28.1  Leaseholders196

28.1.1  The Authority agrees that the Contractor shall exercise its functions in relation to the discharge of the Authority's obligations under the Leaseholder Leases including the procuring of the carrying out of the Works and the Services and other works and services necessary to ensure compliance by the Authority with its covenants in the Leaseholder's Leases and the collection of service charges payable by the Leaseholders in respect of the Works and the Services and such other works and services.

28.1.2  The Contractor shall in exercising the functions referred to in clause 28.1.1 (Leaseholders) ensure:

(a)  that the Works and such other works are carried out and the Services or such other services are provided as are necessary to comply with the landlord's covenants in the Leaseholder's Leases;

(b)  compliance with all provisions in Sections 19 and 20 of the Landlord and Tenant Act 1985 (as amended by Section 151 of the Commonhold and Leasehold Reform Act 2002) in carrying out any works (including the Works), providing any services (including the Services) and making any service charge demands in relation to the Leasehold Dwellings.

(c)  that the Works and Services and any other services or works are phased to ensure the full cost of the Works and Services or any other works or services potentially recoverable under terms of the Leases is lawfully recoverable from Leaseholders provided that where such full cost is not recoverable the Authority shall either:-

(i)  waive its right to full recovery and require the Contractor to fully comply with the Output Specification; or

(ii)  require the Contractor to pursue full recovery and grant such relief as shall be reasonable in the circumstances to the Contractor for the consequences of such compliance.

28.1.3  The Contractor shall in relation to a relevant service charge period under a Leaseholder Lease and not less than 10 Business Days prior to undertaking any Works or Services or other works and/or services to a Leasehold Dwelling notify the Authority of the:‑

(a)  nature of the Works and/or Services or other works and/or services to be undertaken to the Leasehold Dwelling to satisfy the Output Specification (the Proposed Leaseholder Works);

(b)  estimate of the proposed cost of the Proposed Leaseholder Works which will be recoverable from the Leaseholder occupying that Leasehold Dwelling; and

(c)  amount of the estimated Irrecoverable Leaseholder Costs.

28.1.4  The Contractor shall following completion of the Proposed Leaseholder Works in relation to each Leasehold Dwelling notify the Authority of the:-

(a)  actual cost of the Proposed Leaseholder Works; and

(b)  actual cost of the Proposed Leaseholder Works which will be recoverable from the Leaseholder (the Recoverable Leaseholder Costs); and

(c)  actual amount of Irrecoverable Leaseholder Costs.

28.1.5  All Recoverable Leaseholder Costs collected by the Contractor shall be paid into an account in the joint names of the Authority and the Contractor held at the Account Bank (the Joint Leaseholder Recovery Account).

28.1.6  The Authority shall be paid no later than the date 6 months after the end of the relevant Contract Year in respect of that relevant Contract Year:

(a)  the Leasehold Recovery Guarantee Sum for the relevant Contract Year; and

(b)  the amount of any Irrecoverable Leaseholder Costs197 for the relevant Contract Year;

whereupon the Contractor shall be paid the Leasehold Recovery Retained Amount.]198

28.1.7  The Contractor shall provide insurance cover for Leasehold Dwellings for each Contract Year in accordance with clause 57 (Insurance) and the Contractor shall be responsible for collecting the insurance premia from Leaseholders.

28.1.8  The provisions of clause 28.6 (Change to Numbers of Dwellings by Tenure) shall apply in re-calculating the Leasehold Recovery Guarantee Sum on any change from a Rented Dwelling to a Leasehold Dwelling or where a Rented Dwelling or Leasehold Dwelling is subject to a disposal of the freehold.

28.1.9  The Contractor may take steps to enforce the terms of any Leaseholder Lease [in accordance with the Tenant and Leaseholder Enforcement Policy].

__________________________________________________________________________________________

196 Provisions will depend upon the existence of leaseholders in the project (and will only be relevant in HRA projects).

197 Whether the Contractor is responsible for costs in excess of the "Mandatory Cap" (as defined in paragraph (c) of the definition) will depend upon the extent to which such are included in the make up of the Unitary Charge

198 Service Charge recovery should generally be dealt with in the same way as rent collection i.e. as a performance standard.  The clause only applies where there is an agreed guarantee of Service Charge recoveries (which may be relevant where there are large numbers of leaseholders in the project and thereby ensuring continuing affordability of the project by the Authority).