Module 4. Lesson 3 - Major Works & Section 20
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Major Works & Section 20
Major Works & Section 20: Going Deeper
Recap on Notices: Qualifying Works
Notice of Reasons Issued within 21 days of awarding the contract Only needed if lowest-priced contractor or nominated contractor is not used. States reasons for choosing contractor Summarises leaseholder observations and landlord’s responses Provides inspection access to full documents
Statement of Estimates Landlord obtains at least two estimates and shows costs At least one unconnected contractor included Summary of earlier leaseholder observations displayed - with responses Invites inspection of relevant documents 30-day deadline for further written observations
Notice of Intention This is the first formal step in the Section 20 process. This notice: Tells leaseholders what works are planned Explains why the works are needed Opens a 30 day window for written observations. Allows leaseholders to nominate contractors
Use this side of the card to provide more information about a topic. Focus on one concept. Make learning and communication more efficient.
Use this side of the card to provide more information about a topic. Focus on one concept. Make learning and communication more efficient.
Use this side of the card to provide more information about a topic. Focus on one concept. Make learning and communication more efficient.
Stage 1.
Stage 2.
Stage 3.
Title
Title
Title
Notice of Intention
Statement of Estimates
Notice of Reasons
Write a brief description here
Write a brief description here
Write a brief description here
Typical Capital Expenditure Plan Segment
2032
2034
2025
Internal Decorations B.
External Decorations B.
External Decorations A.
£55,000
£130,000
£120,000
Lift Refurbishment
Internal Decorations A.
£50,000
£80,000
2027
2033
Module 4 - Lesson 3: Complete
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External Decorations B.
SECOND CYCLE
Cyclical works are just that - cyclical. To keep the building in good condition it's critical that the next external decoration project is being financially planned-for even as the previous cycle comes to an end. The second cycle of external decorations will require scaffolding on the building once again. New high-level repair defects will be indentified and fixed.
External Redecorations A.
FIRST CYLCE
Important for keeping the building water-tight, the external decorations (Ex-Decs) are a vital project. Typiclly no more than every 7 years, clents will need to scaffold up on the exterior of the building to do this work. Some leases stipulate precise cycles. Any exterior ironwork and timberwork needs to be treated and painted. But scaffolding is huge part of the cost. For this reason, it's wise to also build-in provisional sums for high level roof, guttering and masonry reapirs at the same time.
INTRODCUING
Major Works
Major works are usually defined as any works costsing one single leaseholder more than £250. Even though this might not, in practice, mean a very substantial project for some buildings, it is seen as the benchmark because that is the threshold for when legal consultation is required. More on that to follow. In many cases, the £250 threshold will mean the work is a substantial project. Common block management major works projects include:
- External redecorations
- Internal redecorations
- Roof repalcement
- Lift replacement
Internal Decorations A.
FIRST CYCLE
To keep the internal communal areas looking fresh it's common for the internal decorations to be carried out every 5-7 years. As with external decorations, this project is often about more than just asthetics. It is often useful for a building surveyor to be involved with these projects too and there is an opportunity for any important repairs to be carried out under the same spec. In recent years, fire safety upgrades have commonly been grouped together with internal redecorations. Grouping projects together in this way can often reduce costs.
INTRODCUING
Section 20
The Landlord & Tenant Act 1985 introduced new rules around communciation with leasehodlers in repsect of service charge costs. Section 20 of the act requried that landlords and RMCs engage in formal consutlation. The two main categories of cost affected are below: 1. Qualifying Works: More commonly known as 'building works' This might include carrying out external redecorations or fixing big maintenance problems. Under the law, landlords must consult leaseholders on all expenditure which exceeds £250 per leaseholder. Failiure to do so means that the landlord is restricted in how much he can recover for the relevant project at £250 per leaseholder. 2. Qualifying Long Term Agreements: This relates to any contracts exceeding 1 year which cost leaseholders more than £100 each. This might be for a professional service or maintenance work - the type of contract doesn't matter. It's the cost and length that is relevant. In these cases, again, the landlord may only recover £100 per leaseholder if he fails to consult. Watch the video in the next section to get a deeper understanding...
Internal Decorations B.
SECOND CYCLE
The cycle comes back around - this time for the internal decorations. In this case, the building surveyor has planned the internal decorations to take palce shortly after the lift refurbishment project. Timing like this is vital. Consider if this was done the other way round. Carrying out an expensive decoration of the internal hallways only to cause drilling and heavy works damage to those common parts one year later would be a waste of money.
Lift Reurbishment
MECHANICAL & ENGINEERING PROJECT
It's not just decoration cycles that need to be considered. In buildings with lots of communal equipment a plan needs to be in place for any repair or replacement projects. A good Capital Expenditure Plan will contain provisional sums for ensuring all M&E (Mechanical & Engineering) assets are looked after. This includes lifts, which require cyclical refurbishment, and eventual replacement. You should (where possible) collect reserves over time to be able to fund these works when due.
