Leaseholders paying for refurbishment works

We have capped our proposed refurbishment recharge at £10,000 per leaseholder, and we will invoice you for payment once work has started on your building.

We understand that £10,000 is a lot of money to pay all at once, so we will be contacting you with details of payment surgeries once we issue invoices for refurbishment works.

For now, we would recommend that you start saving for works in the future so that you can take up the most advantageous payment option. We are unable to offer a sinking or reserve fund as there is no provision within the lease to do so.

Your payment options

 

Help with Paying for the Works

How we calculate your major works contributions

We calculate your contribution based on the contractor’s priced specification for the works and the apportionment methods set out in your lease.  Refurbishment works carried out as part of the Masterplan will be capped at £10,000.00 as set out in our transfer consultation document.

We will issue you with a payment request detailing your estimated share of the cost of the works based on the amount in your Section 20 notice, once works have started on site.  Please note we have not issued any payment requests to date.

Help with meeting the cost of major works

Your lease agreement states that you are liable to pay service charges monthly in advance. It does not distinguish between service charges and major works. However, we recognise that this could cause difficulties for many leaseholders. Following consultation with you through residents meetings and the leasehold forum we have developed a number of payment options to help you pay your share of the cost.  Please note that we are unable to waive charges further having already limited the charge to £10,000.00 to comply with the Mandatory Reduction in Service Charge Contributions Regulations 1999.

Paying Over 3 Years

You can pay your major works bill in 36 monthly instalments without incurring any interest charges provided you enter into a repayment agreement which begins within 12 weeks of receiving your payment request and you keep up your payments in accordance with this agreement.

If you sell your property before the end of the repayment period, you will have to clear the balance outstanding.

50% Before / 50% After

Again this will take the form of a repayment agreement which begins within 12 weeks of receiving your payment request.  You can pay 50% on commencement of the works and 50% on completion. Repayment must be made within 28 days of issue of final account and a formalised dispute resolution procedure will mediate between you and us should any problems arise from the works. Interest will be charged should you fail to keep to the agreement.

Extended or Deferred Payment Scheme

We realise that many of you may find it difficult to pay over 3 years so we also provide the option for you to pay over a longer period. This option replaces the CPH loan detailed in your transfer consultation document but offers the same repayment periods. You can pay by regular monthly instalments over five, seven or ten years depending on the size of your bill. You will need to enter into a payment agreement within 12 weeks of receiving your payment request and keep up your payments in accordance with that agreement. 
Years one, two and three will be interest free. Interest will be charged at 1% above the Bank of England base rate if repaid within 5 years, 2% if repaid within 7 years and 3% if repaid within 8-10 years provided you maintain your payments in accordance with the agreement.

The deferred payment arrangement will be secured by a charge on the property. If you sell your property before the end of the repayment period you will have to clear the balance outstanding.

During the interest free period you can make overpayments on your monthly instalments. This will reduce the amount that you pay interest on. Should you choose this option you will need to sign an amended payment agreement once the interest free period is over.

The Buy Back Option

CPH may buy properties in exceptional circumstances.

Placing a Charge on Your Property

For homes where a leaseholder is aged over 60 or is in receipt of benefits a legal charge can be placed on the property for the cost of the works. This option is only available if you can demonstrate that the property is your only home and if you bought your property directly from Lambeth Council or CPH under a home ownership scheme. You can defer all payments, of capital and interest, until the property is sold. The interest would be ‘rolled up’ and be deducted from the sale proceeds. The interest rate will be 3% above the Bank of England rate.

Statutory Right to a Loan

If your property was sold by the Council or CPH under the right to buy or preserved right to buy within the past 10 years, you may have a statutory right to a loan provided you apply within 6 weeks of receiving your payment request. These loans must be secured against the property. The period of the loan is fixed, depending on the amount borrowed. The interest rate is also set out in the rules and is likely to be higher than any rate you could obtain from a bank or building society.

Income Support

If you are in receipt of income support, job seeker’s allowance or pension credit you may be able to get help paying for works. The Department of Work and Pensions will advise you on your eligibility.

Bank or Building Society Loans

You may consider this option to make a lump payment in advance. You can approach a bank or building society for a loan/mortgage or ask your current lender to increase your mortgage. You may find that these lenders can be more flexible or offer more favourable terms than we are able to. You should seek independent financial advice before taking this option.

Independent Advice Service

We have appointed Catholic Housing Aid Society, Central London (CHAS CL) to provide leaseholders with independent specialist advice to help them identify the best way to arrange to pay major works charges.

 

Payment Methods

		Eligibility Criteria	Conditions
1.	Paying over 3 years	Charge must be at least £3,000.	Payment of monthly instalments (1/36 per month) 1st payment within 12 weeks of date of payment request Breaches in payment will result in interest being charged at the rate set out in the lease
2.	50% before, 50% after	Charge must be at least £3,000.	Payment of first 50% within 12 weeks of date of payment request Payment of second 50% within 28 days of date of final payment request Breaches in payment will result in interest charged on outstanding monies
3.	Paying over 5 years	Charge must be at least £5,000.	A legal charge will be placed on the property for which an administration fee of £430 will be payable in advance Payment of monthly instalments 1st payment within 12 weeks of date of payment request No interest will be charged for the first 36 months Years 4-5 interest charged on outstanding balance at 1% above the Bank of England base rate provided the agreement Is adhered to. Breaches in payments will result in interest being charged at the rate set out in the lease.
4.	Paying over 7 years	Charge must be at least £7,000.	A legal charge will be placed on the property for which an administration fee of £430 will be payable in advance Payment of monthly instalments 1st payment within 12 weeks of date of payment request No interest will be charged for the first 36 months Years 6-7 interest charged on outstanding balance at 2% above the Bank of England base rate provided the agreement Is adhered to. Breaches in payments will result in interest being charged at the rate set out in the lease.
5.	Paying over 10 years	Charge must be at least £10,000.	A legal charge will be placed on the property for which an administration fee of £430 will be payable in advance Payment of monthly instalments 1st payment within 12 weeks of date of payment request No interest will be charged for the first 36 months Years 8-10 interest charged on outstanding balance at 3% above the Bank of England base rate provided the agreement Is adhered to. Breaches in payments will result in interest being charged at the rate set out in the lease.
6.	Placing a charge on your property	Must be leaseholder’s only home. Over 60 or on benefits. Charge must be at least £5000. Must have bought home from either Council or CPH under home ownership scheme	A charge will be placed on the property for which an administrative fee of £430 will be payable. The interest rate will be 3% greater than the Bank of England base rate. Interest will be ‘rolled up’ and recovered, with the amount the charge is for when the property is sold.
7.	Statutory right to a loan	Lease must have been granted within the last 10 years.	Loan periods depend on the amount borrowed. Details are set out in the legislation. These include interest rates. Must apply within 6 weeks of receipt of payment request.
8.	Buy-backs	Must be leaseholder’s only home. Unable to fund through mortgage, right to a loan, DWP, or charge on property.	Cases will be assessed individually. This option is subject to funds being available to CPH. Leaseholder’s must be able to demonstrate that they are unable to sell the property on the open market.
9.	Income Support	Determined by the Department of Work and Pensions (DWP).	Leaseholders receiving income support, job seekers allowance or pension credit my be eligible for assistance with the cost of certain works or with interest on amounts borrowed.
10.	Independent advice service	Available to all, via CHAS CL.	CHAS CL can provide independent financial advice for leaseholders wishing to know which financing option best suits their circumstances.
11.	Bank or Building Society loans	Available to all.	You can approach a bank or building society for a loan/mortgage or ask your current lender to increase your mortgage.