Major works consultation
Major works service charges are for necessary repairs, renewals, and in some cases, improvements which we can't do under the normal day-to-day repairs arrangement due to the amount of work involved. We will write to you before going ahead with any work to tell you what we are planning and how much you are likely to be charged. We will also give you an opportunity to comment and ask questions.
There is a consultation process we must follow for any works that will result in leaseholder costs of more than £250. This process is set out in Section 20 of the Landlord and Tenant Act (1985) (amended by section 151 of the Commonhold & Leasehold Reform Act 2002).
The process we must follow is summarised below.
- We send you a formal 'Section 20' notice in writing.
- The number of notices and the content will vary depending on the type or work or contract and whether we have to advertise the works or contract by way of a public notice.
- The different types of notices are detailed in our S20 consultation process explained (pdf) leaflet.
- We must send you a consultation 'Notice of Intent' if we are planning to engage with a contractor to carry out works, or provide services, that may cost you more than £250 or £100 per year.
- We must send you a further consultation 'Notice of Estimate' (or 'Notice of Proposal' in the case of services) setting out details of the winning and second place contractors/service providers, details of the works/services as well as the estimated costs.
- If we then plan to carry out works to your building using a contractor who has been appointed following the above process, we are required to send you a further consultation 'Notice of Intent' detailing the work planned and your estimated contribution.
For fuller explanation please see S20 consultation process explained (pdf).
Example notice of a proposal (pdf)
We invoice leaseholders for major works based on the estimated cost once projects are underway. Extended payment options are available, based on the cost of the works.
As well as the formal consultation we are required to carry out, we aim to ensure you are involved in the following key stages:
- when the works are first planned
- before the works start
- while the works are in progress
- when the works have been completed.
How you can take part in the consultation
The consultation notices will contain information about what we plan to do, why it is necessary and also give you the opportunity to send us written comments about the proposals within 30 days. We must carefully consider any observations we receive during each consultation period and respond within 21 days.
In some circumstances you will also have the right to nominate a contractor to tender for the works. This does not apply in cases where we have to advertise contracts by way of public notice. We will advise you in the relevant notice if you are able to nominate a contractor.
Contact us
For any enquiries about major works please contact us on:
0800 840 4501 (free from landlines) or
0208 753 4500 (from mobiles)
Ways to pay your major works invoice
From time to time we have to carry out work on your estate or block. We do this to keep it in good condition. This is known as major work.
Examples of major work include:
- replacing the roof
- installing double glazing
- painting the outside or shared parts of the building.
Before we do this sort of work, we will consult you. We will give you details of what we will do and the kind of costs involved.
Under the terms of your lease, you will be responsible for a share of the cost of this work and will be required to pay for it within 21 days of the date of the invoice. We understand that not everyone will find it easy to pay for major work. However, there are some ways to make it easier to pay.
For help, please call a leasehold income recovery officer on 0208 840 4501 (freephone from a landline) or 0208 753 4500 (from a mobile) within 21 days of the invoice date
Early payment discount of 2.5 per cent
An early payment discount of 2.5 per cent is available to help with major works bills. This option is only applicable where full payment is received within 30 days of the invoice date and is available to all leaseholders.
Payment plans
The following payment plans are only available to resident leaseholders who live in the property as their only, or principle, home.
You should always get independent financial advice before you sign any financial agreement.
All payment plans start on the date of the invoice.
Interest-free instalment scheme – up to 36 months
If you cannot afford to repay the cost of the work in one payment, you can pay your bill, interest-free, over a period of up to 36 months.
Five-year payment scheme
For large bills, if payment over 36 months will still prove difficult, we have introduced a five-year payment scheme. The first 36 months will be interest free with the remaining 24 months subject to interest at five per cent above the Bank of England base rate (this is a variable rate).
Discretionary loans
You may qualify for a discretionary loan from us to help you spread the cost of major repair work or work on structural defects. You will have to pay interest on the loan over the repayment period. We will set this interest rate at 0.25 per cent above the average council lending rate for the previous year and review this rate each year.
- Amount of the invoice: between £750 and £2,250
Length of the plan: 36 months (three years) - Amount of the invoice: between £2,251 and £7,500
Length of the plan: 60 months (five years) - Amount of the invoice: £7,501 or more
Length of the plan: 120 months (10 years)
These loans are like a mortgage, which means we will have to put a charge on your property as security for the loan. This means that we will tell the Land Registry that you have a debt against the property. If you then sell the property, your solicitor will know that you have a debt outstanding that will have to be paid from the proceeds of the sale. There are fees attached to this loan which can be added to the loan if agreed.
The right to a mandatory loan
If you have been charged more than £2,250 for any major repair work and your lease is not more than 10 years old, you may have the right to a loan that you can repay over a number of years. The minimum loan is £750 and the maximum loan (or loans) is £30,000. The loan has interest added at the local authority mortgage rate, which is higher than the rate of interest you would have to pay for discretionary loans. If you want to apply for a loan, please call a leasehold i ncome recovery officer on 0208 840 4501 (freephone from a landline) or 0208 753 4500 (from a mobile).
