Contract admin fees under section 20 major works

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    Contract admin fees under section 20 major works

    What is the average percentage for a contract administrator for major works??? Help I’m sure we are being ripped off.

    What does the contract with the managing agent state?


      And does the lease make any provision for such charges or prohibit them.

      If the charge includes the S20 process maybe 5% to 8% might be reasonable. They can't triple charge this, by having a surveyor administering as well. If a surveyor is involved that should come out of the amount.

      But it means actually administering and taking the legal liability if things go wrong through fault of the administration -- it is not a free bonus/penalty.


        The lease says ‘fair and reasonable’. It’s 1% for the managing agent and 12.5 % for the contract administrator plus vat. They are estimated 50k for the works so a huge huge amount of money for us leaseholders. It’s predominantly to repair a Victorian front bay window which benefits one leaseholder only who happens to also be the freeholder of the house.


          13.5% sounds very much on the high side and not reasonable. But it depends on the works -- if there are dozens of small jobs and a lot of work -- versus "Replace the roof"


            When that administration becomes important is where the exact amount of work is not obvious up front. It will pay for having a detailed specification of the work, and it will be typically associated with the use of something like the JCT Minor Works contract (leasehold flat "major works" are minor by building trade standards). With such a contract, the contractor is not able to set whatever price they like for any contract variations (which is the main reason defence contracts overrun badly); they surveyor acts as an arbitrator to set the fair price for the amount of extra work actually needed.

            Many "fixed price" contracts actually have parts that are not fixed, because it is not possible to know the details in advance, and the surveyor is responsible for agreeing those as work develops. The alternative is that the contractor has to over-price to cover their risks.

            The surveyor is probably also taking on responsibilities for health an safety, under the Construction, Design, and Management Regulations. Only if you are real domestic client does the contractor take these on. BtL landlords and flat managers are considered businesses and expected to either know about building work health and safety, or buy in the services of someone who does.

            Especially in the early days of privatisation of health service, a lot of authorities got caught out by having inadequately detailed specifications for the work and finding they had to pay through the nose for contract variations, or didn't get the service they expected.


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