Toby Bowser, Partner at Hamilton Darcey gives RMC/RTM members a run down of how best to approach a Major Works project.
If you are a member or shareholder in an RMC or RTM, it is important to know your responsibilities to repair and maintain your block. Whilst there is the obvious day to day maintenance required, there will periodically be a time when a ‘Major Works’ project will be required. In this article, we will discuss what Major Works are and how to set you up for success.
What Are ‘Major Works’?
Under the Landlord & Tenant Act 1985, Major Works are defined as works for which the costs are recoverable from the tenants under the terms of their lease that are not paid out of the annual service charge. These works can be paid from a reserve fund or as an additional charge.
What is Section 20?
Leaseholders have the right to be consulted when the Landlord intends to do works that exceed a cost contribution of £250.00 per leaseholder. This consultation falls under Section 20 of the Landlord & Tenant Act 1985. This ensures that the leaseholders are able to make observations on the proposed works and nominate contractors to the tender process.
There are three stages to the Section 20 process. The first stage is issuing the notice of intentions to do the works, to the leaseholders. The second stage is a notification of the quotes received, often following a competitive tendering exercise. The third stage is a notification to award the contract, this will also typically set out an outline programme for the works.
Employing a Professional Team for Your Major Works Project
Navigating the Section 20 process can be complex as an understanding of construction and construction contracts is also necessary. Working with a competent professional team pays dividends and this can be with Designers, Contract Administrators or in relation to the CDM Regulation compliance, among other roles.
In our experience, omitting professional fees from a major works project can often be a false economy. Professionals can undertake pre-construction investigations to get to the bottom of issues with a block, at an early stage.
They can then inform the most appropriate course of action, leading to cost certainty for a project. It also means works are correctly specified and not over-engineered. It is often the case that the more information provided to contractors at tender stage, the more competitive and comprehensive the contractor’s tender price would be.
Employing a Contract Administrator as part of your professional team will ensure that a fair tendering process is undertaken. As the administrator of the contract, it is their job to ensure that the correct type of contract is selected and that payments are only made for works actually undertaken.
Conclusion
As a member of an RMC or an RTM you are likely to be required to undertake a Major Works project during your time as a shareholder or member and these are likely to fall within the confines of the Section 20 process. It is important that you follow procedures carefully to ensure that works are undertaken lawfully and without unnecessary costs and delays.
A good professional team by your side can ensure that all processes are correctly followed and that works are appropriate and carried out with quality assurance.
Hamilton Darcey LLP are a Chartered Building Surveying practice with vast experience in the residential sector, ensuring that your Major Works projects are undertaken successfully.
