Leaseholder consultation explained
We have a duty to consult leaseholders on our proposed works prior to entering into an agreement with a contractor. This legal obligation is set out in the Landlord & Tenant Act 1985 and has now been revised in Section 151 of the Commonhold and Leasehold Reform Act 2002 that became effective on 31st October 2003. The reference to Section 20 in the Landlord and Tenant Act 1985 is retained.
These are works carried out to the building or the estate. We must consult with you if the works will cost more than £250 per leaseholder. If consultation is not undertaken the maximum that can be recovered from each leaseholder is £250.
First-tier Tribunal (Property Chamber)
The First-tier Tribunal (FTT) has the authority to determine all Section 20 matters. It can allow a landlord to dispense with consultation requirements if it felt reasonable to do so. For example, the FTT may grant a relaxation of the rules in the case of emergency works or for health and safety reasons. If this was the case we would apply to the FTT for retrospective dispensation as soon as practicable.
What are the three Consultation Notices?
Stage 1: Notice of intent
The notice will:
- Give you a description of the proposed works or services.
- Tell you the reasons we are making the proposals.
- Tell you a time and place where you can inspect the proposals.
- Give you the opportunity to make written observations within 30 days of receipt of the notice.
- The right to nominate a contractor (this only applies to certain works).
At this stage we will not have a detailed specification of the works and will not have asked contractors to tender for the works. We will provide you with estimated costs at Stage 2.
You have the right to make written observations on our proposed works and we must receive these within 30 days of serving you the notice. We will provide you with a written response as soon as practicable and tell you what action we will take if the contract specification is to be amended. You have the right to nominate a contractor for certain works. If you wish to nominate a contractor you should provide their name and address within the 30 days observation period. You do not have the right to nominate a contractor if the work is being carried out under an OJEU notice.
Stage 2: Notice of estimates
This notice will be sent to you after Magna has obtained competitive tenders but before it has agreed to appoint a contractor. The notice will:
- Give you either a summary of at least two of the tenders or in the case of a contractor appointed under European procurement rules a summary of the reasons for proposing a contractor.
- Summarise any observations received at Stage 1(Notice of Intent).
- Inform you of a time and place where you can inspect all the estimates and obtain copies of them.
- Give you the opportunity to make further observations within 30 days of the notice date.
You have the option to make further observations and we shall respond in writing to you, stating our response and any action we agree to take to further amend the works specification if the observations are considered reasonable.
Stage 3: Award of contract
At the end of the second observation period and once we have made any necessary amendments to the work specification, we will formally appoint the selected contractor and enter into a contract with them. At this stage we will provide you with a notice setting out the following:
- The name of the contractor who has been awarded the contract.
- The date we expect that they will start the work.
- If we have not chosen the lowest tender we shall tell you why we have made that decision (we are not obliged to do this if the contractor has been appointed in line with European Union procurement rules).
- A summary of any observations received at Stage 2.