How concerning is the Section 20 issue?

Punkduck

Hi there,

I'm a new poster and this is my first post so apologies if I've made any mistakes.

I'm a first-time buyer contemplating a leasehold council flat and a lot of friends are saying the Section 20 issue would completely put them off. I don't know much about it or how impacting it could possibly be. Any comments or info would be greatly appreciated!

kingstreet

Forgive the ignorance of a humble mortgage broker, but section 20 of what?

The_J

Section 20 of the Landlord and Tenant Act 1985 requires the landlord to consult the leaseholders before carrying out major works which will cost any individual leaseholder more than £250. If consultation is not undertaken the landlord cannot recover more than £250 from any individual leaseholder towards the cost of the works unless the Leasehold Valuation Tribunal (LVT) has dispensed with the requirement to consult.

Consultation always happens so I'm not too sure of the issue?

SouthCoast

The Leasehold Advisory Service should be able to help:

http://www.lease-advice.org/

Ivana_Tinkle

I've posted about this before, but 8 years ago we were looking to buy and had a choice between a small ex-council house and a slightly bigger ex-council flat on the same estate. We chose the house. A month or so after we moved in, the flats were hit with a Section 20 notice, were told the block's roof was being replaced, double glazing was being installed and the electrics were being updated. Total cost varied between flats but was around £17-18k each. The owner-occupiers in the block argued vigorously (with the support of the local councillor) that this was extortionate but the work went ahead. Thank God we chose the house as it would have ruined us.

The experience of our neighbours was that the "consultation" means v little. You cannot stop the work being done, and our local council refused to consider the alternative contractor, found by the residents, whose quote was about half the price. As far as we could tell, "consultation" seems to mean little more than being told about the work in advance - you don't seem to be able to change anything.

So, in summary, it's potentially a huge issue!

The_J

Well of course, all leaseholders are responsible for the work on the whole building. Section 20 is merely confirmation that they have to be told about it...that's a good thing.

If your roof needed replacing on your property you would have to pay for that right?

Ivana_Tinkle

The difference is that if the roof on your house needs replacing, you can choose your own contractor, or you can bodge it and patch it up a bit until you can afford it. You also wouldn't be obliged to replace all your windows and the electrics at the same time. And you'd be v unlikely to pay £8,000 for double glazing a small one-bed flat, as someone we know was forced to.

Ivana_Tinkle

... and you wouldn't replace the roof on your own house just because it was x number of years old, and the council guidelines say that it's therefore due for replacement - you'd wait until it developed a serious problem.

The_J

Oh yeah absolutely, I agree with you entirely.

Important to say not all leasehold is the same, if you have a share in the management company, with the other occupants of the building, then you can decide what needs doing when.