You may receive Section 20 notices from our Home Ownership Team from time-to time. This page includes information on what a Section 20 is, the different types of notices, upcoming consultations and how to make observations on our proposals via our online observations form.
We’re legally obliged to issue a Section 20 (S20) notice to let you know about certain proposed major works or services planned at your building or estate. However, the S20s are also your chance to give us your opinion on these plans.
The S20 notice will explain what work is planned, why it’s being carried out and the anticipated costs. You then send us your ‘observations’ in writing.
There are different types of Section 20 notices, depending on cost, and whether we have existing contractors (see below).
Major works or services?
Major works are essential repairs, decoration, improvements or refurbishments. They don’t include things like internal decoration of a flat or house, which are the responsibility of individual customers.
We must go through a S20 consultation when the cost is more than £250 per home.
Services refers to ongoing work, like cleaning and grounds maintenance, or regular servicing of equipment, (maybe a lift, or a communal fire alarm).
What is a qualifying long-term contracts?
We carry out the S20 process to obtain qualifying long-term contracts, sometimes known as framework contracts. These are long term contracts with multiple pre-selected suppliers. This helps speed up works that need doing. For example, if we have an existing contract for reactive repairs, it speeds up the process for each repair. These also apply to major works.
When we order work through those pre-selected suppliers, we carry out the S20 process again to ensure you have a chance to feedback. Sometimes the large qualifying long-term contract will cover many areas. This is referred to as “Lots”. For example, on the S20 letter you receive, it will say the suppliers will cover several lots. E.g:
Lot 1A: Fire doors – Supply & install
Lot 1B: Fire doors – Supply only
Lot 1C: Fire door inspections
What do Section 20 notices have to do with my service charge?
We sign contracts with external providers for major works or services. Each one is passed through the Section 20 process as well as other feedback methods. A lot of work gets carried out through these contracts, some of which is re-chargeable to our residents. In this case, the cost of the work will appear as a service charge line. Every line on your service charge statement, will have been through the Section 20 process.
Often these contracts last for years, which is why S20s are such a good opportunity to have your say. These items may appear on your service charge statement for years to come.
There are different types of S20 notices depending on the works. Whatever the type, all you need to do is read that particular notice, and make any observations back to us. All the important information will be on the front cover page.
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.
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.
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.
Anything that comes under our responsibility as the landlord is classed as communal and therefore recharged to everyone in the building. For example, people living on the ground floor of a multi-storey building still need to contribute to the cost of lift maintenance.
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.
