1. This section says that were works take place which are funded by a Specific Type of Grant from a Local Authority, the amount of the grant must be deducted from the relevant costs incurred by the Landlord and only the remaining balance of the cost charged to leaseholders through their Service Charge.
2. This means that Landlords who receive certain types of public funding, must reduce the costs that they pass onto any affected leaseholders in proportion to the amount of that public funding.
Which types of Grant are Relevant to Section 20A?
1. Section 20A says that only the amount of three types of Grant must be deducted from the relevant cost used to calculate a Service Charge. This Section does not state any other type of Grant which must be deducted.
2. The three types of Grant relevant to Section 20A are those given under the following legislation:
i. Section 523 of the Housing Act 1985
ii. Part I of the Housing Grants, Construction and Regeneration Act 1996
iii. Article 3 of the Regulatory Reform (Housing Assistance) (England and Wales) Order 2002
As a Leaseholder How Would I Know Whether Works Have Been Funded Through One of These Grants?
1. You need to check what types of work are involved, any correspondence you have received from your landlord and in some instances with your landlord and the Local Authority.
2. Please note that in practice there are very few leaseholders to whom Section 2OA will be relevant; Leaseholders should not be concerned except in the very specific circumstances outlined below:
i. Section 523 of the Housing Act 1985 provides Grants only for the provision of a separate water service pipe if a property is connected to a water main via a shared service pipe. This type of grant comes from a Local Authority and only applies to houses (not flats). If you live in a house and you are paying for the cost of the installation of a separate water service pipe through your service charge you might want to check with your landlord and your local authority whether a Grant has been given, and whether the appropriate amount has been deducted from your Service Charge.
ii. Part I of the Housing Grants, Construction and Regeneration Act 1996 allows Local Authorities to provide Grants solely for the purpose of the provision of facilities for disabled people. These types of Grants are not available to a number of public authorities, such as Local Authorities, Housing Action Trusts, and NHS Primary Care Trusts. Housing Associations are not in this list included nor any other charitable bodies, meaning they can apply for these Grants as can individual property owners. If your Landlord is carrying out works to the common parts of a building for the purposes of disabled adaptations, and your Landlord is not a public authority, you might want to check with your Landlord and your Local Authority as to whether a Grant has been given, and whether the appropriate amount has been deducted from your Service Charge.
iii. Article 3 of the Regulatory Reform (Housing Assistance) (England and Wales) Order 2002 allows Local Authorities to provide grant funding for a much wider range of works than the other two Grants mentioned above. It should be noted that such funding may only be given by a Local Authority if the works involved fall within the stated policy aims of Local Authority such as a Regeneration Policy. The Local Authorities must give public notice of such a policy and provide copies of the policy to the public on request. Leaseholders are unlikely to be affected by such grant funding unless their Landlord is doing works which fit in closely with a Local Authority plan to improve the overall condition of housing in a particular area. The types of work which may be funded by such a Grant are:
- Work to adapt or improve living accommodation.
- Work to repair living accommodation.
- Work to demolish buildings comprising or including living accommodation.
- Where buildings comprising or including living accommodation have been demolished, work to build replacement living accommodation.
Click on the link to read more about the Landlord and Tenant Act 1985