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Major works and Section 20 notices

If you have recently received a consultation notice from the Home Ownership Team we welcome your observations on our proposals, please complete our online observations form.

Major works

Major works are any repair, redecoration, replacement, improvement or refurbishment to the building or estate which will result in a cost exceeding £250 being passed on to any unit.

These works will only be to the landlord (Hyde’s) responsibility so will not include any works that are the responsibility of the individual resident (ie flat internal works such as bathrooms and kitchens).

Works are generally required to prolong the life of the building and/or to ensure that it is kept within a good state of repair as per our obligations under the terms of the lease.

Qualifying long-term contracts

Qualifying long-term contracts are contracts that the Hyde Group enters into for longer than 12 months and where any tenant or leaseholder’s contribution will be more than £100 in any one year. The contracts can cover items like grounds maintenance, reactive repairs and servicing of equipment etc.

Before the new contract is entered into all residents are consulted and asked for comments, and tenants, leaseholders and recognised Residents’ Associations are invited to nominate a contractor of their choice to carry out the services or works. Any likely charges are also pointed out. These types of charge are usually included in the annual service charge bill.

Types of S20 notices

At some time, you may receive a Section 20 (S20) notice from Hyde. This will be to give you advanced notice of proposed upcoming works that are planned to your building or estate.

This will be the start of a consultation process where you will be provided with relevant information (type of works, reason for them being carried out, anticipated costs) and given the opportunity to give us your opinions on the planned works and costs.

The type of notice you receive will be determined by the anticipated cost of the works and whether or not Hyde plans to use a contractor that it is already in a long-term agreement with.

Schedule 3

In this instance, the landlord will have previously entered into a long-term agreement with a contractor (or group of contractors) to carry out major works over a set period of time.

Once necessary works have been identified, Hyde will ask the contractor(s) to quote for the works.

Once costs are returned, the landlord will begin a one-stage S20 consultation with affected residents. The consultation period will last for a minimum of 30 days.

Estimated costs will be stated within the notice.

Schedule 4 (Part 1)

Due to the sum of the works, the landlord is legally required to advertise the proposed contract by public notice in the Official Journal of the European Union (OJEU). This is because of EU procurement rules.

A two-stage S20 consultation will be carried out. Each will last for a minimum of 30 days.

The Stage 1 notice will give homeowners the opportunity to raise observations but they will not have the right to nominate a contractor. 

The Stage 2 notice will give estimated costs following tender returns gained from the OJEU notice.

Schedule 4 (Part 2)

The sum of the works mean that the landlord will not be required to advertise through the Official Journal of the European Union.

The landlord will not use a contractor through an existing long-term agreement (as per Schedule 3) but through a full tendering process.

A two-stage S20 consultation will be carried out. Each will last for a minimum of 30 days.

The Stage 1 notice will give homeowners the opportunity to raise observations and they will have the right to nominate a contractor.

The Stage 2 notice will give estimated costs following tender returns.

Examples of S20 notices

Frequently asked questions

  • Consultations due and in progress

    The Home Ownership Team sent a number of Section 20 notices to residents in the last month. 

    Consultation notice

    Who will receive this?

    What is it for?

    When will you receive this?

    Pest Control – Stage 1 Notice

    Residents (all tenures) across Hyde stock

    Framework and Long Term Agreements for Pest Control service.

    This is the first stage of the S20 consultation process and informs residents that Hyde is looking to procure new contracts for managing Pest Control.

    The proposed new contract is expected to begin in April 2018.

     September 2017

    All observations should be received in writing from residents through:

     

  • What items of repair could be included?

    Works could include:

    • 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
  • What is Section 20 (S20) and how does the consultation process work?

    This is government legislation requiring landlords to consult with its homeowners for any upcoming major works (as defined above).

    Consultation for major works are now covered within Section 151 of the Commonhold and Leasehold Reform Act 2002 but was originally included with Section 20 of the Landlord and Tenant Act 1985.

    The specific consultation requirements are contained within the 2003 service charge regulations. The three relevant sections for major works are:

    • Schedule 3 -  A one-stage consultation with the contract being awarded to a contractor already within an existing Long-Term Agreement
    • Schedule 4 (Part 1) – A two-stage consultation with works advertised via public notice in the Official Journal of European Union (OJEU)
    • Schedule 4 (Part 2) – A two-stage consultation through a tender process

     

  • Why not bill this within the service charge?

    Hyde is responsible for day to day repairs to the building and estate and will usually look to recover the costs at yearend through the annual service charge.

