Leaseholders - Your lease, major works and service charges

People who buy their council flat or maisonette are known as leaseholders or lessees. This information is for existing Council leaseholders and for anyone who may be thinking of buying their Milton Keynes Council flat or maisonette.

Your lease agreement

Council leases are not all the same and may vary depending on when they were first drawn up, this information only provides a summary of the terms in most leases It does not replace the terms of your lease, your statutory rights or any other legal agreement.  If you have a problem with the terms of your lease, you are strongly advised to obtain independent legal advice from a solicitor, a Law Centre or a Citizens Advice Bureau.

Please note: From time to time our policies will change, and so will the law. We may change any non-statutory procedures set out on these pages and will update this information and let you know when new editions are available.

Leasehold Management

Alterations

Sub-letting

Selling your property

Complaints

Insurance

Losing your property - eviction

Your lease

Repairs

Extending your lease

Neighbour nuisance

Buying the freehold

The Leaseholders main obligations

The councils main obligations

Deed of variation

Service Charges

What are service charges?

What do service charges pay for?

Actuals and estimates

Payment methods

Payment difficulties

Querying service charges

Consultations

Major works and long term agreements

Frequently asked questions

Service charge loan scheme

Leasehold management

Alterations

You must get the council's written permission if you want to carry out any improvements or alterations to any part of the property that is the Council's responsibility. This includes any work that might affect the structure of the building or affects the external appearance, such as external decorations, the replacement of external doors & windows and the construction of such things as porches. We may make a charge for this request for approval.

You may also need to obtain additional permission, such as planning permission and/or building regulations consent.

When applying for permission to make alterations you will need to enclose copies of detailed plans/drawings that explain what you want to do.

We will not give permission for the use of any loft space due to fire safety and insurance reasons.

Subject to the terms of your lease, we will refuse permission only if we have good reason to. We will also tell you why we have refused permission.

If you go ahead with work after we have refused permission, or carry out the work without seeking written permission from the Council, you will be in breach of your lease and we may need to take action to ensure that you rectify the breach. On occasions, we may ask that you seek retrospective consent from the Council and you will need to pay a fee for this consent.

All front doors going into a communal area must be a fire door. You should ensure that this is checked before you make any changes.

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Sub-letting

The Council has no objections to you sub-letting your property (non shared ownership properties) as long as the lease allows it and the conditions imposed by the Councils insurers are met (otherwise an additional premium will be payable).

Please be aware that if the property is unoccupied for more than 30 days, cover in respect of malicious damage, theft ar attempted theft and burst water pipes will not be covered until the property is occupied again.

The conditions of sub-letting are:

  • The pay the Council the admin fee of £10
  • A formal tenancy agreement must exist
  • We recommend the consent of the mortgagee is obtained
  • Any necessary statutory approvals are obtained i.e planning permission
  • The agreement must comply with the Lettings Agreement defined under the 1988 Housing Act - as modified by the Housing Act 1996
  • The property shall be let for no less than 6 months
  • Emergency contact numbers must provided
  • If you take a deposit you must register this in a government approved scheme

A Gas Safe registered engineer must carry out the annual gas safety check, if the property has gas appliances. It is your responsibility to ensure that all electrical installations are safe when the tenancy begins and are maintained in a safe condition throughout the tenancy.

Please contact Home Ownership on 01908 253705 for a form and to make the payment of the £10 admin fee.

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Selling your property

Please keep all your service charge invoices, consultation notices and correspondence concerning your property together in a safe place. This information should be passed to your solicitor during the sale.

Your solicitor should request a leasehold sales pack from ourselves as part of the sales process. There is a fee for this, for a response in 10 working days the fee is £75 and for a response in 5 working days the fee is £100.

When you sell your property the buyer's solicitor must within 30 days of the sale serve two notices on the Council to enable us to transfer the property into their names. If this does not happen then the property will remain in your name until it does. The Council will insist on the new owners signing a Deed of Covenant, stating that they will abide by the terms of the original lease.

Remember the Council will only respond to enquiries about your property from you or someone authorised to act on your behalf.

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Complaints

Our Home Ownership team has a formal complaints procedure. If you are a leaseholder, the team, depending on the nature of the complaint will initially deal with your complaint.

