Background to Section 20 Consultation Notices.
Under the terms of the lease, the landlord is responsible for the maintenance and improvement of the external and communal parts of the building and estate where your leasehold property is situated. Hounslow Homes carries out this obligation on behalf of the London Borough of Hounslow.
A proportion of the cost of this work is rechargeable to you as a service charge in accordance with the terms of your lease. Your lease explains this in specific detail.
As the cost of works can be significant, the law requires us to carry out formal consultation in particular circumstances with leaseholders who may be affected by the works.
If the cost to you is likely to be more than £250.00, we must provide you with certain information about the works, their cost and the reasons why we consider it necessary to carry out the works.
This is often referred to as “Section 20” consultation. The phrase “Section 20 consultation” relates to the law in this area: Section 20 of the Landlord and Tenant Act 1985 first introduced the requirement on landlords to consult their leaseholders about works. It has been amended since 1985, and the current rules regarding consultation are contained in Section 151 of the Commonhold and Leasehold Reform Act 2002.
What happens next?
Your consultation notice complies with what is required by the law. It provides you with relevant information for you to consider the works proposal and make observations or comments about the works, their cost and why we consider them necessary.
Please therefore read your consultation notice carefully.
It has been issued by the Major Works Team who work in the Home Ownership Unit of Hounslow Homes. These officers have specialist knowledge of the consultation process and work closely with the Property Services Department, who have produced the works proposal.
You may find it helpful to contact the Major Works Officer whose name appears on the consultation notice if you are unsure about any part of the notice. The Team will assist you with clarification of the details in the notice, but if you want to make any formal observations about the proposed works, you are required (by law) to make these observations in writing, and they must be received by the Major Works Team during the consultation period specified in your consultation notice.
The law requires us to respond to any observations you make during the consultation period within 21 days of receiving them. The Major Works Team will respond to your observations, though it is sometimes necessary for them to contact the Property Services Department, if any observations are technical in their nature.
The work
Subject to the completion of the formal consultation with you, work can then commence.
We expect the contractors who work on our buildings and estates to carry out works professionally and to a reasonable standard. We carry out regular inspections during the course of the works to ensure that this takes place.
Another method of assessing whether these standards are being achieved is by inviting you to comment. If you are concerned about the quality of works or the performance of the contractors, we want you to tell us about it. It is helpful if you provide as much detail as possible about your concern, as soon as possible, so that we can investigate the matter effectively.
There will normally be a site office for large-scale works, with a site manager. You may therefore wish to contact the site office directly. Alternatively, you may like to contact the Hounslow Homes Contract Manager – each major works project has a contract manager who works within the Property Services Department.
In addition, your Tenant Liaison Officer or Estate Monitoring Officer is also available.
You are therefore invited to approach any of the above noted personnel to raise your concerns. However, in the unlikely event that you experience any difficulty raising your concerns, you can contact the Major Works Officer named on your consultation notice, and we will forward your concerns to our Property Services Department for investigation.
If you would like, you can use the Performance Assessment Form attached to your consultation notice to make comments whilst the contractors are on site, or immediately after the contractors have finished their work.
When the works have completed on site, there is a 6-month period during which the contractor is required to return to site to rectify any problems. Therefore, it is essential that we are informed of any potential problems surrounding the works as soon as they happen.
Your right to challenge our proposal
If you think the scope or costs for the work stated in your notice are unreasonable, you have the legal right to challenge the works. This can be done before, during or after the works take place.
If you wish to challenge the works, please contact the Major Works Officer stated in your consultation notice, preferably in writing and give as much detail as possible. We will investigate and let you know our decision.
Following our decision, if you remain dissatisfied, you can make a formal challenge at any time during the major works process to the Leasehold Valuation Tribunal (LVT). The LVT can decide on a variety of issues including whether the charges for works and services are reasonable and, in circumstances where the law requires us to consult leaseholders, whether statutory consultation has been properly carried out. Leaflets relating to these options are available in Hounslow Homes’ offices, or we can post them to you on request.
Hounslow Homes currently operates a Dispute Resolution Scheme. This scheme meets the terms of the Arbitration Act 1996, and is intended to enable the settlement of a dispute using an independent specialist (an Arbitrator from the Chartered Institute of Arbitrators) who is not part of the legal system. As a leaseholder, you can ask for an independent Arbitrator to look into a disagreement you have with us about your service charges. You can contact the Income Recovery Team for further information about this scheme.