    However, as larger, one-off, items of works exceed the S20 threshold of £250 per unit, we are legally required to consult with residents prior to commencing work. Consequently, the process is conducted outside of the usual service charge cycle.

  • How can I express my views?

    Each consultation period will last for a minimum of 30 days from the date of the notice. Residents and Recognised Tenants Associations (RTA’s) will be entitled to make any ‘Observations’ during that period and Hyde must give due regard to all points made before being able to progress to the next stage.

    Hyde will have 21 days to formally respond to all observations made.

    Please complete our online observations form. Observations must be made in writing (online form, post, fax or e-mail).  Although Hyde will be happy to discuss the proposed work either by phone or in person, these will not be formally logged unless they are documented in writing.

     

  • When will works be carried out?

    Except in the case of emergency repairs, works cannot commence until the end of the consultation period and after Hyde has given due regard to any observations made.

  • Can I opt out?

    No. Any works carried out will be to the landlords responsibility and therefore be classed as communal. It is therefore not possible for any one resident to be excluded from the works.

  • Will the cheapest quote/tender automatically be selected?

    Not necessarily. Although cost is important, Hyde must also consider other factors to ensure that it is choosing the most suitable contractor. This can include training of staff, size of workforce, health and safety procedures and insurance cover.

  • How is my share of the cost calculated?

    Individual charges will be billed in line with the terms of the lease. This could be based on rateable value, floor area, percentage split or, most commonly, a straight split between all units in the block.

  • Are there any additional fees to be added to the cost of the works?

    Hyde will generally pass on any costs associated with the works.

    VAT is fully rechargeable to homeowners.

    Hyde will also charge a management fee for administering the contract as well as the S20 and final accounts billing process. The percentage amount to be charged may be stipulated within the lease (i.e. 15% of the works costs) but, if this is not the case, we will pass on a cost deemed reasonable.

    In the case of specialist works (such as a lift renewal), we may need to employ external consultants and would therefore recharge their fees on top of the cost of works.

  • Do I have to pay based on the S20 amount?

    Currently, no. Although most leases allow Hyde to recover costs based on estimate, Hyde do not presently bill this way for major works.

    In many cases, a sinking fund balance has already been built up in advance meaning that further interim contributions would not be required anyway.

    This may be subject to change and Hyde reserves the right to charge on estimate in the future.

  • When will I be expected to pay?

    Under the current process, Hyde will demand any amounts due following completion of the works and sign-off of the final account. The demand will give a date by which the amount must be settled.

  • Will any previous sinking fund contributions that I have made be taken into account?

    Yes. The major works cost will be reduced by any sinking fund contributions in order to calculate the final amounts due from residents.

    It is possible in some instances that the amounts held within the fund exceed the cost of the works meaning no further amounts are due. However, a final account will still be served on all residents confirming the final cost of the works and the amounts being taken from the fund.

  • Why is Hyde recharging to renew windows to my flat?

    In the majority of Hyde’s leases, the windows are included within the landlord’s responsibility. This is because they are often deemed to be structurally integral to the building. In such instances, Hyde will maintain these windows and recharge the costs as a block item in the same way as a lift or roof repair.

  • I do not believe that I directly benefit from a service so do I still have to contribute to the costs?

    As with the window works mentioned above, any item within the landlord’s responsibility is classed as communal and therefore recharged across the building.

    Although residents on the ground floor may not use the lift, they are still liable to pay towards its maintenance as it is a communal item within their building.

  • What if I plan to sell my home before the works are complete and/or billed?

    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 prior to 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 is not a matter for Hyde and we will expect any amounts to be settled by the owner at the time.

  • I only bought my flat after the works were completed. Am I still liable for the costs?

    Yes. As mentioned above, the owner at the time of the demand will be responsible. These potential costs should have been taken into account by the two sets of solicitors during the sales process.

  • Can I challenge the costs of major works once billed?

    Major works are deemed to be a service charge meaning homeowners have the same right to challenge the costs as they do for ongoing services such as cleaning and gardening.

    Homeowners can ask for further supporting documentation from Hyde such as invoices and breakdowns.

    Ultimately, should a resident still believe that they have been unreasonably charged, they can submit an application to the First-Tier Tribunal (formerly known as the LVT) for a determination on the reasonableness of costs.

  • What if I cannot pay the amount being demanded from me or wish to discuss repayment?

    To discuss repayment, please contact our HydePay team on 0800 3282 282.

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