S20 notices, our contracts, and your service charges

If we have a long-term contract (see What is a qualifying long-term contract), to carry out major works, we’ll get a quote from them before we do anything else. We’ll send that to all the affected customers in the form of a Section 20 Schedule 3 notice. Consultation will last a minimum of 30 days.

If we don’t have a long-term agreement with contractors (see What is a qualifying long-term contract?), we issue a Schedule 4 Section 20 Notice. There are two types of Section 4:

Part 1 – where planned works is over £118,000. The S20 feedback influences the contract that we create. We then advertise that contract to potential suppliers. You won’t be able to nominate a contractor.

If the cost is over £118,000, UK procurement rules say we have to advertise the contract publicly on the ‘Find a tender’ website. But first, we issue the S20 to get feedback.

Part 2 – where planned works is under £118,000. The S20 feedback influences the contract that we create. We don’t have to advertise on the ‘Find a tender’ website, but we do have to go through a full and thorough tendering process. In a Part 2 notice, you can nominate a contractor yourself.

The Schedule 4 S20 notice, both Part 1 and Part 2 follow a two-stage process.

• Stage 1- Give customers the details of the work we’re proposing to carry out. Customers have the chance to make observations about the works. We then form the contract and advertise. We evaluate all the proposals that come in, and score them to see who we think is best
• Stage 2- Give customers the estimated costs from the tenders we receive and confirm who our chosen contractor is. Customers have a chance to come back with any observations about the scope of work and the estimated costs provided.

Each stage lasting a minimum of 30 days.

• Internal or external redecoration and repair
• Structural works
• Roofing and rainwater goods (guttering, drainage, pipework)
• Windows and doors
• Communal lighting (including estate lighting)
• CCTV
• Digital TV aerials
• Door entry system
• Vehicle barrier gates and bollards
• Lifts
• Mechanical ventilation
• Fire equipment (dry risers, fire extinguishers)
• Cavity wall Insulation
• Communal boilers.

We’re responsible for day-to-day repairs to buildings and estates and usually recover these costs through the annual service charge.

However, as larger, one-off, works cost more than the S20 threshold of £250 per home, we’re legally required to consult with customers before starting work, separately from the service charges.

Each consultation period will last for a minimum of 30 days from the date of the notice. Customers and Recognised Tenants Associations (RTAs) can make ‘Observations’ during that time and we give these ‘due regard’ before being able to progress to the next stage, ie we should reply to all of your observations within 21 days.

Observations can be made in writing via post, fax, email or by using our online form. We’re happy to discuss the proposed work by phone or in person but any observations won’t be formally recorded unless we receive them in writing.

Except in the case of emergency repairs, work can’t start until the end of the consultation period and until we’ve given ‘due regard’ to any observations made, ie we should reply to all of your observations within 21 days.

Any work covered by a Section 20 notices will be communal and so it’s not possible for customers to be excluded.

Not necessarily. Although cost is important, we must also consider other factors to ensure we pick the most suitable contractor. This means we take into account staff qualifications, experience, the size of the workforce, health and safety procedures and insurance.

We’ll bill you based on the terms of your lease or tenancy agreement, which could be based on rateable value, floor area, percentage split or, most commonly, an equal split between all homes in a building.

We’ll charge a management fee for administering the contract, the S20 process and final accounts billing. This is based on a percentage of the total cost of the work and may be stated in your lease or tenancy agreement; if it isn’t the fee we pass on will be reasonable.

For some projects, such as replacing lifts, we may need to employ external consultants and will recharge their fees on top of the cost of work.

Please note that VAT is fully rechargeable to customers.

Not necessarily. In many cases, the building’s sinking fund will cover the cost of the work. While your lease or tenancy agreement will allow us to recover costs based on the estimate, we don’t currently bill major works in that way (although this may be subject to change and we reserve the right to charge on estimates in the future).

We’ll ask you to pay when work has been finished and the final account has been signed off. We’ll let you know how much you have to pay and the deadline for payments.

Yes. The cost of work will be reduced by any sinking fund contributions. If the sinking fund is more than the cost of the work, then we won’t ask you to pay any more, but we’ll send you a final account to let you know how much money we’re taking out of the fund.

Windows are our responsibility in most of our leases because they are often considered to be part of the building’s structure. In these cases, we’ll maintain the windows and recharge the costs to customers in the same way as a lift or roof repair.

Windows are our responsibility in most of our leases because they are often considered to be part of the building’s structure. In these cases, we’ll maintain the windows and recharge the costs to customers in the same way as a lift or roof repair.

As part of the standard pre-assignment process, the solicitor of the prospective buyer would usually contact the seller’s solicitor asking for certain information regarding the property. This would include whether there were any known works planned.

Assuming the sale completes before billing, the new homeowner would be responsible for settling any outstanding charges. A retention fee may be set aside between the two sets of solicitors to cover this amount. However, this isn’t a matter for Hyde and we expect any amounts to be settled by the owner at the time of billing.

We expect any outstanding amounts to be paid by the owner at the time of billing. retention fee may be set aside between the two sets of solicitors involved in the sale to cover this amount. However, this isn’t a matter for Hyde.

You have the right to challenge the costs and can ask for supporting documentation, such as invoices and cost breakdowns. If you believe the charges are unreasonable, you can submit an application to the First-Tier Tribunal for a determination on the reasonableness of costs.

Please get in touch with our income team on 0800 3282 282.