Frequently Asked Questions
This isn’t consultation. You are just telling me about works you will do anyway.
Legislation relating to leaseholder and landlord rights and obligations regularly makes reference to “consultation”, and this is why a lot of information and advice is produced using this word. However, the use of the word “consultation” in the context of leaseholders and their legal rights is often misunderstood.
Leaseholders have the legal right to be consulted about the proposed works, but the definition of consultation is that stated in the law. Leaseholders have the right to be informed about the works, the estimate of the cost and why we want to do the works. This legal right to consultation does not give leaseholders the option to agree the works or not. It is the right to information about the proposal only.
Therefore when we carry out “Section 20 Consultation” with our leaseholders, we are providing you with information about works, which we intend to do. We are not inviting you to choose whether you want the work done.
I haven’t been consulted about these works. I didn’t know anything about this.
When you receive your consultation notice, this is normally confirmation of the finer details of a project, which has already been publicised. Information about possible future works are regularly published in the Hounslow Homes News and appear on our website.
In addition, our broader consultation strategy with residents incorporates a wider sharing of information about works and involves direct contact with residents before the project is finalised. This can often shape the final scope of the project.
Tenant Liaison Officers who work within the Area Housing Teams of Hounslow Homes, are employed to carry out this consultation, and regularly hold meetings and issue letters about proposed works long before you receive your consultation notice.
Very occasionally, it is not possible to complete this form of consultation before you receive your “Section 20 Consultation”. This is normally as a consequence of the urgency of the work – there may not be enough time to carry out resident consultation prior to the issue of the “Section 20 Consultation”.
I live on the ground floor of my block. I don’t get any benefit from the roof.
The obligation in your lease relating to your liability to contribute towards major works is not based on whether you receive a direct benefit from the work.
Your leasehold property is in a block/building on an estate (if applicable) where works are planned, and your lease states that you must contribute to works and services provided to the block/estate. This is the reason you are liable to contribute. The same is true of works to a lift in your building, grassed communal areas or playgrounds (if these form part of your building or estate).
You have only provided one estimate. How do I know this is a competitive price?
Our contract partners were subjected to a thorough and competitive procurement process before we decided whether to work with them. This process involved a traditional tender process relating to costing and additional requirements to meet our need to achieve Best Value.
Contractors were required to provide estimated costs for different types of work: for example, an estimate of the cost to renew a roof on a block of flats with 4 floors. They were also required to comply with specific rules and regulations regarding contractor conduct, health and safety and equalities.
We are therefore satisfied that the cost of work is competitive and reasonable.
I don’t know anything about building works. How can I make observations?
The Property Services Department of Hounslow Homes is staffed with professional people with technical skills and knowledge. If there is a technical detail in your notice that you do not understand, please ask us for clarification. In the alternative, you may wish to seek independent technical advice (though there may be a cost associated with this).
You haven’t given me enough information to make my observations.
The information contained in the notice is considered to be sufficient to enable you to make observations about the works. If there is some part of the information that you would like to clarify, please contact the Major Works Officer stated in the notice.
We often hold some additional information about the proposed works, which we have summarised in the notice. If this is available, you can view it at our offices or have a copy if you would prefer.
Hounslow Homes has so much money to spend. You are just spending the money without thinking.
It is true that the financial boost associated with being an arms length management organisation has enabled us to spend a significant amount of money in achieving the Decent Homes standard, which has been set by Government. The vast majority of the spending has been in relation to modernising the internal parts of tenants’ homes. It has also enabled us to complete necessary work to the windows and roofs in a number of our blocks in accordance with the Decent Homes standard.
The decision-making process surrounding the identification, definition and completion of a major works project is well defined, with specific links to internal financial procedure which requires the proposed works to be considered by senior members of Hounslow Homes before the project is approved.
Please therefore be assured that we carefully consider all our spending decisions.
Your notice is asking me to pay for works now, even though the works haven’t started.
The Section 20 Notice is not an invoice for payment, nor is it a demand for payment.
What it shows is an estimate of the contribution you will have to make towards the cost of the proposed work. The actual cost and therefore your actual contribution will not be fully known until after the work is completed, after which time you will receive an invoice. Depending on the size and scope of the work, leaseholder invoices are normally issued within 6-12 months following the completion of the “Section 20 Consultation”.
In the meantime, you may wish to start thinking about how you will pay your contribution on completion of the works, perhaps by placing money regularly into an account so that when your invoice arrives, you will be able to settle the contribution immediately.
