The Service Charges (Consultation Requirements) (Wales) Regulations 2004

Made: 9th March 2004

Coming into force: 31st March 2004

The National Assembly for Wales makes the following Regulations, in exercise of the powers conferred by sections 20(4) and (5) and 20ZA(3) to (6) of the Landlord and Tenant Act 1985[^f00001], which are now vested in the National Assembly for Wales so far as exercisable in relation to Wales[^f00002].

Name, commencement and application

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• (1) These Regulations are called the Service Charges (Consultation Requirements) (Wales) Regulations 2004 and shall come into force on 31st March 2004.

• (2) These Regulations apply in relation to Wales only.

• (3) These Regulations apply where a landlord—

• (a) intends to enter into a qualifying long term agreement to which section 20 of the Landlord and Tenant Act 1985 applies[^f00003] on or after the date on which these Regulations come into force; or

• (b) intends to carry out qualifying works to which that section[^f00004] applies on or after that date.

Interpretation

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• (1) In these Regulations—

• “the 1985 Act” (“Deddf 1985”) means the Landlord and Tenant Act 1985[^f00005];

• “close relative” (“perthynas agos”), in relation to a person, means a spouse , civil partner or cohabitee (“ystyr “un sy’n cyd-fyw” (“cohabitee”) mewn perthynas â pherson, yw person sy’n byw gyda’r person hwnnw fel pe baent yn gwpl priod;”) in relation to a person, means a person living with that person as if they were a married couple;, a parent, parent-in-law, son, son-in-law, daughter, daughter-in-law, brother, brother-in-law, sister, sister-in-law, step-parent, step-son or step-daughter of that person ;

• cohabitee (“un sy’n cyd-fyw”) in relation to a person, means a person living with that person as if they were a married couple or civil partners;

• “nominated person” (“person a enwebwyd”) means a person whose name is proposed in response to an invitation made as mentioned in paragraph 1(3) of Schedule 1 or paragraph 1(3) of Part 2 of Schedule 4; and “nomination” (“enwebiad”) means any such proposal;

• “public notice” (“hysbysiad cyhoeddus”) means any notice published, pursuant to the Procurement Act 2023 which relates to a public contract (within the meaning of section 3 of that Act).

• “relevant matters” (“materion perthnasol”), in relation to a proposed agreement, means the goods or services to be provided or the works to be carried out (as the case may be) under the agreement;

• “relevant period” (“cyfnod perthnasol”), in relation to a notice, means the period of 30 days beginning with the date of the notice;

• “RTB tenancy” (“tenantiaeth RTB”) means the tenancy of an RTB tenant;

• “RTB tenant” (“tenant RTB”), in relation to a landlord, means a person who has become a tenant of the landlord by virtue of section 138 of the Housing Act 1985[^f00009] (duty of landlord to convey freehold or grant lease), section 171A of that Act (cases in which right to buy is preserved), or section 16 of the Housing Act 1996[^f00010] (right of tenant to acquire dwelling)[^f00011] under a lease whose terms include a requirement that the tenant shall bear a reasonable part of such costs incurred by the landlord as are mentioned in paragraphs 16A to 16D of Schedule 6 to that Act (service charges and other contributions payable by the tenant)[^f00012];

• “section 20” (“adran 20”) means section 20 (limitation of service charges: consultation requirements) of the 1985 Act;

• “section 20ZA” (“adran 20ZA”) means section 20ZA (consultation requirements: supplementary) of that Act.

• (2) For the purposes of any estimate required by any provision of these Regulations to be made by the landlord—

• (a) value added tax shall be included where applicable; and

• (b) where the estimate relates to a proposed agreement, it shall be assumed that the agreement will terminate only by effluxion of time.

Agreements that are not qualifying long term agreements

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• (1) An agreement is not a qualifying long term agreement[^f00013]—

• (a) if it is a contract of employment; or

• (b) if it is a management agreement made by a local housing authority[^f00014] and—

• (i) a tenant management organisation; or

• (ii) a body established under section 2 of the Local Government Act 2000[^f00015];

• (c) if the parties to the agreement are—

• (i) a holding company and one or more of its subsidiaries; or

• (ii) two or more subsidiaries of the same holding company;

• (d) if—

• (i) when the agreement is entered into, there are no tenants of the building or other premises to which the agreement relates; and

• (ii) the agreement is for a term not exceeding five years.

• (2) An agreement entered into, by or on behalf of the landlord or a superior landlord—

• (a) before the coming into force of these Regulations; and

• (b) for a term of more than twelve months,

is not a qualifying long term agreement, notwithstanding that more than twelve months of the term remain unexpired on the coming into force of these Regulations.

• (3) An agreement for a term of more than twelve months entered into, by or on behalf of the landlord or a superior landlord, which provides for the carrying out of qualifying works for which public notice has been given before the date on which these Regulations come into force, is not a qualifying long term agreement.

