To leaseholders the mention of major works generally fills them with fear at the potential huge costs and Section 20 can feel like a minefield of legal lingo. However, if leaseholders are fully prepared and informed in advance as well as having a fantastic managing agent guiding them through the process, it doesn’t need to get quite so scary.
Major works is exactly what it says on the tin – large scale or significant works to maintain, update or repair your building. Their scope is extensive and price tag tends to be high.
Examples of major works:
- Roof replacement or significant repair
- Complete internal or external repairs and redecoration
- Installing or refurbishing the lift
- Installing a new security system
What is Section 20?
In simple terms, where the cost of works is likely to cost any one leaseholder £250 or more in any one accounting period, there is a legal obligation to consult with leaseholders under Section 20 of the Landlord and Tenant Act 1985.
The consultation consists of notices being served on leaseholders within prescribed timeframes. The first being a notice of intention to carry out works, the second a statement of estimates and the third being notice of reasons for awarding a contract. Each notice provides a 30 day period within which leaseholders can make comments, nominate contractors and even raise objections to the works if they wish.
Budgeting for major works?
Planning ahead is essential and we would always recommend a detailed maintenance plan, ideally looking at the coming 10-year period, is prepared for blocks under our management so that an informed capital expenditure budget can be prepared and timescales managed effectively. Not only does this give property managers a clear heads-up on what needs to be done and when, it means we can also inform leaseholders well in advance.
The cost of major works is apportioned by the individual service charge proportion stipulated within your lease. Assuming the lease allows for it, collecting small amounts regularly and setting them aside in a reserve fund, means the cash is neatly stashed away for when it’s needed and we can avoid hitting leaseholders with a large and unexpected, one-off demands when the time comes.
All of this diligent saving needs to be clearly accounted for and communicated in annual service charge accounts. If you want to start planning but you’re not sure where to start, drop us a line to see how we can support you with planning and budgeting for major works.
We’re here to help
There’s no doubt about it, even when you’re fully in the know about major works, it can still feel like a legal and logistical minefield. Even best-laid plans can go wrong if something unexpected crops up and this does happen, but with all things in property management, communication is key at all times. Something that we at Wishtower pride ourselves on is regular clear dialogue with Directors, leaseholders and all those who play a part in making sure that the management of your building and any large-scale major works projects runs as smoothly as possible.
Our involvement in major works includes, but is not limited to: –
- Section 20 Consultation
- Careful budgeting and fund management
- Conducting regular site inspections alongside appointed Surveyors
- Ensuring compliance with Health and Safety legislation
- Consulting with residents and keeping them updated and in the loop
If you don’t already have a top-notch property management company looking after your block, now is the time to get Wishtower on board. It’s the best way to get the help you need to plan for the here and now, as well as the future. We are more than happy to support you through the process.