Major Works Guidance For Landlords & Freeholders
As a landlord, your property may need major building work to maintain, repair or improve it.
In these circumstances, it’s essential that you consult the leaseholders at your property.
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What Are ‘Major Works’?
Major works (sometimes known as ‘qualifying works’) refer to works on a building or premises where the cost to each leaseholder is £250 or more.
If there is a ‘reserve fund’, you may use this to cover some of the cost. This will depend on the type of works and the wording of the lease. If you are able to use the reserve fund but there is still a sum outstanding, this will need to be recovered from the leaseholders.
The terms of the lease will detail how and when service charges can be demanded together with what types of work can be carried out at the property
The party responsible for major works will depend on the lease. If there is a Right to Manage Company or Tribunal Appointed Manager in place, major works may be their responsibility, as opposed to that of the landlord.
What Are The Requirements To Consult?
Sections 20 – 20ZA of the Landlord and Tenant 1985 Act provides that landlord (or whoever is responsible for such works) must consult the leaseholders before:
- carrying out qualifying works (‘major works’) which would result in the contribution from any leaseholder to be more than £250; and
- entering into a qualifying long term agreement which would result in the contribution from any leaseholder to be more than £100 in any 12 month accounting period.
The consultation requirements are written within regulations referred to by the 1985 Act.
They involve a three-stage process:
- A notice of intention should be sent, illustrating the proposed works (in general terms).
- A notification of proposals/estimates should be sent.
- A Notification of the award of contract.
The notices should allow the leaseholders to make observations and the landlord should have regard to these.
The notices must also be sent within certain time periods.
Is Consultation Always Necessary?
Consultation can take some time to complete. If the works on your property are urgent, you can apply to the First-tier Tribunal (Property Chamber) (FTT) for dispensation from the need to consult.
You can apply in advance of the work being carried out or retrospectively.
If a landlord (or whoever is responsible for such works) fails to follow the consultation process, they may not be able to recover service charges above the level of the statutory minimum amounts (£250 and £100 respectively).
What If Leaseholders Can’t Pay?
Some leaseholders may struggle to pay a large major works charge.
If leaseholders believe the charge is unreasonable and this is brought to tribunal, the judge will determine whether the charges have been reasonably incurred.
If the leaseholder still does not pay, you can find our advice on unpaid costs here.
Are You A Landlord Considering Major Works? Contact The Experts
Leasehold law is extremely complex. Coles Miller’s residential leasehold team is extremely experienced in acting for both leaseholders and freeholders – so we have expert knowledge on all angles of the process.
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