G06 Section 20 Major Works and Service Contracts

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1 Section G IHT G06 Section 20 Maj Wks G06 Section 20 Maj Wks and Service Contracts 1. Purpose 1.1 This policy and procedure outlines the procedures f consulting leaseholders about cyclical maintenance and maj wks contracts and agreements f services contained in Section 20 of the Landld and Tenant Act The policy intends to ensure that NCHA meets its legal obligations and is able to recover the full cost of maj wks contracts service agreements from its leaseholders. 2. Policy Statement 2.1 It is the policy of NCHA to ensure its assets are properly maintained, including leasehold properties where it has a maintenance liability. 2.2 The Association will maintain sinking funds f cyclical maintenance and maj repairs, where the lease permits, to ensure adequate provision f future maintenance liabilities, and to avoid significant fluctuations in service charges the need to issue large repair bills to leaseholders. 2.3 NCHA will meet the requirements of Section 20 of the Landld and Tenant Act 1985, as amended by the Commonhold and Leasehold Refm Act 2002, and any subsequent legislation, in respect of the consultation of leaseholders about contracts f services and maj wks. 2.4 These procedures may not apply where there is a partnering relationship with a contract if the contract to be tendered is subject to EU procurement rules. 2.5 In exceptional circumstances, very urgent wks over the prescribed limits may have to be carried out befe Section 20 consultation has been completed. 3. Risks 3.1 The risk that the Association may be unable to recover the full cost of wks the provision of services through its failure to follow the Section 20 procedures crectly. 3.2 The risk that properties could be inadequately maintained due to a lack of funding. 3.3 The risk that leaseholders could be dissatisfied with the Association's management of maj wks service contracts. Page 1 of 12 Amended March 2014 by D Simmons

2 Section G IHT G06 Section 20 Maj Wks 3.4 The risk that the Association could be challenged by leaseholders at the Leasehold Valuation Tribunal. 4. References 4.1 Landld and Tenant Acts 1985 and Commonhold and Leasehold Refm Act NCHA Asset Management Strategy 5. Procedure: Maj Wks Contracts 5.1 The following procedure applies to all the NCHA Group's leasehold housing, and must be followed to ensure the recovery of the full cost of qualifying wks. 5.2 Qualifying wks include general maintenance, maj repairs, improvements and cyclical maintenance, including redecations. 5.3 The prescribed limit f these qualifying wks is currently 250 per year. This includes VAT. If the cost of the wks will result in one me leaseholders contributing over 250, these procedures must be followed. It is possible that the apptionment of charges may vary between leaseholders, therefe it is imptant to check the amount payable by each leaseholder. Only one has to be above the prescribed limit to trigger the consultation process. 5.4 The Intermediate Housing Manager will check the lease to ensure the proposed wks are the responsibility of the Association. 5.5 If the wk is NCHA's responsibility, the Technical Officer will prepare a specification of the wk required and estimate the likely cost. 5.6 If the cost of the wk is above the prescribed limit f at least one leaseholder, the Intermediate Housing Manager will serve a Notice of Intention to Enter into a Contract on the leaseholders (Letter 4) and on the recognised Residents Association, if one exists. The Notice will describe the proposed wks and the reasons f undertaking them. The leaseholders will be invited to nominate contracts, from whom NCHA will obtain quotations. The Notice will detail the requirements f contracts to be admitted to the Association's approved contract list. 5.7 Leaseholders will be given 30 days to respond to the Notice and will be told where and to whom to respond. 5.8 At the end of the 30 days consultation period, the Intermediate Housing Manager will review the observations in the leaseholders' responses, and any nominated contracts. If nominations exist, quotations must be sought by the Technical Officer from at least one nominee of the residents Page 2 of 12 Amended March 2014 by D Simmons

