Caroline Lee of Brady Solicitors

Major works – a demanding process?

Caroline Lee of Brady Solicitors

How well do you know your lease? Do you know if you can make a demand to leaseholders in advance of undertaking major works?

An incorrect demand or a demand made not in accordance with the terms of your lease could leave you – and the major works project – in a sticky situation if a leaseholder decides not to pay.

This tends to be a busy time of year for property managers as many of you will be working on next year’s service charge budget and agreeing the works that need to be carried out. In this short blog post Brady Solicitors’ Caroline Lee reminds you of the need to make major works demands in accordance with your lease and reinforces the value of planning ahead.

It is a common misunderstanding by property managers that completing the section 20 consultation process allows you to issue a demand to the leaseholder in advance of the works being undertaken. This may not be entirely true; you can only raise a demand in advance of the works being undertaken if the lease allows for it.

In an ideal situation, your lease will contain provision for a reserve fund and you will have communicated to your leaseholders a rolling 5 to 10 year programme of works. This allows you to make demands in advance of major works projects, to build up a (reasonable) reserve fund and to ensure that the block is well maintained and leaseholders are happy.

Without the relevant clauses in your lease you may not be able to make a major works demand in advance of works starting – even if you have been through the section 20 consultation process.

So what can you do if your lease doesn’t have a reserve fund?

The first step is to apply to the First-tier Tribunal (Property Chamber) to vary the lease. The FTT generally welcomes such applications, viewing reserve funds as prudent management.

In the meantime, if you have major works starting in the next financial year then you need to make the demand in line with the service charge clause in your lease; following the s.20 procedures.

We touched on good practice above, namely the rolling 5 to 10 year schedule of works. This is a very useful approach to take once your lease does contain provision for a reserve fund, as it allows you to make accurate major works demands. Clearly there will be the odd unplanned project or repair that will need tackling, but some forward thinking will help both you and your leaseholders to plan future expenditure.

Find out more

If you are unsure of the provisions in your lease or how it affects your major works demands, please do get in touch and we’d be pleased to help you. Contact Caroline by email or on 0115 985 3450.

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