Section 20 Peabody £17k bill for new lift (shared ownership properties)

annad123

Hi,

I live in a block of eight flats where all but one are shared ownership. Housing association Peabody owns the building and we pay rent and service charge to them. We have just been sent a letter saying they are replacing the lift and it will cost £145k total, and my bill is just under £18k. Our sinking fund, which is money set aside to pay for major works, was around £4k in 2019 and Peabody aren't able to say how much it has gone up by, but I'm not anticipating by much. Obviously £18k is a ridiculous amount of money, especially when our flats are supposedly affordable living. I've heard elsewhere that new lifts can be installed for around £65k. We are trying to figure out if we have the opportunity to nominate an alternative contractor, but Peabody already has a long term agreement with a company for lift maintenance. We are hoping however to challenge the bill on the basis that the lift has not ever worked and was defected from the minute it was installed. The flat was finished in 2011 and the lift was faulty from the beginning. My neighbours who have lived here since 2011 have evidence showing the dates of each time the lift broke and when it was repaired. 

Can anyone advise if we have a case? Or provide any nugget of positivity? Grateful for any advice. 

london21

New builds usually have 10 years insurance, maybe it has lapsed.
That is the downside to leaseholder flats, sometimes not much choice but to pay the bill and does not help that although shared ownership, you are responsible for 100% of the bill. 
You and the other leaseholders can try to challenge it and get an alternative contractor but they might make it near impossible. 

Leesabee1

If the lift needs replacement then for the amounts involved, you have to go through the S20 process. As part of the process you have the opportunity to nominate a contractor for the part 2 part of the process. They housing association needs to go to about 3 companies to demonstrate that they have found the best contractor for the job. The best doesn’t always mean the cheapest but they need to be able to justify the decision. 

A new build warranty will not normally cover the lift. As leaseholders you will most definitely be liable for the repair. It may be worth checking that Peabody have a valid capital expenditure plan in place to ensure that the reserve fund is adequate for your block.