Long-term maintenance fund
Some properties have a long-term maintenance fund. This is like a savings account to help pay for the replacement and repair of major items (for example, windows) or communal areas.
If your lease has a long-term maintenance fund attached, payments will be made as part of your service charge. The money will be held in a fund, and you’ll receive an annual interest payment.
The long-term maintenance fund is also known as a sinking fund or reserve fund, depending on the terminology within your lease or transfer.
Consultation on repairs and improvements
Consultation may be legally required when an expensive repair or improvement needs carrying out.
There is a legal framework which outlines a consultation process for leaseholders who pay variable service charges. This is called Section 20, and it is part of the Landlord and Tenant Act 1985. It means that NCHA must consult leaseholders when it needs to carry out work that will cost more than £250 per property, per year, or more than £100 per property, per year for services carried out under a contract. Section 20 does not apply to freeholders.
Consultation is required:
- When NCHA plans to sign a contract of more than 12 months regarding services to the property
- When certain one-off long-term works need carrying out
- As part of an existing contract or framework
- Outside of an existing contract or framework
The consultation process can take several months. NCHA is required to write to you to advise you of what we intend to do. We may write to you again to give you an estimate for the total cost of the work, and the amount you are expected to pay.
During the consultation, you’ll have the opportunity to ask questions or give us your feedback.
If we have to carry out emergency works which need to be done quickly, we might not able to carry out a full consultation process. If that’s the case, we may have to carry out the work and then apply to a tribunal so that we can still charge for the work that was needed. The tribunal, called a First Tier Tribunal, is administered by the courts.
