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Payment for Major Works

Major Works contracts can take over two years to complete. EastendHomes will not know the final costs until all the work is finished and all the contractors and professional fees have been paid. However, in most cases we would expect the final cost to be near to the estimated cost. We will then issue you with a Final Account invoice that clearly states the cost to you. A full set of our accounts will be available for you to inspect.

Your lease sets out your obligation to pay towards the costs of carrying out our repairing obligations. We will calculate your contribution by reviewing the contractor’s priced works specification. We will deduct any works that you will not be charged for such as internal works to tenanted properties.

We then apportion the costs by Gross Value (similar to the old Rateable Value) in line with your lease. These calculations will tell us the amount we can charge you. If you purchased your property through the Right to Buy in the five years before the start of the works contract, we may not be able to charge you the full amount. This is because we can only charge you for works that were set out in your Section 125 offer letter. The Section 125 offer letter would have been sent to you by your landlord (either the Council or more recently EastendHomes).

Providing Assistance to Leaseholders

We acknowledge that paying for major works can put a significant financial burden on many leaseholders. Whilst we are unable to waive any charges, we do offer a number of repayment options. If you are worried about how you will be able to pay for the works, make an appointment to see an Officer from the Leasehold Services Team, who will discuss the repayment options with you.

 

Payment in full - Some leaseholders may choose to pay for the cost of the works in full or by adding the payment to their existing mortgage. Leaseholders who pay the cost of works in this way will be given a 5% discount.

 

Interest free Mortgage by Direct Debit - Leaseholders may repay the cost of works by direct debit over 24 months interest free installments.This period may be extended at the discretion of EastendHomes in cases of hardship. If the repayments are defaulted the debt will revert to an interest mortgage at base rate + 1%. This option is open to all leaseholders. The mortgage will be noted at Land Registry as a charge on the property. We will not charge a mortgage fee to set up the mortgage. A Land Registry fee for the registration of the mortgage will be payable by the leaseholder before the mortgage starts.

 

Interest-only Mortgage - A leaseholder can just pay the interest on the capital until such time that they are able to make the capital payment or when the lease is transferred or the property sold (whichever happens first). The mortgage is only available for resident leaseholders who do not have any other mortgage or loan registered on the property.The aim is to keep repayments as low as possible. The mortgage will be noted at Land Registry as a charge on the property. We will not charge a mortgage fee to set up the mortgage. A Land Registry fee for the registration of the mortgage will be payable by the leaseholder before the mortgage starts.

 

Shared Appreciation Mortgage - This type of mortgage is principally aimed at leaseholders of pensionable age who have no means available to them to pay for the cost of the major works. For this type of mortgage the leaseholder must occupy the property and be in receipt of state pension. EastendHomes will take a small financial stake in the property, equal to the cost of the works. The value of the property will be established by an independent surveyor. No interest will be paid on the capital sum. On the future sale of the property, it will be re-valued by an independent surveyor and any increase or decrease will be reflected in a proportional increase or decrease in the financial stake held by, and repayable to, EastendHomes.The mortgage will be noted at Land Registry as a charge on the property. The mortgage is only available for resident leaseholders who do not have any other mortgage or loan registered on the property. The aim is to keep repayments as low as possible.The mortgage will be noted at Land Registry as a charge on the property. We will not charge a mortgage fee to set up the mortgage. A Land Registry fee for the registration of the mortgage will be payable by the leaseholder before the mortgage starts.

 

Discretionary Capping - Some leaseholders will be eligible to have the cost of their works capped at no more than £10,000 provided that they fulfil all the following criteria:

  • the property must be the leaseholder’s only or principal home and the leaseholder must occupy the property full time.
  • the leaseholder must be the original Right to Buy purchaser and works were not specified on their S125 notice.
  • the leaseholder must not have any service charge arrears.
  • the leaseholder must be in receipt of state pension or other state benefit.