I don’t understand how you have calculated my contribution. I have to pay more than my neighbour.
Your lease states that you must pay a reasonable proportion of the cost of the work. It also requires us to calculate your contribution towards works of improvement using rateable values. In view of this, we now calculate estimated and actual contributions towards all forms of major works on a “rateable value” basis. We consider that this basis of recharging complies both with the requirements of your lease (and the leases of all our leaseholders) and the law in this area i.e. we believe it is the most reasonable method of apportionment when billing major works.
For works that are proposed to the estate:
The total rechargeable estimated cost of the estate works (abbreviated to EW)
The total of all the rateable values for all properties in your estate (abbreviated to ERV) The individual rateable value of your property (abbreviated to YRV)
We calculate your individual contribution towards work to the estate as follows:
The total cost of estate works divided by the total of rateable values on estate. This is then multiplied by the rateable value of your property = your contribution
EW/ERV xYRV = Your contribution
For works that are proposed to the block :
The total rechargeable estimated cost of the block works (abbreviated to BW)
The total of all the rateable values for all properties in your block (abbreviated to BRV) The individual rateable value of your property (abbreviated to YRV)
We calculate your individual contribution towards work to your block as follows:
The total cost of estate works divided by the total of rateable values in block. This is then multiplied by the rateable value of your property = your contribution
BW/BRV x YRV = Your contribution
This method of calculation means that leaseholders who own larger properties contribute slightly more than their neighbour who owns a smaller property, because the larger property has a higher rateable value than the smaller property.
What are the professional fees and administration charge for? Am I paying twice for the same thing? Isn’t this covered by the management fee I pay in relation to my day-to-day service charges?
Your lease (as with all other leases issued by the London Borough of Hounslow) permits us to recover our costs in completing major works. This is completely separate from the cost of the works themselves. Schedule 6 of your lease explains your obligations in this regard in more detail.
What this means is that if we employ surveyors or contract managers (for example) in the course of the major works project, we are able to recover a proportion of the cost of these “professionals” from you. This is the basis of the “Professional Fee”.
In addition, we can recover the costs of administration involved in the issue of “Section 20 Consultation” and the calculation and billing of major works contributions for leaseholders. This is the cost incurred by the Home Ownership Unit, and is generally referred to as the “Major Works Administration Fee”. It is entirely separate from the management fee that is charged within your day-to-day service charges.
Therefore there is no duplication of charging and those charges that are raised are correctly due under your lease.
How do I pay this contribution?
You do not have to make a payment now, as the contribution stated in the consultation notice is an estimate of what we believe your contribution will be. You will receive an invoice for your contribution following the completion of the works.
The lease requires full and immediate settlement of major works contributions. However, we are aware that this may not always be possible, and therefore there are a number of options which may (depending on your individual circumstances) be available to you.
If you are worried about how you will pay for this contribution, you may like to talk to an Income Recovery Officer within the Home Ownership Unit of Hounslow Homes, who will be able to tell you about a number of options that may be available:
Call 0800 085 65 75
Email: Home.ownership@hounslowhomes.org.uk
If after receiving your actual invoice you are unable to settle your contribution in full, please contact our Income Recovery Team without delay, to discuss repayment.
Home Ownership is working in partnership with CHAS CL, an independent debt advice and counselling service, to provide support for some leaseholders in hardship. Further information can be obtained from the Income Recovery Team (please see the numbers above). Although CHAS CL normally provides advice to leaseholders that have received their invoice for contribution towards works, we have also referred some leaseholders who have received a “Section 20 consultation” notice with a high estimated contribution. If you would like to be considered for referral to CHAS CL, please contact the Income Recovery Team.
Financial advice can also be obtained from Citizens’ Advice Bureaux and from the Council’s Welfare Benefits & Money Advice section on (020) 8583 5016.
If you have a low household income, you may be able to get financial support from the Department for Work and Pensions. Please contact the DWP directly to clarify whether you may be entitled to support. They will normally ask for some additional information about the consultation and the costs, and we are happy to provide this to you if required.
You want to do work to the building. Isn’t this covered by the building insurance policy?
In normal circumstances, the building insurance policy does not cover the cost of maintenance to the block. This is considered to be outside the terms of the policy. However, there are specified insured risks (such as subsidence) within the policy that may result in a successful claim under the policy. If you would like to clarify whether the works mentioned in your consultation notice are covered by the policy, please get in touch.