Section 20 and major works
Most leaseholders are aware of Section 20 of the Landlord and Tenant Act 1985 (“the Act”) which requires a landlord of a block of flats to consult with its leaseholders prior to either:
a) entering into any Qualifying Long Term Agreements (“QLTA”); or,
b) carrying out any “major works”.
A QLTA is a contract between the landlord and another party (a company or an individual) to supply goods, services or works to the block for a period of 12 months or more and where each leaseholder will be required to contribute at least £100 per year towards that cost.
“Major works” are defined as works costing £250.00 or more per leaseholder in the building.
Should a landlord wish to do either of the above, they will be subject to the applicable consultation requirements as set out in the Service Charge (Consultation Requirements) (England) Regulations 2003.
This can be a complicated area of law and sometimes the necessary steps may not be taken by a landlord who is looking to undertake works or perhaps the landlord has taken some of the necessary steps, but they have not carried out the consultation process fully.
Certainly with recent events in the news, landlords appear to be taking steps to ensure that their blocks are safely maintained. However, in doing so, it could be questionable as to whether the works being undertaken are undertaken correctly (e.g. if major works, have they complied with the consultation requirements) and whether the works are actually necessary or if they could in fact be classed as improvements, and not actually required under the leases at all
The first things for a landlord to consider are: –
- Whether the works fall within either of the above categories, a QLTA or major works; and,
- Who should be consulted – Recognised Tenant’s Associations (“RTA”) also need to be notified as well as individual leaseholders.
Briefly, the consultation process consists of the following: –
- Notice of Intention – which is served before any tenders are applied for;
- Notice of Estimates – which is served at the tender stage when the landlord is able to detail and evidence the costs of the proposed works; and
- Notice of Reasons for Awarding the Contract (if required) – such a notice is required in cases where the landlord has opted into an agreement with a contractor that has neither submitted the lowest estimate nor was nominated by a leaseholder or RTA.
What about timings?
Each notice needs to give the leaseholders (and RTAs) 30 days to consult and comment. Although the consultation requirements don’t require the notices to specify a specific date for the leaseholders and RTAs to respond by, to ensure that the required 30 days is given and there is no confusion in that regard, it is sensible to specify the actual date in the notice. When specifying the response date, consideration should also be given for delays in the post.
If less than 30 days is given, the landlord will not have consulted properly with the relevant parties; meaning that the notice would be invalid which may result in the leaseholders (and RTAs) not be responsible for payment of the service charges relating to those works.
Our Leasehold Reform team at Bolt Burdon could assist you whether you are a leaseholder concerned about the works that a landlord is undertaken or if you are a landlord who is thinking about carrying out some works but are unsure of what steps should be undertaken before any works commence.