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I am the secretary for the limited management company that…

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I am the secretary for...
I am the secretary for the limited management company that runs a group of 9 communal flats. We are currently exploring doing some major refurbishment works on the property and I am currently submitting a Section 20. I would like to speak with someone to ensure I am completing everything correctly and confirm my understanding of the process. If you could let me know if this is something you can support with and cost for your services.
Submitted: 4 months ago.Category: UK Property Law
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Answered in 6 hours by:
10/16/2017
Solicitor: Naveed Khan,
 replied 4 months ago
Naveed Khan
Category: UK Property Law
Satisfied Customers: 58
Experience: Attorney - Freelancer at ELANCE
Verified
Let me guide you with the process. Please note that Section 20 of the Landlord & Tenant Act 1985 (as amended by the Commonhold & Leasehold Reform Act 2002) sets out the three-stage consultation procedure with which to follow when carrying out qualifying works to your building where the contribution from any one lessee exceeds £250, or a qualifying long-term agreement where the contribution from any one lessee exceeds £100 in one financial year.Stage One
* For qualifying works, under Section 20 you would be required to serve a “Notice of Intention to Carry Out Works” upon all lessees. The Notice must generally describe the proposed works, state the reasons for considering the proposed works, and invite leaseholders to make written observations within 30 days. The correspondence address for observations should be stated within the Notice as well. The importance of the Notice of Intention is that it offers lessees with the opportunity to provide the name of a contractor from whom the Landlord/RMC should try to obtain an estimate for the proposed works.Stage 2
* At the expiration of the 30 day consultation period, at least two estimates should be obtained: one of these estimates must be from a person completely independent of the Landlord/RMC. If nominations were made within the consultation period, then estimates should have been obtained from at least one of these nominations. The Landlord/RMC must then provide a “Statement of Estimates” which sets out the details of estimates that have been obtained and a summary of observations received within the consultation period. Any estimates that have been obtained must be available for inspection by the lessees, including estimates obtained from nominated contractors. A “Notice to Accompany the Statement of Estimates” must also be served in conjunction with the Statement of Estimates, which sets out the hours and place where details of the estimates may be inspected, inviting lessees to make written observations on the estimates within 30 days, specifying the address to which those observations should be sent.Stage 3
* If, at the expiration of the consultation period, the chosen contractor did not provide the lowest estimate, then a “Notice of Reasons” must be served upon all lessees. This essentially states the Landlord’s/RMC’s reasons for awarding the contract. It is worth noting that if a nominee is chosen to carry out the works, and they didn’t provide the lowest estimate, then although the requirements of Section 20 have been fulfilled, it would be prudent to serve a Notice of Reasons because that estimate could be tested for reasonableness by the Leasehold Valuation Tribunal (LVT) under Section 19 of the 1985 Landlord & Tenant Act.
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Customer reply replied 4 months ago
Thank you for your response. Can you confirm if an individual contractor needs to be used for all works. Currently we are looking to get external windows replaced, internal decoration, carpentry and carpet replaced. Will I need to source a quote under a contractor who can complete all of these works or can individual quotes be sourced per piece of work.In addition where you say I need to source quotes independent of the management company. I am the secretary and my father has a limited company and complete property developments so knows tradesmen that can be used for the work. We will source quotes under this limited company, however if I source other external quotes as a comparison would this be suitable? I have submitted the notice of intention and had no feedback from any tenants of the freehold, so I am left to source quotes for the work alone.Many thanks
Solicitor: Naveed Khan,
 replied 4 months ago

Thank you.

The Court of Appeal has given a list on what factors are to be taken into consideration in identifying a single set of qualifying works. This list is not exhaustive but it includes:

  1. Where the items of work are to be carried out;
  2. Whether they are the subject of the same contract;
  3. Whether they are to be done at more or less the same time or at different times;
  4. Whether the items of work are different in character from, or have no connection with, each other
  5. Whether all the works are the subject of one contract and;
  6. The way in which works are planned and the lessor’s reasons for the way they are implemented are also of relevance.

For the quotation, note that Schedule 1 and part 2 of Schedule 4 of the Regulations require that at least one of the estimates provided must be from a contractor ‘wholly unconnected’ with the landlord.

As for consultation, note that consultation notices must be sent both to individual leaseholders and to any RTA. Landlords must invite leaseholders to nominate possible contractors in respect of consultations that are carried out under Schedule 1 and Schedule 4 (Part 2) of the Regulations.

The Act does not require that contractors nominated by leaseholders or RTAs should be wholly unconnected with the leaseholder or RTA concerned, or that the landlord must be made aware of any relationship that exists. However, where such a relationship is or becomes known to the landlord, that may be a factor taken into account when determining which contractor to use.

Also note, Landlords will have to justify their selection procedures to the Tribunal, if challenged. If they fail to convince the Tribunal in a particular case – for example, if the Tribunal considers the selection criteria to be too restrictive or anti-competitive – there is a risk that the consultation procedure could be adjudicated as invalid.

Where the landlord places a contract with a contractor that neither submitted the lowest estimate nor was nominated by a leaseholder or RTA (if there is one) then he is under a duty to state in writing the reasons for awarding the contract or specify the place and hours where the reasons may be inspected. Failure to follow the correct procedures may be a consideration of a Tribunal in any application before it in connection with the consultation procedures.

So long as you have followed the process you are ok even if no feedback has been received in the pre tender stage.

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Customer reply replied 4 months ago
Hi,
I don't think I am clear on the answer. So as I am not the landlord, it is fine that I am sourcing all the quotes?
Also for the individual contractor piece, I have answer the questions as follows, but not sure where this leaves me with having to complete the work with an individual contractor:Where the items of work are to be carried out; All at the property location
Whether they are the subject of the same contract; We would like to source quotes for individual items of work, windows, decorating, flooring so there would be different contracts and invoices.
Whether they are to be done at more or less the same time or at different times; Similar time, but one completion impacts another.
Whether the items of work are different in character from, or have no connection with, each other - they are all communal areas so there is a link.
Whether all the works are the subject of one contract and;
The way in which works are planned and the lessor’s reasons for the way they are implemented are also of relevance. Phased approach to decoration
Solicitor: Naveed Khan,
 replied 4 months ago
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