Proposed New Major Works Collection Policy - Leaseholders

The proposed policy would introduce a range of payment options based on the value of the major works invoice and the circumstances of the leaseholder. 

1. Prompt Payment Discount (Resident Leaseholders Only) 

A 5% discount would be available where an eligible resident leaseholder pays at least 95% of their final major works invoice within six weeks of the invoice date. 

This discount would not be available where the property is: 

• Sublet 
• Owned by a company 

2. 12-Month Interest-Free Instalment Plan 

Resident leaseholders would be able to spread the cost of their invoice over 12 equal monthly instalments with no interest charged. 

For non-resident leaseholders, a 12-month payment arrangement may be offered where permitted by the lease and will be considered on a case-by-case basis. 

3. Extended Interest-Free Payment Plans 

For larger invoices, additional interest-free repayment options may be available: 

• Invoices between £5,000 and £15,000: up to 36 months (3 years) interest-free 
• Invoices between £15,000 and £25,000: up to 60 months (5 years) interest-free

4. Long-Term Payment Options for Larger Bills (Resident Leaseholders Only) 

For invoices of £25,000 or more, resident leaseholders could choose between: 

Option A 

• Up to 96 months (8 years) interest-free 

Option B 

• Up to 180 months (15 years) 
• Interest-free for the first 8 years 
• Bank of England Base Rate plus 1.5% applied to the outstanding balance during the final 7 years 

Option C 

• Voluntary Charging Order Arrangement 

We are also considering offering a voluntary charging order arrangement for eligible leaseholders. 

Under this option, all or part of the major works debt would be secured against the property and repaid at a later date, typically when the property is sold or transferred. 

This option would be subject to: 

• Eligibility assessment 
• Legal documentation 
• Administrative and legal fees payable by the leaseholder 

We are keen to understand whether leaseholders would find this option helpful.

We would like to understand which options leaseholders value most and whether they would improve affordability and financial planning.

To what extent would each of these payment options help you manage the cost of major works charges?

We are encouraging leaseholders to receive service charge demands, statements and Section 20 consultation notices by email where possible.

Receiving documents electronically is quicker, more secure, environmentally friendly, and helps ensure you receive important information without postal delays.

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