Consulting over charges (Section 20)
We are required by law to carry out formal consultation with leaseholders when we are going to carry out repair, replacement or renewal works to their property or block and the costs are likely to exceed £250 per household. This is known as ‘Section 20 Consultation’.
The type of works can be anything from painting the communal walls to a full roof replacement, but the trigger for consultation will only be if the works will be more than £250 per household. For example, if a block of ten flats is due to have external decorations carried out and the likely cost is going to be £3000, we would need to carry out consultation as the cost per property will be £300.
The Section 20 Consultation is normally carried out in two stages:
- Stage one: The first notice – ‘Notice of Intention’ – is simply to advise residents of the type of works we are planning to carry out, and to ask them if they wish to nominate their own contractor to carry out the works. They have a minimum of 30 days in which to make comments on this notice.
- Stage two: The second notice – ‘Statement of Estimates’ – advises residents on the contractors we have managed to get quotations from, and the likely cost of the works. Residents have a further minimum of 30 days in which to make comments to us regarding the costs or works.
Sometimes we have to serve a third notice, but this is only necessary if we haven’t chosen the lowest quotation or the contractor we have chosen isn’t one that a resident may have nominated.
There are some other types of notice that we sometimes serve, where major works are carried out under a much larger contract. The only real difference with these types of contracts is that residents are not able to nominate their own contractor – but the works are advertised across Europe, so in effect they are open to anyone to apply for as long as they are registered within an EU country.
We also have to consult with residents if we are planning to enter into a long term contract for day to day services – for example, grounds maintenance, communal cleaning or lift servicing. The trigger for consultation for these types of works is where the costs would exceed £100 per year.