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Insurance

Under the terms of the lease we have an obligation to insure your building. We do not provide insurance for the contents of your home, so please ensure that you arrange adequate contents insurance to meet your needs.

The insurance covers rebuilding costs. This charge is based on our insurance valuation. Your insurance premium is calculated using a set amount for each £1,000 worth of cover. The charge also includes an insurance premium tax paid to the Government.

The current contract is with Aspen, if you need to make a claim then please contact the 24 hrs claim line on 0800 358 0172.

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Losing your property - eviction

A leaseholder who fails to pay service charges, ground rent or administration charges which are due, could face sanctions from Milton Keynes Council. These could include the council seeking a county court judgement, approaching your mortgage lender and ultimately the council could seek to forfeit the lease and repossess your flat. This is a right in law, but it is not possible to obtain possession without a court order. The process is commenced, generally, by the service of a valid notice under section 146 of the Law of Property Act 1925, the Notice of Seeking Possession.

Before the council can serve a section 146 notice, the steps to be taken are:

  • the leaseholder must have agreed that the breach has occurred and that any arrears are duly owing; or
  • the council must make application to the Tribunal for a determination that the breach has occurred; and
  • where the breach involves arrears, that the sum is payable and reasonable;
  • after the determination becomes final, the leaseholder must be allowed a further 14 days in which to resolve the breach or settle the arrears;
  • where, after 14 days the leaseholder has not resolved the breach, the council may proceed with service of the section 146 notice. This will require separate determination by the county court.

Failure to pay a small amount of charges for a short period

The council cannot serve a valid Section 146 notice unless the amount of service charges, administration charges or ground rent owed (or a combination of all of these) is more than £350 or consists of, or includes, an amount that has been outstanding for more than three years.

Of course, while forfeiture or action seeking repossession may not take place, the council may seek to recover monies through other means, such as the small claims court. This should not therefore be used as a means of withholding sums of money that are lawfully and reasonably payable under the terms of the lease.

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Your lease

The lease is a legal agreement between the leaseholder and the landlord (the Council). When you buy a flat or maisonette from the council you purchase a leasehold interest and the council keeps the freehold. As freeholder the council owns the land that the property is built on and may charge a ground rent.

  • Council ground rent on some properties sold under the Right to Buy scheme are normally £10 a year
  • Some rents may be slightly higher if the property was bought a long time ago
  • Most council leases last for 12 years from the date of the first sale in the block but they can occasionally be for shorter periods

The council has used several different types of leases that have periodically been updated to reflect changes in the law. If we need to change your lease, we will ask you to agree to a Deed of variation or obtain a court order. We can also make changes to a large number of leases as long as at least 75% of the leaseholders affected agree and no more than 10% are against. 

The lease will specify which parts of the property have been sold to you and what rights over communal land you have acquired. This is called the demised premises and will be identified by address and by a plan or plans attached to the leases.

If you have lost your copy of the lease and you have a mortgage, you should contact your lender. They will normally be able to supply you with a copy. If you do not have a lender or they are unable to help, you can go through land registry or you can contact us, however we will make a charge for supplying you with a copy.

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Repairs

Your responsibilities

This generally includes:

  • Internal walls, plasterwork, ceiling and floor surfaces
  • Tanks, cisterns, drains, pipes, ducts, conduits, plumbing and wiring which serve your home only
  • Window glass (but not window frames)
  • External doors to your home ( these must be to fire safety requirements)
  • Gardens and steps for which you have sole use
  • Internal fixtures and fittings, unless they belong to the council
  • Internal decoration

The councils responsibility

The council owns and is responsible for the maintenance and repair of the exterior, main structure of the building and estate complex. This generally includes:

  • Main structural parts of the building including the roof, foundations and walls (but not the plasterwork)
  • Joists and beams
  • Loft spaces and the fittings and equipment within them, which serve more than one home
  • Tanks, cisterns, drains, pipes, gutters, sewer ducts, conduits, plumbing and wiring which serve more than one home
  • External doors and window frames to your home
  • Communal hallways, corridors, stairways, doors, door frames, lifts and other shared internal spaces
  • Communal gardens, paths, parking areas, recreation areas and other shared external areas

Criminal damage to communal areas

Leaseholders are advised as soon as possible to report any criminal damage to the communal areas, to the police and get a crime reference number. Once you have the number make sure this passed to the repairs call centre when reporting the repair on 0330 123 2522

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Extending your lease

There are rules about how to apply, the details needed, timescales and what happens next are governed by the law. To find out this information please go the Lease Advisory service website.

