Consultation on major works
Service Charges – statutory consultation
Under ‘Section 20’ of the Landlord and Tenant Act 1985, you are entitled to be formally consulted when we propose to carry out works above a certain value to your block or estate.
In some cases, we may also want to enter into a long-term agreement for the provision of services, repair and improvement works to the building.
A long-term agreement means:
- any agreement entered into by, or on behalf of the council for a term of more than 12 months, and where
- the costs incurred under the agreement will result in a leaseholder paying more that £100 per annum in service charges.
Examples of where we have entered into long-term agreements are cleaning, insurance and repair contracts.
Consultation on long-term agreements
When we propose to let a contract for the provision of services for a period of more than 12 months, and the apportioned cost to any individual leaseholder is more than £100 a year, we must also consult with leaseholders before proceeding.
The contract could be, for example, for maintenance of the lift, buildings insurance or cleaning - ie any contract which will produce a charge upon the leaseholder.
The council must serve a Notice of Intention on each leaseholder who will be affected by the contract (and on the secretary of the Recognised Tenants' Association, if one exists) telling them that we intend to enter into an agreement.
The notice must:
- describe the nature of the agreement in general terms, or specify a place and hours where a description of the agreement can be inspected
- explain why we consider the agreement necessary
- invite observations and state where the observations should be sent.
The time period for submitting observations is 30 days from the date of the notice and we must give due regard to the observations made.
After this we then proceed to obtain estimates, assess them and choose a preferred contractor. We must then serve a second Notice of Proposal on each leaseholder who will be affected by the contract (and on the secretary of the Recognised Tenants' Association if one exists) advising them of the proposed details of the new agreement.
The notice must contain:
- a statement of every party to the proposed agreement
- either your estimated contribution or the unit cost, hourly or daily rate, or the overall estimated cost of the agreement
- the intended length of the agreement
- a summary of any observations received in response to the Notice of Intention and the response to those observations
- a copy of the proposal or specify a place and hours where the proposal can be inspected
- an invitation to submit observations and where the observations should be sent.
Again the time period for submitting observations is 30 days from the date of the notice and we must give due regard to the observations made.
We will not be able to recover charges beyond the statutory amount (£100 per leaseholder per annum) if we fail to carry out the consultation procedure above.
Consultation on major works
When we propose to carry out works of repair, maintenance or improvement which would cost an individual service charge payer more than £250, we must, before proceeding, formally consult all those expected to contribute to the cost (under Section 20 of Landlord and Tenant Act 1985). This has the dual effect of giving notice of our intentions to the leaseholders and seeking their view on the proposed works.
We must serve a notice of intention on each leaseholder (and on the secretary of the recognised tenants' association, if there is one), which is a formal notice giving the following details:
- a description of the works (or the address and opening hours of a place at which a description of the proposed works may be inspected)
- the reasons for considering it necessary to carry out the work
- the total estimated costs of the works
- the name and address where any written observations about the works may be sent
- the date by which any observations must be received, ie 30 days from the date of the notice.
This one-stage consultation procedure will apply to major works carried out under the long-term agreement we have entered into with our partner building constructors.
At the moment the council works with a number of long-term building contractors including, Mears, Willmott Dixon, Tomlinsons, Wates and Thomas Vale.
If we fail to carry out the consultation process in the correct form or we have not sought and been given a dispensation from the LVT, we will be unable to recover the cost of the works from the leaseholders beyond the statutory limit of £250 per leaseholder.
Major work invoices - extended payment scheme for leaseholders in occupation
Birmingham City Council has an extended payment scheme to assist leaseholders that do not have the financial means to meet the cost of major works invoices.
Major works invoices are due for payment within 28 days of the date of the invoice. If it is difficult for leaseholders to pay the full cost of their major works invoice within the 28 days specified and they are unable to get a loan from their bank or building society, they may be able to apply for an extended payment scheme.
The options available are:
Leaseholders with a major works invoice of at least £500 would be allowed to spread their payment over a period of up to twelve months - interest free.
Leaseholders with a major works invoice of up to £3,500 would be allowed to spread their payment over a period of up to three years. Interest would be charged and for invoices over £2000 the loan will be secured as a legal charge against the property.
Leaseholders with a major works invoice, which is more than £3,500, would be allowed to spread their payment over a period of up to ten years. Interest would be charged and the loan will be secured as a legal charge against the property.
In those cases where leaseholders cannot afford any of the above options the council may consider putting a legal charge against the leasehold property. This would mean that the debt is charged against a leaseholder’s property and is registered with HM Land Registry. The debt becomes payable only on the sale of the property but the leaseholder would be required to pay interest on the charge on a yearly basis.
If you would like to consider one of the extended payment options above please complete the application form (attached below) and return it to the Leasehold Services Team at the address below.
All applications will be subject to a financial assessment of your ability to pay the invoice. This will be carried out by your Leasehold Services Office, and will assess the money that you have coming into your household and the money that you need to pay your existing bills.
The extended payment scheme is not applicable to leaseholders that sub-let their property, own multiple properties or do not reside at the property.
If you require any further information or would like to make a complaint regarding this process please get in touch:
Telephone Number: 0121 303 2147 / 2148
Fax Number: 0121 464 4418