the work within 12 weeks. There are lots of ways to pay your estimated bill.
Once the works are complete we will calculate the actual cost of the works and issue you with an actual invoice; the same way we would with your service charge. If the major works are carried out under a qualifying long term agreement (QLTA) we will only serve you a notice of intention. You will not receive a notice of proposal.
Section 20 consultation explained
Our booklet gives you a brief summary of the rules that we have to follow when we consult you about work or services that you have to pay for.
What is a qualifying long term agreement?
A qualifying long term agreement (QLTA) is an agreement with a contractor to provide goods or services, which runs more than 12 months and which results in leaseholders incurring an individual charge of at least £100 per year. QLTA’s could include carrying out major works such as fitting a door entry system or supplying services such as Buildings Insurance cover. We enter into QLTA’s to try and get a better deal on our major repairs costs.
When we enter into a QLTA with a contractor it means that one specific contractor will provide a certain type of works for us at a pre-agreed price for the length of the contract. For example, we could have a QLTA with a contractor to fit all our door entry system for the next 3 years.
What happens if the major works are listed on my section 125 notice?
If we carry out works within the first 5 years (approximately) of your lease, your charge is limited to the amount shown on your S125 notice, plus an inflation allowance. If we carry out works listed on your S125 after the first 5 years (approximately) of your lease, you will be recharged the full apportioned sum - even if the amount itemised on your S125 notice is less.
What happens if the major works are not listed on my section 125 notice?
If we carry out works within the first 5 years (approximately) of your lease, it is considered an un-itemised repair if it is not listed on your s125 notice and will be included in your annual block repair estimate limit, plus inflation.
That is, if you have already been charged the maximum allowed for your block repairs (estimate plus inflation) you will not be charged any extra for the major works.
There will always be a way we can help, in whatever financial circumstances.
Tel: 020 7364 5015
Leasehold Surgery every Thursday 9am – 12 noon and 1pm - 5pm (by appointment only)
Wyn Garrett Residents' Resource Centre
To book an appointment at the surgery, please call 0207 364 5015 (option 4, then option 2)