Before you contact us you will need to have a suitably qualified solicitor to assist you with the formal request to purchase an extension to your lease. There are costs involved if you make a formal application which you will have to pay.

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Neighbour nuisance

Not to cause a nuisance to your neighbours is one of the main obligations of your lease, along with paying your service charges. You are also responsible for the behaviour of your family, visitors and if you sub-let your tenants. All of our residents have the right to live peacefully in their home and we expect people to show consideration to their neighbours, we will not tolerate anti-social behaviour.

We recommend that neighbours attempt to solve problems between themselves. If however it is proved that persistent nuisance/anti-social behaviour is being caused, we may be able to give further advice and refer you onto other agencies that may be able to help resolve the problem.

You do have the right to take your own legal action against neighbours causing a nuisance.

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Buying the freehold

The freeholder has the right to sell the freehold. However, there are a number of rules in place and the council must first offer it to qualifying residents.

In certain circumstances, leaseholders have a collective legal right to buy the freehold of the block.

There are criteria for the building, for qualifying tenants and there are also exclusions.

We can not list all the rules as this page describes an overview of your rights and is not a full interpretation of the law. If you wish to have more information we strongly suggest seeking legal advice.

Before selling the freehold we will need to agree its value with you. If this can not be agreed, the First Tier Tribunal will determine the value.

For further advice see the Lease Advisory website

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The leaseholders main obligations

As a leaseholder you must:

  • Pay all service charges due under the terms of your lease 
  • Keep you home in good repair including internal decoration
  • Keep you home in a clean and tidy condition; some leaseholders may also be responsible for helping to keep adjacent communal areas clean and tidy
  • Allow the council, its agents, contractors or staff access to your home if given reasonable notice or in an emergency
  • Repair any faults we tell you about within 3 months or earlier if necessary
  • Give us a copy of any notice affecting the property within a month of the date of the notice
  • Only use the property as a private dwelling, and not carry out any business at the property without our permission
  • Allow any other maintenance or repairs that may be necessary to the property. Other leaseholders must give you reasonable notice and any work undertaken should cause as little disturbance as possible. They must make good any damage caused to your home.
  • If you sub-let your home (and there is a gas supply) you must ensure that an annual gas safety check is carried out by a registered gas safe engineer

As a leaseholder you must not:

  • Make alterations to the building without the councils prior consent
  • Cause a nuisance or annoyance to neighbours or let other members of your household do so
  • Cause damage to the building or fix any sign or otherwise disfigure any of the communal areas, fences or walls
  • Disconnect the property from any communal heating system without our prior written permission

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The councils main obligations

In accordance with the terms of the lease, the council must:

  • Maintain and repair the structure and exterior of the building including external decoration, shared drains, gutters, pipes and the roof
  • Maintain and repair all communal areas (for example staircases & entrances) both internally and externally including decoration
  • Consult with you concerning certain repairs
  • Insure the building and carry out repairs to it following loss due to such events as fire or flood
  • Provide the services set out in the lease (normally listed in schedule 1 of the lease)
  • Maintain any services set out in the lease and any machinery or installations connected with those services

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Deed of variation

Because the lease is a legal document, it can only be altered by a Deed of Variation, which may be approved by the County Court. The cost of securing a Deed  may be several hundreds pounds and if you feel that your lease ought to be changed we suggest that you contact the Home Ownership Team on 01908 253705 before taking any further action. 

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Service charges

What are service charges?

Under the lease the council is required to maintain the block, the estate and for providing any other services specified in the lease. These cost must be paid for, and the lease allows us to collect them as a "service charge"  from the leaseholder.

The council is legally obliged to charge leaseholders for their share of its costs and to make sure that the charges it sets are 'reasonable'.