3 Section G IHT G06 Section 20 Maj Wks association, and one from any of the contracts proposed by the leaseholders. If there is me than one nominated contract from the leaseholders, the one with the most nominations will be chosen to tender. 5.9 The Technical Officer will invite tenders from the contracts following the Association's nmal tendering rules Once the quotations have been received, a Statement will be prepared which sets out the costs of at least two of the quotations, as well as giving a summary of all the observations received during the consultation period and NCHA's response to each observation. A Notice will be sent to leaseholders (Letter 5) detailing where and when the Statement, copies of the quotations f the wk and the leaseholders' observations can be viewed. The Notice will allow leaseholders a further 30 days to comment on the proposals After a further 30 days, the Technical Officer will enter into a contract f the wks A further Notice will be sent to the leaseholders (Letter 6) which details the selected contract, the reasons f the wks being undertaken, and when and where the written observations to the proposals can be viewed. 6. Procedure: Long-Term Agreements 6.1 The following procedure covers any Qualifying Long Term Agreement lasting longer than 12 months f the provision of services. 6.2 Qualifying services include maintenance contracts f lifts, entry phone systems, fire equipment, and also agreements f cleaning and gardening. 6.3 The prescribed limit f these qualifying wks is currently 100 per year. This includes VAT. If the cost of the wks will result in one me leaseholders contributing over 100, these procedures must be followed. It is possible that the apptionment of charges may vary between leaseholders, therefe it is imptant to check the amount payable by each leaseholder. Only one has to be above the prescribed limit to trigger the consultation process. 6.4 If the cost of the wk is above the prescribed limit f at least one leaseholder, the Intermediate Housing Manager will serve a Notice of Intention to Enter into a Long Term Agreement on the leaseholders (Letter 1) and on the recognised Residents Association, if one exists. The Notice will describe the services to be provided under the Agreement and the reasons f undertaking them. The leaseholders will be invited to nominate suppliers/ contracts, from whom NCHA will obtain quotations. The Notice will detail the requirements f contracts to be admitted to the Association's approved contract list. 6.5 Leaseholders will be given 30 days to respond to the Notice and will be told where and to whom to respond. Page 3 of 12 Amended March 2014 by D Simmons

4 Section G IHT G06 Section 20 Maj Wks 6.6 At the end of the 30 days consultation period, the Intermediate Housing Manager will review the observations in the leaseholders' responses, and any nominated contracts. If nominations exist, quotations must be sought from at least one nominee of the residents association, and one from any of the contracts proposed by the leaseholders. If there is me than one nominated contract from the leaseholders, the one with the most nominations will be chosen to tender. 6.7 Once the quotations have been received, a Statement will be prepared which sets out a statement of the goods services to be provided, the name and address of each contract, the total costs and cost per leaseholder of at least two of the quotations, the duration of the contract, and a summary of all the observations received during the consultation period and NCHA's response to each observation. A Notice will be sent to leaseholders (Letter 2) detailing where and when the Statement, copies of the quotations f the wk and the leaseholders' observations can be viewed. The Notice will allow leaseholders a further 30 days to comment on the proposals. 6.8 After a further 30 days, the Intermediate Housing Manager will enter into a contract f the wks. 6.9 A further Notice will be sent to the leaseholders (Letter 3) which details the selected contract, the reasons f the wks being undertaken, and when and where the written observations to the proposals can be viewed. 7. Procedure: Qualifying Contracts Long-Term Agreements f Which Public Notice is Required Under EU Procurement Rules 7.1 There is a simplified procedure f contracts long-term agreements that require public notice under EU Regulations, which only allows comments and observations to be made on the proposed wks, not on the selection of a contract. 7.2 The Intermediate Housing Manager will serve a Notice of Intention to carry out wk (to be based upon fmat of Letters 1 and 4) on all leaseholders and any recognised residents association. The Notice must describe the proposed wks and must detail the reasons f undertaking them. However the Notice will state that NCHA is not inviting nominations of contracts as public notice of the wks is to be given. 7.3 Leaseholders will be invited to make written observations and must be given 30 days in which to respond. The Notice must give clear detail of where and to whom to respond this should be the name of the LHO and the office address of NCHA. 7.4 The Intermediate Housing Manager must carefully consider the observations befe proceeding. 7.5 On the assumption that NCHA is to seek tenders, the Intermediate Housing Manager will draft a notification (based upon the fmat of Letters 2 and 5) that details a proposed contract statement which should be sent to all Page 4 of 12 Amended March 2014 by D Simmons

5 Section G IHT G06 Section 20 Maj Wks leaseholders and the residents association (if one exists). The statement should include the proposed contract, an estimate of the leaseholder s contribution to the wks, and a summary of the observations made by leaseholders and NCHA s response to them, and should be accompanied by a notice based upon the fmat of Letters 2 and Leaseholders should be invited to make written observations on the statement and will be given 30 days in which to submit them. 7.7 If any observations are received the Intermediate Housing Manager will reply to any individual leaseholder within 21 days of receipt. It is not necessary to respond to all residents. 7.8 After the 30 days consultation period has elapsed, the Intermediate Housing Manager Technical Officer can enter into the long-term agreement contract, following the Association's nmal financial procedures. Page 5 of 12 Amended March 2014 by D Simmons

