£205k plus admin fees Section 20 works?

by Readers Question

13:29 PM, 20th February 2019
About 2 years ago

£205k plus admin fees Section 20 works?

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£205k plus admin fees Section 20 works?

I am a leaseholder in a block of flats in London. I have recently received a postal letter from our Managing Agent regarding Section 20 works being carried out on our building. This letter appears to be a Notice of Estimates, and references a previous letter, which I presume was a Notice of Intention that I never received.

This may be because I live abroad and the original letter never made it’s way to my forwarding address, though all correspondence with our Managing Agent is usually via email (which is my selected form of communication) so I’m unsure why they have elected to use a conventional letter as a means of communication in this instance.

Regardless, I am very concerned about the three estimates quoted, which are between 195k – 205k. This letter does not cite what the works are for, but does say that the Managing Agent has recommended going with a quote which is not the cheapest, and furthermore says that an 11% CDM administration fee and 5% S20 administration fee will be added on top of the total cost. this seems very excessive.

What rights do I have to fight this Section 20? Research suggests that the I can go to the First-tier Tribunal (Property Chamber), but I do not know on what grounds I can bring a charge. Does their failure to communicate the original letter via my selected form of correspondence (email) give me further grounds to reject this Section 20?

So far I have written to the Managing Agent (via email) asking for more details but they have not responded. I have called them and left messages but they have no rang back.

Many thanks for any welcomed advice!

Richard



Comments

Neil Patterson

13:39 PM, 20th February 2019
About 2 years ago

From the Leasehold Advisory Service:

>> https://www.lease-advice.org/faq/what-should-the-notice-of-intention-to-carry-out-major-works-contain/

A notice of intention must be sent to each leaseholder and the secretary of the recognised tenants association (RTA), if there is one. The notice must describe in general terms the works proposed, or specify a (reasonable) place and hours at which a description may be inspected.

The notice should also give the reasons why it is necessary to carry out the proposed works and invite observations in writing within 30 days. Where applicable it should also inform leaseholders of their right to nominate a contractor. The landlord must have regard to any observation received by the due date and seek estimates from nominated contractors where applicable.

Neil Patterson

13:41 PM, 20th February 2019
About 2 years ago

>> https://www.lease-advice.org/faq/what-should-the-notice-of-estimates-for-major-works-contain/

The notice of estimates must be sent to each leaseholder and the recognised tenants association, if there is one. It must include details of at least two estimates. The landlord must invite observations in writing within 30 days and must have regard to any observations received.

>> https://www.lease-advice.org/faq/what-should-the-notification-of-award-of-contract-for-major-works-contain/

This notice should be given within 21 days of entering into the contract. It must contain the reasons for the award of the contract and give a summary of the leaseholders’ observations regarding the estimates or provide a place at which these could be inspected. This notice is not required where:

the contract has been awarded to a contractor nominated by a leaseholder or recognised tenants association (RTA)
the contract has been awarded to the contractor with the lowest tender

Neil Patterson

13:44 PM, 20th February 2019
About 2 years ago

>> https://www.lease-advice.org/advice-guide/section-20-consultation-private-landlords-resident-management-companies-agents/

The law requires that leaseholders paying variable service charges must be consulted before a landlord carries out qualifying works or enters into a long-term agreement for the provision of services.

Detailed regulations have been produced under section 20 of the Landlord and Tenant Act 1985 (as amended by S151 of the Commonhold and Leasehold Reform Act 2002) which set out the precise procedures landlords must follow; these are the Service Charges (Consultation Requirements) (England) Regulations 2003 (‘the Regulations’). Similar regulations have been enacted in Wales.

The Regulations separate the consultation procedures into four schedules, each covering different contracts. This booklet explains only schedules 1, 3 and 4 (part 2). As set out above it does not explain the schedules relevant to councils and other social housing landlords.

The format of the notices required by the Regulations has not been prescribed in legislation, but suggested examples of what these may look like are contained in the Appendices to this booklet.

The requirements in the Regulations are defined under three headings:

Qualifying works
Qualifying long-term agreements
Qualifying works under long-term agreements

How many notices must be served?

Landlords may have to serve consultation notices on leaseholders at the following three stages in the process of awarding a contract:

the pre-tender stage – notice of intention; and
the tender stage – notification of landlord’s proposals (estimates); and
in some cases, notice of reasons for awarding the contract.

Ian Narbeth

10:25 AM, 21st February 2019
About 2 years ago

Richard, Neil has provided some valuable links. You asked: "..all correspondence with our Managing Agent is usually via email (which is my selected form of communication) so I’m unsure why they have elected to use a conventional letter as a means of communication in this instance."

The reason is that the notice must be given in writing and email does not count as writing for this purpose. If notice is not properly given the landlord will not be able to recover the costs through the service charge. Leaseholders living abroad need to set up a system, such as the Post Office's redirect service, to ensure they receive important mail.

Martin Thomas

10:45 AM, 21st February 2019
About 2 years ago

Reply to the comment left by Ian Narbeth at 21/02/2019 - 10:25
While it might be true that the notice should be in 'proper writing', that shouldn't have prevented the managing agent from also sending the notice by email as that was the preferred method of contact. The fact they aren't responding makes me suspicious that all is not well.

Ian Narbeth

17:20 PM, 21st February 2019
About 2 years ago

You may be right Martin but we are speculating. Assuming notices were sent out to all leaseholders in the block at the same time, whoever sent out the notices may just not have bothered to see if they ought also to have been sent by email to some of the leaseholders.

Badger

20:45 PM, 26th February 2019
About 2 years ago

I would add that even if you manage to get them on the technicality of not having notified you in accordance with the rules all that this will achieve is a delay whilst they do so.
You will need something more substantial than not having received a letter in order to materially effect the outcome of their current proposal.


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