Many of the councils blocks and estates have both tenants and leaseholders living in them. As a leaseholder you are not charged for the cost of repairs to tenants properties. 

Once we receive the cost of each service and the total is divided into individual contributions depending on the percentage set out in your lease and each leaseholder must pay their share.

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What do service charges pay for?

Your service charges are made up of a number of different elements. Not all blocks get all the elements. They could include:

  • Communal electricity - this covers the electricity to the communal areas and for such things as lifts and door entry systems
  • Communal heating - This covers the fuel and standing charges. Not all blocks have this.
  • Caretaking - this covers caretaking costs, such as salary and employments costs. Not all blocks have this
  • Concierge - this covers concierge costs, such as salary and employments costs. This is only applicable to Mellish Court
  • Communal cleaning - covers the costs for cleaning the communal areas. Only blocks with communal areas will receive this
  • Communal repairs - this covers the cost of the contractors and materials for carrying out general repairs to the block/estate
  • Pest control - this covers the cost of managing the reduction of all pests in the block/estate
  • Aerial maintenance - this covers the cost of maintaining the digital aerials that were put up on the majority of blocks
  • Buildings insurance - this is the cost of insuring the block
  • Management fee - this is the councils cost of managing its leasehold properties
  • Ground rent - Some leases require an annual £10 fee. If this is not in your lease then you are not charged it

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Actuals and estimates

Estimated charges

The council will invoice you quarterly for your service charges. In September each year, we will send you a statement showing your estimated charges for the next year.

We divide this charge by four and send you an estimated service charge invoice every three month, in September, December, March and June. Each invoice gives you the details of the estimated charge for the services we provide.

What months do the invoices cover
Invoice Months covered Date sent
1st quarter 1st April to 30th June 1st September
2nd quarter 1st July to 30th September 1st December
3rd quarter 1st October to 31st December 1st March
4th quarter 1st January to 31st March 1st June

Actual charges

Once we receive the actual costs for all the services we provide, we will then work out whether or not we have over estimated or under estimated the charges we have sent out to you during the year. If we have over estimated the charges, we will put a credit on your account, if we have under estimated we will put a debit on your account. 

We will then send out a pack to each leaseholder that includes

  • A breakdown of all the estimated and actual charges on the account, this will show what charge we have put on the account
  • A statement of account which will show all the charges and payments made to your account and what the current balance is
  • An invoice showing either a debit amount which needs paying or the amount we have credited to your account

Leaseholders are expected to pay their service charge invoices promptly. If the council does not receive payment, it can collect the outstanding amount owed as arrears. The council reserves the right to charge interest on arrears in the course of legal proceedings. If you have a mortgage we may also contact your lender for full payment.

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Payment methods

Direct Debit

This is the easiest and most convenient method of paying your service charge. You can choose when these payments will be taken from you bank account.

The options are:

  • Monthly on the 1st or 15th of the month
  • Weekly on a Monday
  • Quarterly

Leaseholders who pay by Direct Debit are fully protected by the DD guarantee. If you would like to set up a DD please contact the Home Ownership Team on 01908 253705.

On the phone

You can make a debit or credit card payment by phone any time of the day or night by using the 24 hour automated payment line. Simply call 01908 253940, you will need you 9 digit service charge account number.

During office hours (9am to 5pm, Monday to Friday) you can also call the Home Ownership Team on 01908 253705.

On-line

You can make a payment at any time on-line using your debit or credit card, you will need you 9 digit service charge account number. To go the page click on the link Pay on-line

Standing Orders or on-line payments

You can make arrangements with your bank to set-up regular payments from your account to ours the details you will need are

  • Sort code - 60 14 55
  • Account no - 3717 1542
  • Your 9 digit service charge account number

Please note if you choose to pay this way then you are responsible for making sure that the payments are correct and reach the council on time.

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Payment difficulties

If you don't pay on time or you get into arrears and we are unable to resolve the problem with you, we may need to take further action to recover the debt. This could mean that the council would:

  • Seek to obtain an order from the County Court for payment of the debt
  • Write to your lender (if you have one) who may settle the arrears on your behalf.
  • Apply for possession of the property through a First Tier Tribunal. This is otherwise known as forfeiture and could result in your losing the property and you would not be entitled to any payment or compensation.