• (4) In paragraph (1)—

• “holding company” and “subsidiaries” have the same meaning as in the Companies Act 1985[^f00016];

• “management agreement” has the meaning given by section 27(2) of the Housing Act 1985[^f00017]; and

• “tenant management organisation” has the meaning given by section 27AB(8) of the Housing Act 1985[^f00018].

Application of section 20 to qualifying long term agreements

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• (1) Section 20 shall apply to a qualifying long term agreement if relevant costs[^f00019] incurred under the agreement in any accounting period exceed an amount which results in the relevant contribution of any tenant, in respect of that period, being more than £100.

• (2) In paragraph (1), “accounting period” means the period—

• (a) beginning with the relevant date, and

• (b) ending with the date that falls twelve months after the relevant date.

• (3) Subject to paragraph (3A), in the case of the first accounting period, the relevant date is—

• (a) if the relevant accounts are made up for periods of twelve months, the date on which the period that includes the date on which these Regulations come into force ends, or

• (b) if the accounts are not so made up, the date on which these Regulations come into force.

• (3A) Where a landlord —

• (a) intends to enter into a qualifying long term agreement on or after 31 May 2005; and

• (b) has not at any time between 31 October 2003 and 31 May 2005 made up accounts relating to service charges referable to a qualifying long term agreement and payable in respect of the dwellings to which the intended agreement is to relate,

the relevant date is the date on which begins the first period for which service charges referable to that intended agreement are payable under the terms of the leases of those dwellings.

• (4) In the case of subsequent accounting periods, the relevant date is the date immediately following the end of the previous accounting period.

The consultation requirements: qualifying long term agreements

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• (1) Subject to paragraphs (2) and (3), in relation to qualifying long term agreements to which section 20 applies, the consultation requirements for the purposes of that section and section 20ZA are the requirements specified in Schedule 1.

• (2) Where public notice is required to be given of the relevant matters to which a qualifying long term agreement relates, the consultation requirements for the purposes of sections 20 and 20ZA, as regards the agreement, are the requirements specified in Schedule 2.

• (3) In relation to a RTB tenant and a particular qualifying long term agreement, nothing in paragraph (1) or (2) requires a landlord to comply with any of the consultation requirements applicable to that agreement that arise before the thirty-first day of the RTB tenancy.

Application of section 20 to qualifying works

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For the purposes of subsection (3) of section 20 the appropriate amount is an amount which results in the relevant contribution of any tenant being more than £250.

The consultation requirements: qualifying works

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• (1) Subject to paragraph (5), where qualifying works are the subject (whether alone or with other matters) of a qualifying long term agreement to which section 20 applies, the consultation requirements for the purposes of that section and section 20ZA, as regards those works, are the requirements specified in Schedule 3.

• (2) Subject to paragraph (5), in a case to which paragraph (3) applies the consultation requirements for the purposes of sections 20 and 20ZA, as regards qualifying works referred to in that paragraph, are those specified in Schedule 3.

• (3) This paragraph applies where—

• (a) under an agreement entered into, by or on behalf of the landlord or a superior landlord, before the coming into force of these Regulations, qualifying works are carried out at any time on or after the date that falls two months after the date on which these Regulations come into force; or

• (b) under an agreement for a term of more than twelve months entered into, by or on behalf of the landlord or a superior landlord, qualifying works for which public notice has been given before the date on which these Regulations come into force are carried out at any time on or after that date.

• (4) Except in a case to which paragraph (3) applies, and subject to paragraph (5), where qualifying works are not the subject of a qualifying long term agreement to which section 20 applies, the consultation requirements for the purposes of that section and section 20ZA, as regards those works—

• (a) in a case where public notice of those works is required to be given, are those specified in Part 1 of Schedule 4;

• (b) in any other case, are those specified in Part 2 of that Schedule.

• (5) In relation to a RTB tenant and particular qualifying works, nothing in paragraph (1), (2) or (4) requires a landlord to comply with any of the consultation requirements applicable to that agreement that arise before the thirty-first day of the RTB tenancy.

SCHEDULE 1 — CONSULTATION REQUIREMENTS FOR QUALIFYING LONG TERM AGREEMENTS OTHER THAN THOSE FOR WHICH PUBLIC NOTICE IS REQUIRED

Notice of intention

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• (1) The landlord shall give notice in writing of intention to enter into the agreement—

• (a) to each tenant; and

• (b) where a recognised tenants' association[^f00021] represents some or all of the tenants, to the association.

• (2) The notice shall—

• (a) describe, in general terms, the relevant matters or specify the place and hours at which a description of the relevant matters may be inspected;

• (b) state the landlord’s reasons for considering it necessary to enter into the agreement;

• (c) where the relevant matters consist of or include qualifying works, state the landlord’s reasons for considering it necessary to carry out those works;

• (d) invite the making, in writing, of observations in relation to the proposed agreement; and

• (e) specify—

• (i) the address to which such observations may be sent;

• (ii) that they must be delivered within the relevant period; and

• (iii) the date on which the relevant period ends.

