Just like you might shop around for new car insurance or a new mobile phone, we take some time before entering into a new contract to ensure residents receive great service and value for money.
Whilst looking around to place a new contract or renew an existing one, we produce a 'service specification', which is simply a list of what we require suppliers or contractors to do and how we expect the service or works to be delivered. Suppliers then submit a quote for us to consider and determine the best value for money for our residents.
During the process, we are also required to consult with our affected residents. This is called a Section 20 Consultation.
What is a Section 20 Consultation?
The law (Section 20 of the Landlord & Tenant Act 1985, as amended by the Commonhold & Leasehold Reform Act 2002, Section 151), requires affected residents to be consulted before the landlord carries out ‘qualifying works' or enters into a long-term agreement for the provision of services.
Qualifying works are works such as repairs, communal redecoration or cyclical works, that will cost affected residents over £250 for a single item of work.
A long-term agreement is any service or contract for works, such as grounds maintenance, communal cleaning or lift servicing, that lasts longer than 12 months and will cost affected residents over £100.
How does a Section 20 Consultation work?
There are three key stages to the Section 20 consultation process:
We send you a legal Notice which details what type of work or service we are planning. You have the right to reply with your comments/observations within 30 days of the date of the notice. In cases where we are not legally required to give public notice, you can nominate a contractor. We will respond to and consider all observations and nominations received during the consultation period.
Once we have tendered for the work or service, and received quotes from at least two contractors, we will send you the second legal Notice with details of the quotes. This allows us to give you an estimate of how much the work or service is likely to cost. You have the right to reply with your comments and/or observations within 30 days of the Notice.
At the end of this stage of the consultation, and after taking in consideration any feedback, we appoint the contractor.
If, after reviewing the tenders, a decision is made not to appoint the lowest priced or a nominated contractor, we must issue you with a Notice of Reason explaining our decision.
What is a sinking fund and what happens if I am paying into one?
A sinking fund, or reserve fund, is where money is set aside specifically to cover any longer-term maintenance or works which may be required for the communal areas of a block in the future. Your lease will state if there is a sinking fund for your property.
If the amount collected in the sinking fund covers the cost of the works, you will not be required to pay an additional amount, but we will send you a statement to show what has been deducted from the fund.
A sinking fund builds over time to allow for future maintenance. If not enough has been collected to pay the full balance, we consider how much of the fund can be used whilst leaving enough to cover future works. The outstanding amount will be included in your balancing charge at the end of the financial year. We will include information regarding any sinking fund in the Notices, if applicable.
I have bought or sold a property in the middle of a Section 20 consultation. How will this affect me?
If you have sold the property whilst a Section 20 consultation is taking place, the new homeowner is responsible for any charges related to the works or service.
If you have bought the property during a Section 20 consultation, your solicitor should have made you aware of this prior to the purchase, and may have agreed a retention fee for the works with the seller’s solicitor. You should contact your solicitor if you have any queries relating to retention fees.
Final costs for works
Once the works have been completed and we have received the final invoice from the contractor, we will send you a final cost summary (S20b). This includes a breakdown of the costs that will be included in your service charges.
If you have any queries relating to Section 20 Consultations, please email S20.firstname.lastname@example.org.
You can also let us know of any observations you have concerning current projects by completing the form below.