Question 1

Insurance Renewal

Accepted Answer

Do we need an S20 for Insurance renewal. Do we even need to inform Residents of our decision apart from politeness and transparency of all the different quotes. Also, while I am asking, may I ask you whether we need an S20 for Utilities renewal e.g. Electricity. We are a Block of 97 Flats and self-managed. The FPRA responds: A “qualifying long-term agreement” is an agreement entered into by the landlord with a wholly independent organisation or contractor for a period of more than 12 months i.e. for an agreement over 12 months and 1 day. (Agreements before 31st October 2003 are exempt.) Although it is not spelt out in the Act, it is safest to assume that this would include ongoing contracts with no specific termination date. Landlords must consult where the amount payable by any one contributing leaseholder under the agreement in any accounting period exceeds £100. Thus, in a property with unequal service charges, the landlord must consult all leaseholders if any one of them would have to pay more than £100 in any one year. The figure is to be calculated on the basis of the leaseholder's total contribution resulting from the agreement, including VAT. If consultation is not undertaken, the landlord may not be able to recover more than £100 per leaseholder in any accounting period towards the costs under the agreement. Examples of potentially qualifying long-term agreements include:

Agreements affecting the building generally (e.g. lifts, entry-phone systems, waste management or maintenance contracts);
Cleaning and gardening;
Insurance;
Utilities; and
Management agency agreements.

Some of these services may only have one realistically possible supplier. Nonetheless, consultation must be carried out, unless dispensation from compliance has been granted by the Tribunal. Contracts that are not qualifying long-term agreements include:

Contracts of employment;
An agreement between a holding company and its subsidiary, or between subsidiaries of the same holding company (the definitions following those in the Companies Act 2006);
An agreement for less than five years which was entered into at a point when there were no leaseholders or leaseholders at the property (for example on a new development);
An agreement for more than twelve months which was entered into before 31 October 2003.

Question 2

Insurance Renewal

Accepted Answer

Do we need an S20 for Insurance renewal. Do we even need to inform Residents of our decision apart from politeness and transparency of all the different quotes. Also, while I am asking, may I ask you whether we need an S20 for Utilities renewal e.g. Electricity. We are a Block of 97 Flats and self-managed. The FPRA responds: A “qualifying long-term agreement” is an agreement entered into by the landlord with a wholly independent organisation or contractor for a period of more than 12 months i.e. for an agreement over 12 months and 1 day. (Agreements before 31st October 2003 are exempt.) Although it is not spelt out in the Act, it is safest to assume that this would include ongoing contracts with no specific termination date. Landlords must consult where the amount payable by any one contributing leaseholder under the agreement in any accounting period exceeds £100. Thus, in a property with unequal service charges, the landlord must consult all leaseholders if any one of them would have to pay more than £100 in any one year. The figure is to be calculated on the basis of the leaseholder's total contribution resulting from the agreement, including VAT. If consultation is not undertaken, the landlord may not be able to recover more than £100 per leaseholder in any accounting period towards the costs under the agreement. Examples of potentially qualifying long-term agreements include:

Agreements affecting the building generally (e.g. lifts, entry-phone systems, waste management or maintenance contracts);
Cleaning and gardening;
Insurance;
Utilities; and
Management agency agreements.

Some of these services may only have one realistically possible supplier. Nonetheless, consultation must be carried out, unless dispensation from compliance has been granted by the Tribunal. Contracts that are not qualifying long-term agreements include:

Contracts of employment;
An agreement between a holding company and its subsidiary, or between subsidiaries of the same holding company (the definitions following those in the Companies Act 2006);
An agreement for less than five years which was entered into at a point when there were no leaseholders or leaseholders at the property (for example on a new development);
An agreement for more than twelve months which was entered into before 31 October 2003.

Insurance Renewal

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