Major works can be a major headache, with frustrations for landlords, managing agents and leaseholders alike. In the worst cases, major works are expensive, disruptive and – perhaps worst of all – unpredictable. All of these problems can be mitigated, however. And the last one is the key to the others.
If major works are undertaken only reactively when problems arise, costs can spiral out of control and works can go on longer than anticipated, leading to conflict between leaseholders and managing agents. On the other hand, if the managing agent has in place a planned maintenance programme that incorporates major works, costs can be minimised and works can be scheduled for maximum efficiency and minimum disruption. In the right hands, those works will then be carried out on schedule and on budget, and – crucially – with full buy-in from leaseholders, and any conflicts quickly nipped in the bud.
What counts as major works?
With the right expert help, then, major works needn’t be daunting. But what exactly is included under the label of ‘major works’? They can include external and internal repairs, refurbishment, renewals and whatever redecorations are needed to maintain a building’s life and enhance residents’ enjoyment of it. The legal definition of major works is important because it triggers the so-called Section 20 process. This refers to Section 20 of the Landlord and Tenant Act 1985, which makes it a legislative requirement that leaseholders are consulted prior to any works being instructed when any one’s leaseholder’s share exceeds £250.
In practical terms, that means works involving roof repair and replacement, window repairs, brick and concrete repairs, repointing and external redecorations. Internal works to the common areas typically include wall and ceiling repairs, lighting upgrades and fire safety upgrades. Usually, there are two stages to the Section 20 process before such works can begin. The Stage 1 notice gives leaseholders the chance to make observations on the proposed works and potentially nominate contractors. The Stage 2 notice will give leaseholders the estimated costs from the tenders received. Depending on how Stages 1 and 2 go, there can also be a Stage 3, in which the landlord explains their choice of contractor.
What planned maintenance involve?
So far, so simple. But, of course, the devil is in the detail. The key to success is to have plans in place long before major works actually take place. And that means starting with financial plans. Best practice is for landlords or managing agents to have a comprehensive Capex plan in place that’s fully aligned with their planned maintenance programme. This will enable them to set the right service charge to cover anticipated costs. Where the lease permits, it should also include a reserve fund to cover any unanticipated costs.
Planning proactively, with regular inspections and surveys, is the best way to avoid unpleasant surprises. It also enables managing agents to schedule works more efficiently. For example, if scaffolding is required for relatively urgent works, it’s a good idea to bring forward any less urgent works that require scaffolding too, saving on unnecessary cost and disruption further down the line.
A proactive plan is also a great asset when it comes to the Section 20 process. It means landlords and managing agents can show leaseholders that their plans have been carefully considered and make long-term financial sense. This is essential to getting leaseholders’ buy-in. They are also far more likely to put up with the temporary inconvenience of scaffolding or associated noise if they understand the benefits.
Where do surveyors come in?
Building surveyors should obviously be involved in undertaking the inspections and surveys that inform a landlord’s planned maintenance programme. But they can also do much more. For example, at Earl Kendrick, we work collaboratively with our clients to produce scoping documents detailing recommended repair and improvement works. This includes Capex planning: calculating projected costs and ensuring sufficient funds are in place for the future upkeep of their properties.
We are also closely involved in the Section 20 process, and often attend resident sessions to help explain what’s proposed and why. These sessions are often invaluable, as allowing the residents to meet with our team helps build a collaborative approach to the whole process. Sometimes it’s about explaining technical details, sometimes about sharing the bigger picture about why the works matter. And sometimes surveyors are called on to bring more diplomatic skills to bear on managing and resolving any tensions!
Ultimately, major works are not just about repairing and maintaining buildings, but about looking after people’s homes. That means a holistic approach is needed to ensure everyone’s interests are taken into account. Undertaking major works involves an emotional investment as well as a financial one, and that’s why it can be so stressful. With the right planning and the right expert help, however, both costs and stress can be kept to a minimum.