Forfeiture is a severe step and as a responsible landlord we have only used it where we have been left with no other course of action. 

Independent debt advice

The Leasehold Advisory Service and Citizens Advice Bureau can give you information and advice on a wide range of housing and debt options, accessing benefits and prioritising your finances

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Querying service charges

If you have a disagreement over service charge levels or service delivery, please contact the Home Ownership Team straight away.

We aim to resolve all disputes amicably through discussion over the phone, in person, by email or in writing.

Leaseholders also have the right to refer disputes over what they are liable to pay and whether their service charges are reasonable to the First Tier Tribunal, you must continue to pay your service charges during this time.

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Consultations

Major works and long term agreements

Under the terms of your lease, the council is responsible for the maintenance of the external and communal parts of the building and estate where your leasehold property is situated.

A proportion of the cost of this work is rechargeable to you as a one off major work cost, inaccordance with the terms of your lease. Your lease explains this in specific detail.

As the cost of these works can be significant, the law requires us to carry out a formal consultation in particular circumstances with leaseholders who may be affected by the work and have an obligation to contribute toward them.

If the cost to each property is likely to be more that £250, we must provide you with certain information about the works, their cost and the reasons why we consider it necessary to carry out the works.

This is often referred to as "Section 20" consultation. This relates to the part of the Housing Act which specifies what must happen.

Section 20 of the Landlord and Tenant Act 1985 first introduced the requirement on landlords to consult their leaseholders about works. It has been amended since 1985, and the current rules regarding consultation are contained in Section 151 of the Commonhold and Leasehold Reform Act 2002.

So what happens?

We will formally notify you of the work we would like to carry out. The consultation notice which you receive complies with what is required by the law. It provides you with the relevant information for you to consider about the proposed works and gives you the opportunity to make observations or comments about the works and associated costs.

You should always read the notice carefully; you have received it because it concerns your property.

The work

Subject to the completion of the form consultation, work can then begin.

We expect the contractors who work on our buildings and estates to carry out works professionally and to a reasonable standard. We carry out regular inspections during the course of the work to ensure that this takes place.

Another method of assessing whether these standards are being achieved is by inviting you to comment. If you are concerned about the quality of works or the performance of the contractors, then we want you to tell us about it. It is helpful if you provide as much detail as possible about your concerns, as soon as possible, so that we can investigate the matter effectively.

 

If you are unsure of anything

Upon receipt of your notice, if you still have questions after reading our FAQ's below, you may find it helpful to contact the Home Ownership Officer whose name appears on the notice. They will assist you with clarification of the details in the notice, but if you want to make any formal observations, you are required by law to make these in writing, and they must be received during the consultation period specified in your notice.

The law requires us to respond to any observations you make within 21 working days of receiving them. The Home Ownership Team will respond to your observations, however it is sometimes necessary for us to contact YourMK if any of the observations are of a technical nature.

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Frequently Asked Questions

Aren't you just telling me about the works you will do anyway?

The official legislation relating to leaseholder and landlord rights and obligations, makes reference to "consultations and leaseholders rights to be consulted" about proposed works affecting their property.

This means that leaseholders have the right to be informed about the works, the estimate of the cost and why we want to do the works. This is the legal right to consultation it does not give leaseholders the option to agree with the works or not. It is the right to information about the proposal.

The work you are proposing doesn't directly benefit my property - why should I have to pay?

Your lease contains specific clauses relating to your liability to contribute towards major works; this contribution is not based on whether you receive a direct benefit from the work but that the work s done.

Your lease may state that you must contribute to works and services provided to the block in which your property is situated and for this reason you are liable to contribute.

A key example of this, is when a leaseholder in a block of flats has requested permission to replace his own windows. On the consent letter there is a paragraph that explains that although he has consent to change his own windows, should the council change the rest of the windows in the block he will still be liable to pay his share of any work carried out to the bloc even though he paid to replace his own windows. 

You have only provided one estimate. How do I know this is a competitive price?

If we have entered into a qualifying long term agreement with a contractor, we will have done so using a competitive tender process and we will have consulted on this with leaseholders at an early time.  We are therefore confident that the price is competitive.

