The RCY Managing Agent (RMG) has informed leaseholders of apartments in the Granary & Bakery of their intention to start the next cyclical external redecoration of the building. A formal "Notice of Intention" under Section 20 of the Landlord & Tenant Act 1985 was sent to leaseholders on 17 May 2021. A copy of that letter can be downloaded from the link below.
Consultation deadline - 21 June 2021
Leaseholders have until 21st June in which to make written "observations" about the proposed works and/or to nominate a contractor to be invited to tender. We would like to encourage Granary & Bakery leaseholders to respond to RMG's letter, as this is a good opportunity to draw their attention to any factors which you feel should be taken into account when specifying the project. Any "observations" about the redecoration works should be directed to Toby Felton at RMG via the MajorWorks@rmguk.com e-mail address.
More information about the Section 20 process and leaseholders right to be consulted can be found at the Leasehold Advisory Service website (click here).
Background Information
Under the terms of the Head Lease for the Granary & Bakery (Phase E), external redecoration and repair works are supposed to be carried out every three years. However, a four year cycle was agreed in 2015 by RCY Landlord, Berkeley Homes, for the Phase E Capital Expenditure Plan (the "Capex").
The last major external works on the Granary & Bakery building were in 2014-15. These were carried out by Berkeley Homes and included significant repairs to windows and doors (as well as the by then overdue cyclical redecoration). However, problems started to emerge soon after the formal completion of those works and the contractors returned several times to rectify a number of defects. The rectification of the paintworks was finally completed early 2019 but defects in the lime-mortar pointing continued - and are still under discussion between Phase E leaseholder reps and Berkeley Homes. While those discussions are ongoing, Berkeley Homes has instructed RMG to issue the "Notice of Intention " to start the next cyclical redecoration of the building.
Timing
There is no formal indication as to when these external works will actually take place, although we understand that Berkeley Homes is hoping that they could commence this year, so that the lime-mortar pointing rectification works under discussion could happen at the same time. However, the Section 20 consultation process can be quite lengthy and it can take several weeks for a full specification for the Grade II* Listed building to be prepared and put out to tender. It is possible that the redecoration works may not happen until next year. However, it is important that Granary & Bakery leaseholders take this opportunity to ensure that any comments or concerns they may have are formally recorded.
Finance & the Reserve Fund
There is no way of telling exactly how much will be required to cover the costs of this next external redecoration until the estimates are in, but it is expected that this could amount to several hundred thousand pounds.
Following the 2014-15 redec, it was decided that an increased amount would be collected each year into the building "Reserves" though the Service Charge, with the aim of covering the majority of the costs for the next cyclical redecoration. The Granary & Bakery Service Charge demands increased substantially in the following years. That has resulted in a reasonably healthy Reserve balance, which should go a long way to cover the anticipated costs of the external cyclical redecoration.
However, leaseholders should be aware that the Reserves may not cover the full costs and it is possible that there might be a call for additional funds, once all the estimates are in. If that happens, when the Managing Agent issues a Section 20 "Statement of Estimates", they will also advise leaseholders if any additional funds will be required or not. There is a further consultation period for leaseholders but it is possible that any additional financial demand may then be due quite quickly thereafter (depending on when the works are due to start).
Having watched the Section 20 process unfold for several other blocks at RCY this year, the Residents Association suggests that it might be prudent for leaseholders to bear in mind the possibility of a possible extra demand on top of the Service Charge when considering household budgets for the coming year.
Please be aware that the narrative about possible costs is only the opinion of the Phase E Leaseholder rep writing this article and not provided by RMG nor Berkeley Homes.
Next steps
We recommend that Granary & Bakery Leaseholders do the following:
Make any "observations" or contractor recommendations to RMG by the deadline of 21st June 2021
Ask RMG for a copy of the Granary & Bakery Capital Expenditure Plan (the Capex) so that you can be fully aware of all the cyclical maintenance plans for the next few years. This is available on request from RMG - e-mail royalclarence@rmguk.com)
More information for leaseholders and Q&As
The Granary & Bakery Leaseholder Reps are in e-mail correspondence with most leaseholders about the current correspondence with Berkeley Homes about the rectification of lime mortar pointing works. If you have any questions for your Rep, just drop us a line (e-mail PhaseERedec@rcmra.co.uk)
