Major Capital Works
Charging Policy for
Residential
Leaseholders
February 2011
Salford City Council
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Introduction:
Salford City Council has a statutory responsibility to keep the structure and
communal areas of residential buildings in it’s ownership in a good and substantial
repair and condition.
The Landlord and Tenant Act 1985, allows the landlord of the property to recharge
the leaseholder for their share of any major capital works that are carried out as part
of this duty. Although the legislation allows for this, what can be charged for is
determined by the detailed contents of the lease. Leaseholders pay an annual
service charge to cover the costs of day to day repairs. This policy sets out the
circumstances where a charge will apply and the basis for payment.
This policy sets out:
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what is being charged for;
recharging approach and different payment options open to leaseholders;
assistance for those who are unable to access resources to meet the costs on
their own;
consultation processes; and
identifies appeals and challenge routes for leaseholders.
This will be implemented by the appointed managing agent in an appropriate manner
and in compliance with the relevant legislation and Private Sector Renewal
Assistance Policy. Supplementary documents to support this are attached in the
annex of the policy.
Principles:
In developing and delivering this policy Salford City Council (landlord) and its
managing agent(s) will act to ensure that:
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We deliver our duties in a cost effective, efficient and economic manner;
Apply a fair process for calculating and charging leaseholders for costs in
accordance with the lease arising from major maintenance and repairs works;
Apply a fair process for recovering charges so those who are able to pay do
so, whilst those who require support and assistance gain access to this; and
Consult with and provide information to leaseholders in a transparent manner
that complies with legislation to ensure that they are fully aware of major
maintenance and repair works and how to engage with the process.
What can be Recharged for:
This policy covers major capital works which are substantial and significant works
that will ensure that the Development is in a good and substantial repair and
condition. It does not cover day to day maintenance and costs.
The Landlord and Tenant Act 1985 provides the basis for what can be charged for,
but what each leaseholder has agreed to be charged for will be determined by the
detailed content of their lease. The rechargeable major capital works will primarily
not relate to the interior of the leaseholder’s property. Rechargeable work will relate
to the structure that accommodates the leaseholder property and the grounds – this
is known as the Development. Items which serve the Development such as utilities
and telecommunications are also included as rechargeable.
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In discharging its duty through major capital works the Council will consider modern
preventative and environmentally friendly, health (removal of previously accepted
building material such as Asbestos) and design standards. Although the original
Developments were built to the standards of the day, the major capital works need to
be compliant with the modern day equivalent standards.
The list below shows an example of the likely rechargeable works, but more detail
will be provided by each lease:
Communally used areas of the Development including:
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forecourts and courtyards;
fences; and
halls and staircases, lifts (if any), landings, steps, passages.
The main structure of the Development including:
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foundations, (including replacement damp proof courses);
exterior walls, (including cladding);
dividing walls and structures between properties, common halls, staircases,
landings, steps and passages and all electrical and other fittings and windows
in the Development;
all doors in the Development (apart from doors that give access to individual
properties); and
all roofs, their support and chimneys and every part of the Development
above the level of the top-floor ceilings.
Utilities:
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anything that supports the supply of water, heating, power, waste water and
drainage e.g. cisterns tanks sewers drains gutters pipes wires cables ducts
and conduits in the Development (apart from those that are in the leaseholder
property).
Telecommunication:
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any wireless and television masts and aerials cables and wires erected on the
Development or in or over the roof or roofs and available for use with the
properties.
Charging for Major Capital Works:
The managing agent will calculate the costs which an individual leaseholder is
required to pay for major works by totalling the actual costs of the work to the building
and dividing this by the number of properties in the building. These costs include
materials, labour, fees and administration of the major capital works programme. If
leaseholders wish to secure and pay for additional works inside their home (which is
the leaseholders responsibility to repair and maintain) they are entitled to discuss this
with their managing agent. Please see “Decent Homes and Other Internal
Improvement Work” section below.
Leaseholders will not be charged more than 10% above the final estimate for the
works given to them in advance of the work starting. If, once completed, the cost of
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the works is less than the estimate, then leaseholders will only be charged their
share of the actual costs.
Consultation and Engagement:
Leaseholders will be advised and consulted prior to commencement of the planned
major capital works for their Development. The exact detail of the consultation and
engagement process will vary depending upon the major works procurement
process. These procurement processes are governed by separate government
legislation and policy. However, Salford City Council is committed to ensure that all
the legal requirements are fulfilled and that leaseholders have sufficient information
to engage with the process and make informed decisions and choices.
Leaseholders cannot refuse permission for the works to go ahead, because Salford
City Council has responsibility to repair and maintain the building under the terms of
the lease agreement. Leaseholders do have the right to challenge the charges and
the reasonableness of the work via the Leasehold Valuation Tribunal (LVT).
Paying for Major Capital Works:
Leaseholders will have up to 21 days after completion and billing of the works to pay.
There are a number of options open to leaseholders including: using their existing
savings, seeking private loans arrangements or any other subsequent arrangements
that might be established (like a contributory sinking fund). There are also public
financial support options including statutory and discretionary loans, discretionary
cap for eligible leaseholders and other support under the Private Sector Renewal
Assistance Policy. To support leaseholders to identify the most appropriate option
they are advised to seek advice from an Independent Financial Advisor (IFA).
Alternatively at the time of writing Salford City Council has an agreement with Salford
Money Line (SML), to provide financial advice on City Council approved financial
products.
Decent Homes and Other Internal Improvement Work:
Leaseholders have the opportunity to opt into improvement works, such as the
Decent Homes Programme. This work targeted at affordable housing relates to
internal improvement works such as replacing kitchens or bathrooms. Please note
that this is additional non mandatory maintenance / repairs work. The costs of this
work must be repaid over a period agreed with the managing agent. If the
leaseholder wishes to explore this improvement option, then the main route is to
finance this privately.
Challenges, Appeals and Complaints:
Early and continuous engagement between the leaseholder and managing agent
throughout the whole major capital works process should ensure a quality service
and delivery of the major capital works. As indicated earlier, engagement will be
determined by the procurement process, but it is expected to include, but not
exclusively:
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appropriate and time considerate consultation with the leaseholders
individually prior to the works carried out;
wider consultation carried out with all residents in the block or estate before
the works start; and
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contact details provided to allow leaseholders to channel any issues arising
whilst the works are being carried out.
However, in the unlikely event that a leaseholder feels that the situation has not been
raised and resolved in an appropriate manner there are existing challenges, appeals
and complaints processes.
For appeals, complaints and challenges about the major capital works a leaseholder
can:
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make a formal complaint to the managing agent who will investigate in line
with their policy on customer feedback; and / or
apply to the appropriate leaseholder body Leasehold Valuation Tribunal for a
determination on issues relating to the reasonableness of the works and / or
costs.
If the leaseholder chooses to apply to the Leasehold Valuation Tribunal, in most
cases they will have to pay an administration fee, but this is assessed on a case by
case basis. The decision of the Leasehold Valuation Tribunal must be followed by
the managing agent and the leaseholder but if either of them are unhappy with the
decision then they can appeal to the Lands Tribunal.
Challenges, appeals and complaints about the managing agent should be directed
to:
Sustainable Regeneration Complaints Officer
Business Management Team
Phase II
Civic Centre
Chorley Road
Swinton
M27 5BY
Tel: 0161 922 8763
Fax:0161 793 2477
E-mail: complaints.housing@salford.gov.uk
The council does not accept challenges about policies that it has developed and that
have been approved through the appropriate process.
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