Service charges, major works and long term agreements

There will be times when we will need to carry out major or cyclical works.

For example:

  • cyclical repair and redecoration
  • lift replacement
  • window replacement
  • roofing replacement

The costs of carrying out these works can run into several thousand pounds per property.

Reserve fund

For some of our leaseholders we have set up a reserve fund (sometimes called a sinking fund) that we bill as part of your annual service charge in order to help you pay for such works.    

The reserve fund means that we are able to reduce the financial impact of larger scale works on individual leaseholders.

Before we carry out large scale works or enter into a long term agreement

We will consult with residents on large scale works when:

  • the works cost more than £250 per flat
  • we enter into a long term agreement of more than one year where the costs exceed £100 per unit, per year.

The consultation, known as a ‘Section 20’ consultation under the Landlord and Tenant Act 1985, and consists of up to three stages.

Stage 1

We give a written notice to each leaseholder and the recognised residents’ association (if there is one). The notice will:

  • give a general description of the work we are planning
  • say why the work is necessary
  • inform you about whether you can nominate a contractor to provide an estimate (a nominated contractor); and
  • give you 30 days to send any comments to us in writing.

Stage 2

We give each leaseholder a written notice, which:

  • includes at least two estimates for carrying out the work
  • gives a summary of (and our response to) any comments we have received; and
  • gives you 30 days to send us your written comments on the estimates.

Stage 3

We will only give a stage 3 notice if:

  • we (the landlord) have not selected the lowest estimate
  • we have not selected a contractor proposed by a leaseholder or recognised Tenants Association.

If the contract is very large it may be subject to different rules and advertisement on the Official Journal of European Union (OJEU). This will be explained when we tender contracts.