Good News (and Bad News) for Leaseholders: A New Mandatory Cap on Major Works bills is now in force

The Social Landlords Mandatory Reduction of Service Charges (England) Directions 2014 came into force on the 12th August 2014.

The GOOD NEWS is that under these new regulations the maximum Major Works bills leaseholders can be charged for certain Major Works programmes is subject to cap of:

  • £15,000 for properties situated within London
  • £10,000 for properties situated outside London

The cap applies to the total amount charged for works of repair, maintenance or improvement over a 5 year period.

The BAD NEWS is that the benefit of this cap is being tightly restricted in two ways:

Firstly, this reduction is only mandatory for any Leaseholder who’s Landlord receives funding from either:

  1. Decent Homes Backlog Funding provided through the 2013 Spending Round
  2. Any other assistance for the specific purpose of carrying out works of repair, maintenance
    or improvement provided by (i) any Secretary of State ; or (ii) the Homes and Communities Agency.

Leaseholders whose Landlord receives no Government funding for the works carried out are not affected.

Secondly, these regulations are not retrospective. They will only apply to major works funded by grants which are applied for after the 12th August 2014. If you are a Leaseholder and your Local Authority, Housing Association or other Social Landlord has already received the funding you will not receive any benefit from this cap on Major Works.

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