What are major works and why do I have to pay?
Major works are usually large, one-off projects. They aim to extend and improve your building's life. They could include replacing old windows or a broken lift.
You must pay for major works as your lease requires. We call big, one-time projects "major works." However, they are also a service charge. They just need more 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 recharge 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
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.
Please write any suggestions or questions about the proposed works on the comments form included with the notice. You can also use it to nominate a contractor for 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 get a notice of proposal. It will list the tenders we received and the details of the two lowest ones.
It also lists the details of the works in the tender price and 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, 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 a contract with a contractor to provide goods or services. It lasts over 12 months and costs leaseholders at least £100 per year.
QLTAs could include: major works, like fitting a door entry system, or services, like Buildings Insurance cover. We enter into QLTA’s to try and get a better deal on our major repairs costs.
A QLTA with a contractor means that one specific contractor will do certain work for us at a set price for the contract's length.
For example, we could have a QLTA with a contractor to fit all our door entry system for the next three years.
What happens if the major works are listed on my section 125 notice?
If we do works within the first five years of your lease, your charge is limited to the amount on your S125 notice, plus an inflation allowance.
If we do the works on your S125 after 5 years of your lease, you will be recharged the full apportioned sum. This will happen even if the amount on your S125 is less.
What happens if the major works are not listed on my section 125 notice?
If we do works within the first five years of your lease, it is an un-itemised repair if it is not on your s125 notice. It will count against your annual block repair estimate limit, plus inflation.
If you've already been charged the maximum for your block repairs (estimate plus inflation), you won't be charged extra for the major works.