6 Appendix 1 SECTION 20 MAJOR WORKS AND SERVICE CONTRACTS FLOW CHART LONG-TERM AGREEMENT CONTRACT An agreement lasting me than a year is proposed, and the cost to any leaseholder may be me than 100 in a year NO NO A contract f wks is proposed, which may cost any leaseholder me than 250 YES SECTION 20 DOES NOT APPLY Send standard letter 1 - "Notice of Intention to enter into a Long-Term Agreement" to all leaseholders YES Send standard letter 4 - "Notice of Intention to enter into a Contract" to all leaseholders AFTER 30 DAY CONSULTATION PERIOD Did any leaseholders nominate a contract? Did any leaseholders nominate a contract? NO YES YES NO Add at least one nominated contract to the tender list (the contract with the most nominations must be chosen unless two me have the same number of nominations, in which case either can be chosen) Obtain quotes tenders Obtain quotes tenders Send standard letter 2 - "Notice of Proposals to enter into a Long-Term Agreement" to all leaseholders. Ensure all written observations received in response to Letter 1 are listed and a response given to each. Send standard letter 5 - "Notice of Proposals to enter into a Contract" to all leaseholders. Ensure all written observations received in response to Letter 4 are listed and a response given to each. AFTER 30 DAY CONSULTATION PERIOD Enter into the long-term agreement. Is this either the lowest-priced contract a nominated contract? Enter into the Contract. Is this either the lowest-priced contract a nominated contract? NO YES YES NO Send standard letter 3 - "Notice of Reasons f entering into a Long- Term Agreement" to all leaseholders Send letter responding to written observations received in response to 2nd letter to all leaseholders Send standard letter 6 - "Notice of Reasons f entering into a Contract" to all leaseholders

7 Appendix 2 STANDARD LETTER 1: NOTICE OF INTENTION TO ENTER INTO A LONG- TERM AGREEMENT To: (name and crespondence address of leaseholder) and: (name of RTA) It is the intention of (insert name of landld manager) to enter into a long-term agreement in respect of which we are required to consult leaseholders The (goods)(services)(wks) to be provided under the agreement are as follows: (insert a general description of the subject-matter of the agreement) A description of the (goods) (services) (wks) to be provided under the agreement may be inspected at: (insert place and hours f inspection) We consider it necessary to enter into the agreement because: (insert statement of reasons; where the matters to be provided consist of include qualifying wks, state the reasons why you consider the wks necessary). We invite you to make written observations in relation to the proposed agreement by sending them to: (address of landld manager). Observations must be received within the consultation period of 30 days from the date of this notice, and the consultation period will end on: (insert date 30 days from the date of the notice) We also invite you to propose, within 30 days from the date of this notice, the name of a person from whom we should try to obtain an estimate in respect of the matters described in paragraph 2 above. Signed: (Signature of person giving the notice. Where an agent signs, insert also: 'duly authised agent of (name of landld manager)'.) Address: (Give the address to which future communications relating to the subject matter of the notice should be sent.) Date:

8 Appendix 3 STANDARD LETTER 2: NOTICE OF PROPOSALS TO ENTER INTO A LONG- TERM AGREEMENT To: (name and crespondence address of leaseholder) and: (name of RTA) This notice is given following the notice of intention to enter into a long-term agreement issued on: (insert date of notice of intention). The consultation period in respect of the notice of intention ended on: (insert relevant date). We have now prepared (insert number, at least two) of proposals in respect of the (goods)(services)(wks) to be provided under the agreement based on the estimates received, and [a copy of each proposal accompanies this notice] [copies of the proposals may be inspected at: (insert place and hours f inspection) We invite you to make written observations in relation to the proposals by sending them to: (address of landld manager). Observations must be received within the consultation period of 30 days from the date of this notice, and the consultation period will end on: (insert date 30 days from the date of the notice) We did not receive within the consultation period any written observations in relation to the notice of proposals given on: (insert date of notice of proposals) The written observations in relation to the proposals received during the consultation period may be summarised as follows: (insert summary of observations). Our response to the observations is: (state response) A summary of the written observations received during the consultation period, together with our response to them, may be inspected at: (specify place and hours f inspection) Signed: (Signature of person giving the notice. Where an agent signs, insert also: 'duly authised agent of (name of landld manager)') Address: (Give the address to which future communications relating to the subject matter of the notice should be sent.) Date:

