Major Works Charges
Leaseholders’ ‘Frequently Asked Questions’ about major
Q. What if I object to the
A. Because we will be carrying out the works so
that the Council can meet its landlord obligations and meet
the Waltham Forest Standard, there are some works that we will
have to carry out even if you object to them. We must however,
consider your views and will take them into account as far as we
can. This may mean that we make changes to the scheme such as
changing the type of window we are going to install, but if the
windows in the block need to be replaced, that is what we must
Q. How do I find out about the cost of
A. At least 30 days before the work is due to
start, we will send you a legal notice called a ‘Section 20’
Notice. The Notice will tell you what works we intend to carry out,
the reasons why we think the works are necessary and will give you
an estimate of the cost of the work. By law, we only have to tell
you the estimated costs of works for the whole block, but if we can
give you an estimate for your individual property, we will.
However, the estimate will only be a rough guide based on the
contractors’ Agreed Maximum Price divided by the number of
The Notice will also tell give you contact details for someone you
can write to for more information and will give you 30 days to let
us have your comments. Although we have to take notice of your
comments we do not have to act on them.
Q. How much will I
A. Generally, you will be charged your share of
the cost of works carried out to the block, plus professional fees
and administration charges. Your share is calculated using Gross
Values, which means that instead of sharing the costs out equally
between all flats, smaller flats will attract a smaller share of
the cost and larger flats will attract a larger share. When we
calculate your invoice for the work we will look in detail at the
work and at the terms of your lease to see if there are any works
we can’t charge you for. For example, if the works includes
replacing tenants’ front doors, the cost of that work will not be
included in your bill.
The gross value of a block is the total of the gross values of all
the flats in the block added together. For example, if a block has
six flats in it and each flat has a gross value of £300, the gross
value for the block will be £1800, (6 x £300). Each flat’s
share of work to the block that cost £36,000 would be
Calculated as £300 x £360 = £6,000
If your service charge is different from your neighbour’s charge,
it could be because your flat is larger or smaller, or older or
newer, and so has a higher or lower gross value. (There may
also be differences caused by the age and type of leases.)
Q. Can I choose a contractor to carry out
A. No. The works will be carried out by one of our ‘partners’. Our
partners are contractors who have agreed to carry out a range of
works for us over the next few years. The partnering arrangement
means that we save costs by not having to go out to tender every
time we need to have some work done.
We carried out the tendering, evaluation and ‘Section 20’
consultation for these long term partnering agreements in 2011.
Q. I have already replaced the windows to
my flat. If you are renewing windows in my block of flats will you
remove my new windows?
A. If you have replaced the windows to your flat
you should have received permission from us in writing, allowing
you to carry out the work. We will not normally refuse permission
as long as we consider that the windows you install are
satisfactory. If we are satisfied with the windows you have
installed and they are in good condition we will not replace
If you have replaced windows to your flat without first getting our
permission you can apply for retrospective permission. Again, if we
are satisfied with the windows you have installed we will not
Whether not we replace windows to your flat, you will be charged
your share of the total costs of the window renewals carried out at
your block. This is because the window frames form part of the
structure and ‘reserved parts’ of the block.
Q. You are carrying out work to a number
of blocks on my estate. Are you going to bill me a share of the
A. No. We will calculate your bill taking into account only
works carried out to your block of flats. The exception to this
would be if we carried out any work to areas outside of the blocks
such paving, slip walling or estate lighting. The cost of such
‘estate’ costs would be shared over all of the properties on the
Q. Why are you going to send me an estimated
A. We incur costs as soon as we start planning to
carry out work, because we have to prepare a specification, plans,
consult with residents and so on. It makes good sense for us to try
to recover as much of these costs as we can, as early as
Your lease says that you can be charged reasonably estimated
amounts for work carried out or ‘to be carried out’. So, we can
invoice leaseholders their share of the estimated costs while works
are still being carried out. When the work has been completed we
will calculate the final costs and compare them to the estimated
invoices. If we have charged you too little we will send you an
additional invoice. If we have charged you too much, you will get a
Q. The works are going to cost a lot of money. How do you
expect me to pay my share?
A. We understand that large bills cause great
concern. In order to help leaseholders, we can agree a variety of
payment arrangements. Our ‘Information for leaseholders –ways you
can pay for major works charges’ gives information about the
various methods available.
We send a copy of the payment option
information sheet with all of the major works bills we send
Although large service charge bills will be
worrying, it is worth remembering that flats bought under the Right
to Buy are sold at a discount off the market value. This means that
many flats will have substantial equity (the value of the property
that is not tied to a mortgage).
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It is also worth remembering that the works we carry out will
improve the condition and the value of the property. Because of
these two factors, most banks and building societies are willing to
grant further advances to people who have mortgages with them
(depending on their financial circumstances), in order to meet the
cost of the works.
Where leaseholders are unable to get help from their bank or
building society, we can arrange service charge loans through the
Council. For leaseholders on Income Support or who receive Pension
Credit, we can arrange ‘Interest-only’ loans. ‘Interest-only’ loans
are loans for which only the interest on the loan has to be paid
each month. For leaseholders on Income Support or receiving Pension
Credit, the Benefits Agency or the Pension Service will normally
pay the interest. The loan itself is registered as a charge against
the property and doesn’t have to be repaid to the Council until the
property is eventually sold or transferred to a new
Q. What are ‘preliminaries’?
A. These are mainly set up costs for the scheme and site
administration costs. Some of the things included are the site
set-up costs such as setting up a site office or storage compounds
and other work to ensure the site meets with Health & Safety
and security requirements. Preliminaries may also include the costs
of providing service supplies such as electricity and phones for
any site office.
Q. What are ‘Contingency’ sums’?
A. This is a sum of money that is intended to provide for the
costs of unforeseeable or unanticipated works.
Q. What is a ‘provisional’ sum?
A. A sum of money that is intended to provide for items of work for
which an exact price cannot be obtained or which could be subject
Q. What are fees for?
A. Fees are sums paid for professional services such as
architects, quantity surveyors, Clerks of Works and so on.
Q. What are ‘Design Fees’?
A. Sum or sums paid to cover the contractor’s legal liability
for any elements of work that have been designed by them.
Q. What are the Administration charges’
A. Administration charges are to cover the costs (including
salaries, petrol, stationary, postage) and overheads (including
office heating, lighting, phones) of Ascham Homes’ staff
instructing the contractor, attending feasibility meetings,
preparing and holding consultation meetings, dealing with queries,
sending newsletters, sending legal consultation notices, attending
site meetings and so on.