If we have not entered into a qualifying long term agreement then we will go through a tender process and you will be invited to come into our offices to view the documents if you wish.

I don't know anything about building works. How can I make observations?

Our asset management team will have inspected the properties and made an assessment of what works are required. They have the appropriate knowledge of building standards and construction methods to make these assessments. If there is a technical detail in your notice that you do not understand please contact us and we can explain what this means.

You haven't given me enough information to make my observations.

The information contained in the notice is in a statutory format, this means that we have to by law, produce it in this way.

The information provided is considered to be sufficient to enable you to make observations about the works. If there is some part of the information that you would like us to clarify, please contact the Home Ownership Team using the details on the notice.

Milton Keynes Council is just spending money without thinking and leaseholders can't afford these works.

Given the current economic climate things are challenging across the board and Milton Keynes Council certainly does not have a surplus of money to spend, we therefore only carry out works which are absolutely necessary. The decision making process surrounding the identification, definition and completion of a major works project is well thought out and has to be approved by a number of senior managers in housing before any work commences. Projects are always subject to leaseholder consultations.

Where works or contracts are sufficiently large, approval is sought through the councillor responsible for housing or sometimes through cabinet and council committees. Please therefore be assured that we very carefully consider all our spending decisions.

Your notice is asking me to pay for works now, even though the work hasn't started.

The notice is not an invoice or a demand for payment. It simply shows an estimate of the contribution you will have to make towards the cost of the proposed work. The actual cost and your contribution will not be fully calculated and invoiced until after the work is completed.

Depending on the size and the scope of the work, leaseholders invoices are normally issued within 6-12 months following the completion of the consultation. We would suggest that in the meantime you may want to start thinking about how you will pay your share once you have received the invoice.

What is the management fee for? Am I paying twice for the same thing? Isn't this covered by the management fee I pay in relation to my day-to-day service charges?

Your lease allows us to recover our costs for completing major works. This is completely separate from the cost of the works themselves. Your lease explains your obligations in this regard in more detail.

In basic terms, this means that Milton Keynes Council are able to recover a proportion of the costs of the staff employed to deal with the major works projects. This cost also goes towards the cost of administration involved in the issue of the Section 20 consultation, and the calculation and billing of major works contributions for leaseholders. 

How do I pay this amount?

You only pay when you have received the invoice for the works. Your lease generally requires full and immediate settlement of the invoice within 28 days. However, we are fully aware that this may not always be possible, and therefore there are a number of options which may (depending on your individual circumstances) be available to you.

If you are worried about how to pay, please talk to the Home Ownership Team as soon as possible who will be able to tell you about a number of options that may be available to you.  

This is a bill which you must pay, so please do not simply ignore it as non payment will be considered as a breach of your lease and may result in legal action against you.

If you want to do work to the building, why is it not covered by the buildings insurance policy?

Building insurance policies do not cover general maintenance of the building, it is there to cover accidently damage.

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Service charge loan scheme

You may qualify for a loan for major works or repairs during the first 10 years of your lease if;

  • You bought the property under the Right to Buy scheme
  • The total charge for the year is more than £1,500

You may be eligible to borrow between £500 and £20,000. Please note that mandatory service charge loans have a limited application period. Applications must be made within 6 weeks  of the date of the invoice, this is a legal requirement.

Before you apply

A service charge lean from the council may not always be the best option for you as you may be able to get a lower rate of interest elsewhere. You should always look at the secured loan rates offered by banks or building societies before choosing to take a loan out with the council.

Conditions

  • The loan is in respect of a service charge for repairs and improvements only;

and

  • There is sufficient equity in your home to allow for a further loan (we may need to value your home for larger loans);

and

  • You provide details of your current mortgage and any other mortgage or charges on your property
  • There is a fee, which can be added to the loan

If you think you meet the conditions for a loan and agree to the terms, you can apply by contacting the Home Ownership Team on 01908 253705.

What we do

Once we receive your application, we will review the details and the eligibility criteria to help us make a decision in principle, whether to offer you a mandatory Loan.

Important Notice

Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it. Make sure you can afford the repayments before entering into an agreement

 

Last Updated: 29 April 2021