Delayed payment
In some circumstances, you may be able to delay payment by agreeing to us putting a charge on your property. This means interest will be added to the charge and the whole debt will automatically be paid when you sell your property. You will only be able to use this option if you cannot afford to pay by any other method.
Delayed payment (interest payment only)
As well as the option above, you could choose to pay the interest only each month, to reduce the amount you will have to pay when you sell your property. We will give you details of this option if it is appropriate for your circumstances.
If you want to apply these options, please call a leasehold income recovery officer on 0208 840 4501 (freephone from a landline) or 0208 753 4500 (from a mobile).
Paying on estimated invoicing
The above options are currently available for resident leaseholders only except where stated. We will be introducing paying on estimate for major works in the future and the options will be available to all leaseholders when this occurs. The payment schedule will be reviewed at final account stage and non-resident leaseholders will have to pay any outstanding balance in full within 30 days.
Other options
The following are privately available options and should not be considered without obtaining professional financial advice
A savings account
You can save towards the cost of any major work by setting up a bank or building society account, or a National Savings account. You can then regularly put aside as much money as you can afford, so that when you get the bill you will have some money to help you pay. Also, you could be getting interest on the money you have saved.
Claiming benefits
If you are on income support, you may be able to get help with the cost of any major work done to your property. You should contact your benefits agency who can tell you how to claim. You must apply as soon as you get the bill or you will not be entitled to any benefit. If your claim is refused, you can appeal against the decision. Again you must act quickly to avoid losing your right to appeal.
Extending your mortgage
You may be able to extend your existing mortgage. You will need to speak to your mortgage lender about this.
Your lender is likely to be able to offer you a better interest rate than we can offer you.
You should always get independent financial advice before you sign any financial agreement.
Personal loans
You can apply to your bank or building society for a personal ‘unsecured’ loan to cover the cost of your bill. An unsecured loan does not involve a mortgage, so your home is not directly at risk if you do not keep up the payments. However, the interest charges are normally much higher than for a mortgage. You should check carefully:
- what level of interest and other costs you will be charged
- if you can afford all the payments
- what other costs or penalties may apply if you cannot afford all the payments.
You should always get independent financial advice before you sign any financial agreement.
Equity-release schemes
These schemes are offered by financial organisations and the packages they offer can vary significantly. There are different equity-release schemes and they are generally open to older homeowners. These schemes are designed to free up cash based on the equity in your home. (The equity in your home is the value of your property after the charges against it, such as the mortgage, have been taken off.) The following are some of the equity-release schemes available from various financial institutions.
- Home-reversion plans: these allow you to sell all or part of the value of your property for a tax-free lump sum, but you have the right to live in it. In other words, you are selling your home, or a share in it, so you will become a tenant and have a lease. The lease will usually be for 99 years at a very low rent (called a ‘peppercorn rent’). However, as you were already a leaseholder before this, you will now have an underlease and the length of this underlease will depend on the length of time the head lease has to run.
- Home-reversion plans (part): these allow you to release part of the equity in your home. You still have the right to live there and, when you sell your property, you (or your estate if the property is sold after your death) will get some of the money from the sale.
- Roll-up lifetime mortgage plans: these plans let you borrow a percentage of your property’s value without having to make any repayments. You can pay the original debt and any interest due on it when you sell your property. If it is a long-term arrangement, there is a risk that you could end up owing more than your home is worth.
- Interest-only lifetime mortgage plans: like the roll-up plans above, these allow you to borrow money against the equity of your property but you have to pay interest each month. These plans are often available for those who are too young for equity-release plans.
All of these schemes are funded through property investors who will be looking to get your property for the best prices they can. If you decide to use one of these schemes, you are selling part or all of your home to someone else, although you can still live there, rent-free, until you decide to sell your share or when it is sold after your death.
If you use one of these schemes, you will be making a large financial commitment. We strongly recommend that you make sure you are getting the best deal available and the right one for you. Organisations like Age Concern and Help the Aged are familiar with equity-release schemes and you may want to talk to them before talking to any company offering the scheme.
Please be advised of the additional costs with council loans.
£150 set up and administration fee
£200 legal costs where applicable
£50 to register the loan as a charge against the property where applicable
We can't give you financial advice. You will have to decide which option is best for you.
The following organisations might be able to offer you financial advice:
- Citizens' Advice is the largest provider of free impartial and holistic debt and money advice in the UK
- National Debt Line offers free confidential and independent advice on how to deal with debt problems.
Other sources of help and advice
NB: Payment options are constantly under review and subject to change. Please contact the income recovery team on 0208 840 4501 (freephone from a landline) or 0208 753 4500 (from a mobile), for the most up to date information.