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Transcript
Module 4. Lesson 3 - Major Works & Section 20
Please switch to FULL SCREEN (bottom right of window)
Start
Major Works & Section 20
Major Works & Section 20: Going Deeper
Recap on Notices: Qualifying Works
Notice of Reasons Issued within 21 days of awarding the contract Only needed if lowest-priced contractor or nominated contractor is not used. States reasons for choosing contractor Summarises leaseholder observations and landlord’s responses Provides inspection access to full documents
Statement of Estimates Landlord obtains at least two estimates and shows costs At least one unconnected contractor included Summary of earlier leaseholder observations displayed - with responses Invites inspection of relevant documents 30-day deadline for further written observations
Notice of Intention This is the first formal step in the Section 20 process. This notice: Tells leaseholders what works are planned Explains why the works are needed Opens a 30 day window for written observations. Allows leaseholders to nominate contractors
Use this side of the card to provide more information about a topic. Focus on one concept. Make learning and communication more efficient.
Use this side of the card to provide more information about a topic. Focus on one concept. Make learning and communication more efficient.
Use this side of the card to provide more information about a topic. Focus on one concept. Make learning and communication more efficient.
Stage 1.
Stage 2.
Stage 3.
Title
Title
Title
Notice of Intention
Statement of Estimates
Notice of Reasons
Write a brief description here
Write a brief description here
Write a brief description here
Typical Capital Expenditure Plan Segment
2032
2034
2025
Internal Decorations B.
External Decorations B.
External Decorations A.
£55,000
£130,000
£120,000
Lift Refurbishment
Internal Decorations A.
£50,000
£80,000
2027
2033
Module 4 - Lesson 3: Complete
End of Activity
Did you access all the content? Make sure you've read all the info
Minimise window and hit 'Complete' Lesson' (above) if ready to move on...
Back
External Decorations B.
SECOND CYCLE
Cyclical works are just that - cyclical. To keep the building in good condition it's critical that the next external decoration project is being financially planned-for even as the previous cycle comes to an end. The second cycle of external decorations will require scaffolding on the building once again. New high-level repair defects will be indentified and fixed.
External Redecorations A.
FIRST CYLCE
Important for keeping the building water-tight, the external decorations (Ex-Decs) are a vital project. Typiclly no more than every 7 years, clents will need to scaffold up on the exterior of the building to do this work. Some leases stipulate precise cycles. Any exterior ironwork and timberwork needs to be treated and painted. But scaffolding is huge part of the cost. For this reason, it's wise to also build-in provisional sums for high level roof, guttering and masonry reapirs at the same time.
INTRODCUING
Major Works
Major works are usually defined as any works costsing one single leaseholder more than £250. Even though this might not, in practice, mean a very substantial project for some buildings, it is seen as the benchmark because that is the threshold for when legal consultation is required. More on that to follow. In many cases, the £250 threshold will mean the work is a substantial project. Common block management major works projects include:
Internal Decorations A.
FIRST CYCLE
To keep the internal communal areas looking fresh it's common for the internal decorations to be carried out every 5-7 years. As with external decorations, this project is often about more than just asthetics. It is often useful for a building surveyor to be involved with these projects too and there is an opportunity for any important repairs to be carried out under the same spec. In recent years, fire safety upgrades have commonly been grouped together with internal redecorations. Grouping projects together in this way can often reduce costs.
INTRODCUING
Section 20
The Landlord & Tenant Act 1985 introduced new rules around communciation with leasehodlers in repsect of service charge costs. Section 20 of the act requried that landlords and RMCs engage in formal consutlation. The two main categories of cost affected are below: 1. Qualifying Works: More commonly known as 'building works' This might include carrying out external redecorations or fixing big maintenance problems. Under the law, landlords must consult leaseholders on all expenditure which exceeds £250 per leaseholder. Failiure to do so means that the landlord is restricted in how much he can recover for the relevant project at £250 per leaseholder. 2. Qualifying Long Term Agreements: This relates to any contracts exceeding 1 year which cost leaseholders more than £100 each. This might be for a professional service or maintenance work - the type of contract doesn't matter. It's the cost and length that is relevant. In these cases, again, the landlord may only recover £100 per leaseholder if he fails to consult. Watch the video in the next section to get a deeper understanding...
Internal Decorations B.
SECOND CYCLE
The cycle comes back around - this time for the internal decorations. In this case, the building surveyor has planned the internal decorations to take palce shortly after the lift refurbishment project. Timing like this is vital. Consider if this was done the other way round. Carrying out an expensive decoration of the internal hallways only to cause drilling and heavy works damage to those common parts one year later would be a waste of money.
Lift Reurbishment
MECHANICAL & ENGINEERING PROJECT
It's not just decoration cycles that need to be considered. In buildings with lots of communal equipment a plan needs to be in place for any repair or replacement projects. A good Capital Expenditure Plan will contain provisional sums for ensuring all M&E (Mechanical & Engineering) assets are looked after. This includes lifts, which require cyclical refurbishment, and eventual replacement. You should (where possible) collect reserves over time to be able to fund these works when due.