9 Appendix 4 STANDARD LETTER 3: NOTICE OF REASONS FOR ENTERING INTO A LONG- TERM AGREEMENT To: (name and crespondence address of leaseholder) and: (name of RTA) This notice is given following the consultation with leaseholders on a notice of proposals to enter into a long term agreement issued on: (insert date of notice of proposals). The consultation period in respect of the notice of proposals ended on: (insert relevant date). We have now entered into an agreement f provision of the (goods)(services)(wks) first described in the notice of intention dated (insert date of notice of intention) with (name of chosen contract). Our reasons f doing so are: (state reasons) A statement of our reasons f doing so may be inspected at: (specify place and hours f inspection) We did not receive within the consultation period any written observations in relation to the notice of proposals given on: (insert date of notice of proposals) The written observations in relation to the proposals received during the consultation period may be summarised as follows: (insert summary of observations). Our response to the observations is: (state response) A summary of the written observations received during the consultation period, together with our response to them, may be inspected at: (specify place and hours f inspection) Signed: (Signature of person giving the notice. Where an agent signs, insert also: 'duly authised agent of (name of landld manager)' ) Address: (Give the address to which future communications relating to the subject matter of the notice should be sent.) Date:

10 Appendix 5 STANDARD LETTER 4: NOTICE OF INTENTION TO ENTER INTO A CONTRACT To: (name and crespondence address of leaseholder) and: (name of RTA) It is the intention of (insert name of landld manager) to enter into a contract in respect of which we are required to consult leaseholders. The (wks) to be provided under the contract are as follows: (insert a general description of the wks) A description of the (wks) to be carried out under the contract may be inspected at: (insert place and hours f inspection) We consider it necessary to enter into the contract because: (insert statement of reasons; where the matters to be provided consist of include qualifying wks, state the reasons why you consider the wks necessary). We invite you to make written observations in relation to the proposed contract by sending them to: (address of landld manager). Observations must be received within the consultation period of 30 days from the date of this notice, and the consultation period will end on: (insert date 30 days from the date of the notice) We also invite you to propose, within 30 days from the date of this notice, the name of a person from whom we should try to obtain an estimate in respect of the matters described in paragraph 2 above. Signed: (Signature of person giving the notice. Where an agent signs, insert also: 'duly authised agent of (name of landld manager)'.) Address: (Give the address to which future communications relating to the subject matter of the notice should be sent.) Date:

11 Appendix 6 STANDARD LETTER 5: NOTICE OF PROPOSALS TO ENTER INTO A CONTRACT To: (name and crespondence address of leaseholder) and: (name of RTA) This notice is given following the notice of intention to enter into a contract issued on: (insert date of notice of intention). The consultation period in respect of the notice of intention ended on: (insert relevant date). We have now prepared (insert number, at least two) of proposals in respect of the (wks) to be provided under the contract based on the estimates received, and [a copy of each proposal accompanies this notice] [copies of the proposals may be inspected at: (insert place and hours f inspection) We invite you to make written observations in relation to the proposals by sending them to: (address of landld manager). Observations must be received within the consultation period of 30 days from the date of this notice, and the consultation period will end on: (insert date 30 days from the date of the notice) We did not receive within the consultation period any written observations in relation to the notice of proposals given on: (insert date of notice of proposals) (see Note 3 below) The written observations in relation to the proposals received during the consultation period may be summarised as follows: (insert summary of observations). Our response to the observations is: (state response) A summary of the written observations received during the consultation period, together with our response to them, may be inspected at: (specify place and hours f inspection) Signed: (Signature of person giving the notice. Where an agent signs, insert also: 'duly authised agent of (name of landld manager)') Address: (Give the address to which future communications relating to the subject matter of the notice should be sent.) Date:

12 Appendix 7 STANDARD LETTER 6: NOTICE OF REASONS FOR ENTERING INTO A CONTRACT To: (name and crespondence address of leaseholder) and: (name of RTA) This notice is given following the consultation with leaseholders on a notice of proposals to enter into a contract issued on: (insert date of notice of proposals). The consultation period in respect of the notice of proposals ended on: (insert relevant date). We have now entered into an agreement f provision of the (wks) first described in the notice of intention dated (insert date of notice of intention) with (name of chosen contract). Our reasons f doing so are: (state reasons) A statement of our reasons f doing so may be inspected at: (specify place and hours f inspection) We did not receive within the consultation period any written observations in relation to the notice of proposals given on: (insert date of notice of proposals) The written observations in relation to the proposals received during the consultation period may be summarised as follows: (insert summary of observations). Our response to the observations is: (state response) A summary of the written observations received during the consultation period, together with our response to them, may be inspected at: (specify place and hours f inspection) Signed: (Signature of person giving the notice. Where an agent signs, insert also: 'duly authised agent of (name of landld manager)' ) Address: (Give the address to which future communications relating to the subject matter of the notice should be sent.) Date:

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