Introduction to Major Works

Major works is a commonly used term within Housing, to describe major works carried out by the landlord to the buildings or estates in which tenanted and leasehold properties are located, a share of which costs could be recharged to leaseholders.

However, before any leaseholders’ charges are calculated it must also be established whether or not the works require statutory leaseholder consultation at all – or in other words, whether they should be classed as being “major works”.

Major works will need further consultation with leaseholders, whereas minor repairs can be carried out and recharged as part of the day-to-day services.

In general, the source of funding for major works contracts makes no difference to whether costs are rechargeable to leaseholders, with Area Review Board funded works treated by the legislation in exactly the same way as any other works such as planned repairs or response repairs.

However, it must be remembered that each lease agreement may be different, and will be subject to conditions particular to itself alone, so recharge calculations must be made (and compared) on an individual basis.

The lease agreement gives the landlord the obligation to carry out all repairs to the buildings and estates that are required in order for the landlord to maintain them.

It also defines which of those repairs can be recharged to leaseholders, giving the leaseholder the obligation of contributing towards the costs of various named types of repair, renewal, refurbishment, upgrade or replacement works, and certain (but few) installation works, such as installing a new entryphone, communal TV aerial or erecting walls where none previously existed which are defined as being improvement works. However, as the lease does not differentiate between different works on the basis of cost, this means that leaseholders may face a great range of repair bill values.

Examples of different types of works that could be major works are the renewal of district heating systems, the installation of entryphone systems, the renewal of windows and roofs, cyclical repairs and redecorations.

Since 1985 there has been a Government prescribed formula splitting these works into two types of work: minor and major works, and different legislation covers the management of major works schemes. That formula concentrated on the cost of the works, and the phrase “major works” relates more to the rechargeable costs than to the extent of the works themselves. However, major works do tend to mainly include larger works schemes (in terms of cost and the extent of the works).

Since the Commonhold and Reform Act 2002 came into effect in October 2003, that formula has changed in monetary value, though it is still used in order to define when works should be classed as major or minor works. The general rule now is that if any leaseholder affected by the works is likely to face an estimated charge of £250 or more, then the scheme is a major works scheme. If they are major works, they then need to be consulted with leaseholders under the Landlord & Tenant Act, 1985., also known as Section 20 Consultation.

As with day to day service charges, leaseholders are generally charged on the basis of estimate contract costs, with a final account balancing the costs once the contract has finished and the actual costs incurred are known.