Major works and long term contracts
As a leaseholder, you have to pay a service charge, which covers your share of the costs of maintaining the communal areas and the exterior of the building. Apart from that, we occasionally need to carry out works which cost a considerable sum of money.
Examples of works that could require consultation:
- Cyclical maintenance and decoration works - for example: repainting communal areas, replacing worn carpets, and installing new ceiling tiles
- Window frame replacement
- Works that require scaffolding - scaffolding is expensive to hire and erect
- Roof repairs
- Installing new communal equipment such as a lift or fire detention system
Whenever we plan major works or are planning to enter a long-term contract, we need to carry out a legal consultation process called Section 20. We will need to do this whenever:
- the planned works will cost at least one leaseholder in the development more than £250
- we wish to enter into a long-term agreement, which will cost at least one leaseholder in development over £100 a year
Examples of contracts that could trigger Section 20 consultation include:
- lift servicing and maintenance
- annual fire risk assessments of the communal areas
- fire alarm maintenance
The Section 20 consultation is there to make sure you are involved in the process and have the chance to ask us questions and make comments. In some instances, you can nominate your own contractor to carry out the works or take on the contract.
Exceptions to the Section 20 consultation process
If the works/contract are urgent and there is no time to wait for the full Section 20 consultation to be carried out before commencing, Origin Housing may not be able to follow the Section 20 process.
Paying for the works - sinking fund
In some cases, the cost of work and long-term agreements are charged back to you through your service charge. To cover the cost of major works, leaseholders in those cases also pay towards a 'sinking fund' as a part of their service charge. This is a fund that builds over time to deflect the costs of major works.
If the sinking fund is not sufficient to cover the cost of work, we will charge you the remainder of the costs through your service charge.