Leasehold Major Works Policy
Aim of Policy
For the purposes of this Policy ForViva and group members are referred to as ‘The Group’. The Group members to which this policy applies are ForViva, City West Housing Trust Limited, Villages Housing Association and Villages Community Housing Association.
This document sets out the Group’s policy in relation to major repairs that may affect leaseholders. The Group is committed to providing high quality management and maintenance service to leaseholders and meeting its responsibilities to leaseholders under the terms of the lease.
For the purpose of this document, Major and investment works include, but are not limited to:
- Planned maintenance – e.g. lift servicing
- Cyclical Maintenance – e.g. internal and external decoration
- Component Renewal – e.g. gutters, downpipes, communal lighting
- Improvements – e.g. communal aerials, door entry systems
- Energy Efficiency – e.g. cavity wall, loft insulation
As the owner of buildings where leaseholders own individual properties, the Group is responsible for maintenance of the communal and structural parts of the building and communal parts of neighbourhoods such as un-adopted roads, communal gardens and parking areas. Under the terms of the lease, leaseholders are required to pay an appropriate proportion of the cost of these works. The cost of the works will include professional fees such as consultants, surveyors, engineers or architects and an administration fee.
The Group will, in accordance with its legal obligations, fully consult with all leaseholders about proposed major works to their property and/or their block where the proposed cost to the leaseholder is above the prescribed amount.
The Group will aim to recover all the monies due from leaseholders towards the cost of major works and investment works.
The Group is committed to consulting with leaseholders when entering into new contracts in relation to refurbishment works carried out at their property and/or their block.
Leaseholders will be consulted in accordance with The Service Charges (Consultation Requirements) (England) Regulations 2003 and under Section 20 of the Landlord and Tenant Act 1985 as amended. The requirement under the legislation to consult only applies to if there is a one off cost to the leaseholder of more than £250 or where there is a long term agreement (12 months or more) and the cost to the leaseholder is more than £100 per year.
For some contracts the Group will advertise in an official European Journal so that contractors are made aware of it. This process is only relevant for contracts over a certain price, which differs depending on the type of work the contract is for.
For contracts that need to be advertised in this way the Group will provide leaseholders with a notice of intention of the work proposed and estimated costs for that work before entering into a contract with a contractor who will then carry out the works. As the Group has to make sure that any charges demanded under the terms of the lease are reasonable and proportionate, the Group will seek to ensure that the work proposed is reasonable.
For contracts that don’t need to be advertised this way the Group will invite leaseholders to nominate a contractor and comment formally on the proposed works in accordance with the Section 20 Landlord and Tenant Act 1985. Leaseholders will be provided with full details of the proposed works, including estimates for the total cost of the works and estimates for the individual leaseholder’s contribution before the works commence. Leaseholders will be required under the terms of their lease to make an apportioned contribution towards the overall costs of the proposed works to their building as incurred by the Group. Leaseholders will not be able to opt out of works (such as window replacements), unless the Group is satisfied that such works have already been carried out to a satisfactory standard.
The Group will seek to ensure that the work is completed within the timescales set out in any consultation that is sent to leaseholders. The Group will inform the leaseholder of any delay to work and the cause of the delay and provide an update on completion timescales.
Invoices will be issued within 18 months of the works being invoiced to the Group by the contractor. Where this is not possible, a notice will be given under Section 20(B) of the Landlord and Tenant Act 1985.
In accordance with the terms of the lease, the leaseholder needs to pay for the works when they are demanded from them by way of an invoice. Payment will be required within 28 calendar days of the invoice date. Leaseholders can contact the Group if payment cannot be made in 28 calendar days, and payment options will be made available.
The Group will use discretion to leaseholders in genuine financial difficulties. If leaseholders are unable to pay the cost of the major works in full within the 28 calendar days, the Group will explore alternative payment options available to the leaseholder. The Group will assess each case individually and, depending on the circumstances, may consider a repayment agreement, extending the repayment period, or agreeing with the leaseholder to register a Voluntary Financial Charge on the property at the Land Registry (by Board approval). This will ensure that the debt is repaid when the property is either sold or passed to the owners successor under a will should the leaseholder pass away.
If there has been an overpayment of major works charges and all other accounts for the property are in credit, the overpayment will be refunded to the leaseholder within 28 calendar days.
If a debt is identified then the credit will be used to clear all or part of the outstanding debt.
Non Payment and Broken Agreement
Any leaseholder who falls behind with payments will be contacted promptly by the Group and appropriate action for arrears recovery will be taken.
As in all debt recovery matters several options are available. The Group will review the available options. These options may include writing to the mortgage lender where it has still not been possible to reach an agreement acceptable to both the leaseholder and the Group. Where the Group is satisfied that appropriate courses of recovery action have been taken and major charges remain unpaid, legal proceedings will be considered. Legal proceedings may include obtaining money judgement orders, (known as County Court Judgements) or, following persistent failure to pay major work charges, action for forfeiture taking account of the requirements of the Housing Act 1996 and Commonhold and Leasehold Reform Act 2002.
In the event that a leaseholder disputes a major works charge, the Group will review the leaseholder’s case, so as to reduce the need for any legal action either by the Group or the leaseholder. This does not affect a leaseholder’s statutory right to make an application to a First Tier Tribunal (Property Chamber) who will consider if it reasonable for the leaseholder to pay the charge.
How the Policy will be Delivered
The delivery of this policy and associated procedures will be the responsibility of the Community Safety Manager.
If staff become aware that there are problems with effective operation of the policy or the associated procedures, they should report this to the policy owner. This feedback will be incorporated into the policy / procedural review process.
ForViva will monitor and report performance in compliance with this policy in the following ways:
- Performance inidicators
- Customer feedback
- Management Assurance Framework