In a desire to get on with major works projects delayed due to COVID-19, RMCs may be tempted to neglect the Section 20 consultation requirements. Clear Building Management explain why S20 remains essential and offer some tips on how to manage the consultation process in a virtual world.
As we begin to emerge from lockdown, many of the major works programmes put on hold in early Spring will re-start. Whilst the C-19 pandemic may have changed many things, leasehold law and the obligation to consult before embarking on major works remain the same, if your RMC is not to end up out of pocket.
By way of a quick reminder: for any major works project that is going to cost any one individual leaseholder more than £250, you have to carry out a consultation process under the S20 rules. Without this consultation, you can find yourselves in a position where you’ve carried out the works yet can’t recover the costs from your leaseholders.
How Do We Carry Out a Section 20 Major Works Consultation?
S20 consultations have to follow a strict process under leasehold law. It’s not enough to simply get everyone together and discuss the plans. There are three steps you need to follow in a major works consultation:
- Serve a Notice of Intention: describing the works, explaining why they are necessary, and specifying when and where observations and nominations for contractors should be sent. Leaseholders have 30 days to respond.
- Serve a Notice of Estimates: with two or more cost estimates for the work. Any estimate provided by a nominee must be included. Leaseholders again have 30 days to respond.
- Serve a Notice of Award of Contract: It must be served within 21 days and give the reasons for awarding the contract. The S20 regulations state that you only need to serve this if the chosen contractor was not the cheapest, however it is good practice to send the notice anyway should you ever face a future challenge.
Alongside these legal notices, it’s important (we would say essential!) to engage in open dialogue with your leaseholders to bring them onboard and explain why the expenditure is necessary.
Face-to-Face Leaseholder Meetings Are Clearly Out At The Moment So You Will Need To Be Creative.
Online meeting tools such as zoom, Microsoft teams, and google hangouts can do a good job, and Q&A facilities can enable a real-time debate and virtual ‘show of hands’. There are also free online voting tools such as mentimeter that can allow leaseholders to have their say (and without being shouted down!).
A final point with regard to major works is to ensure that your contractors are on-side and understand your approach. If you have a contractors’ charter, consider updating it to reflect social distancing and COVID-safe procedures.
The S20 consultation process is not that onerous but it can’t be ignored – and it is good practice too. The whole point of the consultation is to give leaseholders the chance to have their say on expenditure that affects their development. It is also a powerful opportunity to win the hearts and minds of leaseholders who may be reluctant to contribute, particularly when spending power has been hit by recent events.
By working with a specialist block management company such as Clear, RMC directors can hand over the consultation process and ensure it is done correctly, so leaseholders understand the plans and are willing and able to pay for the major works activities that affect their development.
Developments managed by Clear benefit from our major works experience and detailed section 20 knowledge. If your block could be improved by a more knowledgeable and leaseholder-friendly approach to major works, please do get in touch.
