If you like Charlie Puth or Cliff Richard you will know that they both sing about how “ we don’t talk anymore…” . Very appropriate words for block management and in particular Section 20 Consultation on qualifying works.
As a block manager acting for multiple clients, it is sometimes easy to feel exasperated about expenses on residential blocks particularly when they exceed the “Section 20” threshold.
For the uninitiated, Section 20 Consultation is the legally prescribed procedure that Landlords (or agents like us acting on their behalf) must follow when carrying out qualifying works. Without delving into the deeper “legalese” surrounding this and speaking generally for the purposes of day to day block management, the process broadly applies to qualifying works of maintenance or repair which would exceed £250 (inclusive of VAT) for any of the leaseholders in a residential block with variable service charges.
You can read about it in some detail here on the Leasehold Advisory Service Website:
I’m a big believer that people should know what they are getting into when they purchase the leasehold interest for a flat or apartment in a residential block, but sadly leaseholders often aren’t well advised on their potential liability for costs in terms of their lease covenants.
The fact that such a regimented approach is required before qualifying works can be undertaken, is evidence of how much conflict there has historically been in this particular area of block management.
In some ways, Section 20 consultation is like a school uniform – it’s great – everyone does the same thing, there is no doubt about the procedure and dare I say Landlords and Agents can be “punished” if they deviate!
The problem though is that because it has become such a formal process, consultation is often regarded as just another hoop to jump through before a managing agent can get on with the work. It is easy to forget that you’re dealing with the common parts of a residential block and the “owners” of the flats. The service charge costs or contributions to major works are often an unwelcome additional burden on them despite their necessity, and as a result it is not uncommon for the relationship between the landlord (or his agent) and the leaseholders to become hostile if communication is sacrificed in the process of following the rules and just making sure formal notices are served correctly. Frankly, so much of what we do as managing agents is about perception.
For example that hallway carpet and paintwork in the lobby of a small block with two or three flats can be an unwelcome expense if you demand leaseholder contributions just after the festive season when most people are recovering from traditional overindulgence and the stark reality of credit card repayments! A managing agent may be acting within the prescribed set of rules, but will typically find they are “herding cats” in this situation.
By the same token, the scenario looks very different if the flat owners understand the necessity of the work, the procedures you need to follow as a competent agent and the positive impact that well maintained common parts will have on the value of their investment. You will often find that the leaseholders will initiate other works and work with you on overcoming obstacles as opposed to being reactive and defensive! You really ought to want to speak to your leaseholders!
If this isn’t your experience, you need to be talking to us for your block management needs.