Major works – "the potential for service charge dispute"

The need to inform you of major works in your building has been totally transformed over the last twenty five years but has lead to a substantial increase in Service Charge Disputes.

The Landlord and Tenant Act 1985 made landlords provide information to leasehold owners on works before they commenced, subsequently the Commonhold & Leasehold Reform Act 2002 changed the need to serve notice on owners where any one resident had to pay more than 250 pounds for any major work to be carried, it also acknowledged that any long term contracts (i.e. any contract in excess of one year)   should also attract the need for a notice on leasehold owners.

It would appear that even today, some 25 years later, in relation to service charges landlords and their managing agents do not in some instance comply with the regulations either because they take a chance that residents do not know the law or that they simply are just not aware of the regulations themselves thus potentially costing residents substantial sums of money.

What are the major works rules:

For major works  the rules relating to service charges are now reasonably simple in that if the work will cost more than 250 for any one owner then a notice under the act must be served.

In the first instance you will receive a notice of intention which will specify major works they think might need doing The notice must describe in general terms the proposed works, or specify a place and hours where the description may be inspected.

The notice must state the reasons for the works, and invite written observations, specifying where they should be sent, over what period (30 days from the notice), and the end date. Further, the notice must contain an invitation for nominations of persons from whom the manager should obtain estimates. The landlord must have regard to written observations received during the consultation period.

Thereafter, and subject to information received, the Landlord will then obtain quotations from at least 2 contractors, one of whom must have no relationship with the landlords (please note slightly different rules apply if there is a formally constituted residents association or other exceptions which are listed in the act). They must then serve a further notice with all the information and quotations before commencing works.

At each juncture time limits apply.

How much should you  pay ?

Simply, you need to check your lease for the percentage of the   service charge works and indeed what types of work you are responsible for. Do not assume that you are responsible for works just because the Landlord or the Managing Agents tells you that you are!

If you are not happy what do you do ?

If you feel that you have not been treated fairly by virtue of the fact that your Landlord or Managing agent have not complied with your lease or served a proper Section 20 notice then you are able to refer the service charge dispute  to the Leasehold Valuation Tribunal (known as the "LVT"), The LVT offer a national service in the form of an informal Arbitration service. Anyone can apply and attend but it is recommended that you take professional advice before embarking on such an application.