Are you prepared for unexpected emergency works that may crop up over the winter? Brady Solicitors’ major works expert, Sam Andrews, highlights the importance of forward planning and what you can do as a landlord to recover costs when faced with an emergency situation.
Planning ahead for major works is always sensible, and something that we actively encourage our clients to do, but have you considered the impact that a cold and wet British winter could have on your developments?
If a development is well maintained and repair works are carried out regularly then nasty surprises are likely to be few and far between, but it is still important to consider what would happen if the roof leaks the week before Christmas, for example. If a potential catastrophe happens, will there be enough money in the account to carry out emergency repairs?
Planning ahead for reserve funds
The way in which service charges can be demanded will always depend on the terms of the lease. Some leases will allow you to demand funds whenever required, but others will only allow service charges to be demanded at the start of a year.
A lot can happen during the course of a year, so when setting your budget it’s important to factor in reserve funds for carrying out unexpected emergency repairs over the winter, even if they are just stop gap works until you can demand sums to cover the full cost of repairs.
What happens if the reserve is empty?
If you cannot demand more funds from your leaseholders and the reserve fund is empty, consider whether your lease allows you to borrow the money and recover the cost of borrowing. This is a useful way to make sure that you always have access to funds in an emergency situation.
If you are unsure of what your lease allows, Brady Solicitors can advise how and when you can demand sums from leaseholders.
Don’t forget about section 20
The obligation to consult leaseholders about major works under Section 20 of the Landlord and Tenant Act 1985 still applies, even if the works are needed urgently. So, if the repairs are going to cost any leaseholder more than £250 then all leaseholders must be consulted before the work starts.
The average consultation process takes around two months to complete, and that’s if everything goes smoothly. But delaying emergency works for this long may allow more damage to occur, leaving leaseholders without vital services or, in the worst cases, with uninhabitable properties.
In these circumstances landlords can apply to the First-tier Tribunal for permission to dispense with the consultation requirements. This application should be made as soon as the need to carry out the works is apparent, and the landlord should make clear to the leaseholders why there is not time to consult. The Tribunal will look favourably upon a landlord who does their best to consult whilst the works are ongoing and keeps the leaseholders informed.
Help with major works planning
For advice on planning for unexpected major works and ensuring you have sufficient reserve funds, or if you need help with an emergency application for dispensation, contact our major works specialists.