• (3) The notice shall also invite each tenant and the association (if any) to propose, within the relevant period, the name of a person from whom the landlord should try to obtain an estimate in respect of the relevant matters.

Inspection of description of relevant matters

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• (1) Where a notice under paragraph 1 specifies a place and hours for inspection—

• (a) the place and hours so specified must be reasonable; and

• (b) a description of the relevant matters must be available for inspection, free of charge, at that place and during those hours.

• (2) If facilities to enable copies to be taken are not made available at the times at which the description may be inspected, the landlord shall provide to any tenant, on request and free of charge, a copy of the description.

Duty to have regard to observations in relation to proposed agreement

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Where, within the relevant period, observations are made in relation to the proposed agreement by any tenant or recognised tenants' association, the landlord shall have regard to those observations.

Estimates

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• (1) Where, within the relevant period, a single nomination is made by a recognised tenants' association (whether or not a nomination is made by any tenant), the landlord shall try to obtain an estimate from the nominated person.

• (2) Where, within the relevant period, a single nomination is made by only one of the tenants (whether or not a nomination is made by a recognised tenants' association), the landlord shall try to obtain an estimate from the nominated person.

• (3) Where, within the relevant period, a single nomination is made by more than one tenant (whether or not a nomination is made by a recognised tenants' association), the landlord shall try to obtain an estimate—

• (a) from the person who received the most nominations; or

• (b) if there is no such person, but two (or more) persons received the same number of nominations, being a number in excess of the nominations received by any other person, from one of those two (or more) persons; or

• (c) in any other case, from any nominated person.

• (4) Where, within the relevant period, more than one nomination is made by any tenant and more than one nomination is made by a recognised tenants' association, the landlord shall try to obtain an estimate—

• (a) from at least one person nominated by a tenant; and

• (b) from at least one person nominated by the association, other than a person from whom an estimate is sought as mentioned in paragraph (a).

Preparation of landlord’s proposals

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• (1) The landlord shall prepare, in accordance with the following provisions of this paragraph, at least two proposals in respect of the relevant matters.

• (2) At least one of the proposals must propose that goods or services are provided, or works are carried out (as the case may be), by a person wholly unconnected with the landlord.

• (3) Where an estimate has been obtained from a nominated person, the landlord must prepare a proposal based on that estimate.

• (4) Each proposal shall contain a statement of the relevant matters.

• (5) Each proposal shall contain a statement, as regards each party to the proposed agreement other than the landlord—

• (a) of the party’s name and address; and

• (b) of any connection (apart from the proposed agreement) between the party and the landlord.

• (6) For the purposes of sub-paragraphs (2) and (5)(b), it shall be assumed that there is a connection between a party (as the case may be) and the landlord—

• (a) where the landlord is a company, if the party is, or is to be, a director or manager of the company or is a close relative of any such director or manager;

• (b) where the landlord is a company, and the party is a partner in a partnership, if any partner in that partnership is, or is to be, a director or manager of the company or is a close relative of any such director or manager;

• (c) where both the landlord and the party are companies, if any director or manager of one company is, or is to be, a director or manager of the other company;

• (d) where the party is a company, if the landlord is a director or manager of the company or is a close relative of any such director or manager; or

• (e) where the party is a company and the landlord is a partner in a partnership, if any partner in that partnership is a director or manager of the company or is a close relative of any such director or manager.

• (7) Where, as regards each tenant’s unit of occupation and the relevant matters, it is reasonably practicable for the landlord to estimate the relevant contribution attributable to the relevant matters to which the proposed agreement relates, each proposal shall contain a statement of that estimated contribution.

• (8) Where—

• (a) it is not reasonably practicable for the landlord to make the estimate mentioned in sub-paragraph (7); and

• (b) it is reasonably practicable for the landlord to estimate, as regards the building or other premises to which the proposed agreement relates, the total amount of the landlord’s expenditure under the proposed agreement,

each proposal shall contain a statement of that estimated expenditure.

• (9) Where—

• (a) it is not reasonably practicable for the landlord to make the estimate mentioned in sub-paragraph (7) or (8)(b); and

• (b) it is reasonably practicable for the landlord to ascertain the current unit cost or hourly or daily rate applicable to the relevant matters,

each proposal shall contain a statement of that cost or rate.

• (10) Where the relevant matters comprise or include the proposed appointment by the landlord of an agent to discharge any of the landlord’s obligations to the tenants which relate to the management by the landlord of premises to which the agreement relates, each proposal shall contain a statement—

• (a) that the person whose appointment is proposed—

• (i) is or, as the case may be, is not, a member of a professional body or trade association; and

• (ii) subscribes or, as the case may be, does not subscribe, to any code of practice or voluntary accreditation scheme relevant to the functions of managing agents; and

• (b) if the person is a member of a professional body or trade association, of the name of the body or association.