Section 20 costs

[lampshade]

Having been issued with a section20 that requires a lot of expensive works to common area doors and the like, I am wondering what the situation is regarding an increase in quotations already given.
Materials prices are rising fast and we have no idea when the works will start so given that we have been given a cost for the section 20, can leaseholders be charged for any increased costs or would that be down to the Managing agents who of course have negotiated the prices?

[eagle2]

It depends on the wording of the s20 notice and the quotes but quotes should not normally be amended although they may be conditional eg upon acceptance within a certain time frame.

The managing agents will not be responsible for any increased costs, they are agents and nothing more.

[lampshade]

Asked the MA if they would contract the works of the section 20 to be done regardless of full funds received from all leaseholders, answer is NO. Work will only be contracted after 100% of funds currently requested have been received...which they have not (this is now 18months since the FRA that started all this was done.)
I have asked them how they intend to get any arrears paid to them, no answer yet.....this is crazy as they now have 80% of all funds and we have have no idea when anything will be done, by which time I am sure that there will be another quote as costs are rising all of the time

[scot22]

MA is right. It is illegal to contract for work without having funds in place to pay.

[eagle2]

There are several conflicting issues, scot22 is correct, the RICS code 9.1 requires the agent to "have sufficient funds prior to instructing a contractor, or that the method of payment has been agreed between all parties prior to works commencing".

It also states that the agent "should have regard to the lease in determining the respective reparing obligations of landlord and leaseholder" and 7.3 "failure to provide such services may constitute a breach of the landlord's obkigations" So a leaseholder may well have a claim against the landlord if repairs are not carried out especially when he/she has provided funds for that purpose.

The service charges must be reasonable and a leaseholder may well claim that charges are unreasonable if the cost of works increases due to any delay after he/she has paid a contribution.

Practically, the agent should be proactive, it should take steps to collect the other contributions, .it should consider whether monies may be borrowed under the terms of the lease and moving forward it should consider an amendment to the lease to create a reserve fund.

[Gordon999]

The managing agent should show you 3 competitive quotations for the work..

[lampshade]

eagle2,

There has already been a revised quote, considering the work identified under the FRA is now over a year old. In addition extra work has been added to the original section 20. (Cross corridor Fire doors to all be replaced, which was not originally mentioned on he FRA), in addition costs prices have increased sharply over that period.
What can a MA do to ensure all payments are made, for example, if a leaseholder does not have the money and offers to pay a monthly sum over 12 months?? Does the work get held up for that period? what happens to costs, what about Insurance on a building where there are outstanding repairs deemed necessary by a FRA?

Reserve fund........Exactly, also my beef on this.
As I understand it there was a considerable reserve fund 15 years ago for these flats, which was all used up when new PVC windows were installed. (many £10s thousands) and that would have been fair enough. At around that time the building was bought by a new Freeholder, who for whatever reason stopped the collection of a reserve fund. Also at the same time a residents association that existed was disbandoned as leaseholders sold one by one, in their place came absent landlords, apparently with little regard for the buildings. So to that end normal wear and tear items including Fire safety has been largely ignored, until recent events has suddenly galvanised the Freeholder and their new MA into these works,
Anyone unlucky enough to be holding a lease is now having to pay.
I have asked the MA to provide me with their budget for next year, so the inclusion of a Reserve fund can be considered, but I fear that the extra costs with tis section 20 have not yet been fully realised, and that a reserve fund would be out of the question at the moment...

[lampshade]

The managing agent should show you 3 competitive quotations for the work..

I had already asked why there were only ever 2 companies asked to quote? No reply.
Considering one of the companies asked was My nominated company.......(it would appear will not be getting the job )

[Gordon999]

You can demand to see the quotations, which should be provided under S20 consultations..

[eagle2]

If the MA can collect contributions in instalments, it has a choice of negotiating the payment terms under the contract, borrowing monies if permitted by the lease or the freeholder may need to finance the difference, The freeholder is not permitted to postpone urgent works.

[lampshade]

You can demand to see the quotations, which should be provided under S20 consultations..

Hi.....when I asked to see the quotations I was very specific in asking to see (on letter headed paper) the 2 quotes, giving full details of materials (doors ) to be used. That was not provided, instead I was sent a 78 page spreadsheet, done by the MA which made very little sense at all.
For example, there was no indication as to the type of new doors that would be fitted ( clearly that should have been known, it mentions similar to), that of course can give a very different cost.
The company that I had nominated detailed the exact doors they would use, giving clarity of both design and cost (at the time).but this information was not made available to everyone, only those that asked the questions.
For others it was a `fait a complis`, just a simple one company is cheaper than the other and so recommended,despite the fact that the cheaper company was quoting for doors that would then need painting !!!! Other company had quoted veneered doors !!!
All sounds to me as if the recommended company had been decided upon in advance, my nomination simply provided a base line.

[lampshade]

If the MA can collect contributions in instalments, it has a choice of negotiating the payment terms under the contract, borrowing monies if permitted by the lease or the freeholder may need to finance the difference, The freeholder is not permitted to postpone urgent works.

I will put all of those points to the MA. To me this is simply not acceptable. Either this work is needed or it is not. Now 16 months since the last FRA was done, and of course there will be another one needed in 2022. Again I have already asked about warranty of any work done on this section 20, because the current one requires some work deemed necessary to fix badly done work from the previous FRA .
This is now driving some landlords to sell up (if they can)

[lampshade]

Update on situation............nothing at all. MA does not even answer emails now........saying offices are short staff due to Covid (same as was in December)...No contract issued, and in fact I found out that one new leaseholder has not even received an invoice for this new work. In which case the MA will never have 100% funds to issue a contract.(and they are not chasing one)....in the meantime the work demanded by the FRA of 18 months ago still has not been done. Is our insurance still vaild???

[eagle2]

I suggest you ask the MA to reduce its charges as it is not providing a full service, that should produce a response. Also suggest that you say that you refuse to pay any increase in the cost due to their delay in starting the works.

[lampshade]

Thnks. One of the biggest issues in my mind is that we are not party to the management contract between the FH and this new company. The Freeholder too the Managing away from the company that had done it since the flats were new and gave it, to themselves (120 miles away) they were pretty useless, eg....works required by FRA in 2011, never done for example, gardens that ended up as wasteland with 2mt high weeds (in the centre of a town).
I would almost wonder if anyone that has bought one of these flats since 2011 would have a case for paying nothing regarding this latest FRA as all of the work now required is the same as it was back in 2011???
Surely it should have been illegal to sell a property that did not comply with Fire regulations??? Some of this work now required is to remedy ORIGINAL building work of 30 years ago. And I do not see any change in the laws since then that deem it necessary now but not back then