Mercers refurbishment works

Queries have been raised in relation to the need or justification for the roof replacement work.

The need has been identified following a survey undertaken by an external, independent specialist firm (Stace) in accordance with the council’s usual building condition monitoring procedures. The survey concludes that the roof is beyond its expected lifespan and requires replacement. The construction of Mercers commenced in October 1978 and completion was October 1980.

A copy of the report (pdf) was provided to all leaseholders.

We do understand that there is never a good time for leaseholders to incur these costs. It is no longer cost effective to continue repairing a roof that is beyond its expected operational life. Delaying the works will only prolong the difficulties residents are currently experiencing from the degradation of the roof. Delaying the work will also result in increased replacement costs as labour and material prices continue to rise.

We have met the requirements for consultation which is set out in the Section 20 of the Landlord and Tenant Act 1985. The notices have been served, and all leaseholders have been fully consulted in line with these requirements. A valid notice of intention, notice of estimate and award of tender letter has been issued and served correctly, details below:

Notice of intention (pdf) dated 24 July 2023 describing the works proposed and allowing 30 days for consultation which ended on the 25 August 2023, enclosing a nomination form and observation sheet.
Notice of estimate (pdf) dated 3 March 2025, detailing the likely contribution, detailing contractors and five bids returned, allowing 30 days for consultation which ended on the 7 April 2025, enclosing a paragraph B statement, observation sheet with option to have a one-2-one meeting to discuss the works or repayment options and a summary of all observations and responses received in respect of the notice of intention.
Award of tender dated 2 May 2025 via email or dated 8 May 2025 by post, detailing the winning contractor and the reasons why, enclosing a summary of all the observations and responses received in respect of the notice of estimate.

The council follows the section 20 (S20) consultation process which means that we must prepare two proposals based on the estimates received, one of these must be from a contractor who is not connected with the council.

We invited six suitably qualified contractors to submit estimates for those works and supplied five estimates.

The proposal must describe the works that are to be carried out and give the name and address of the contractor and where possible, give your estimated cost. The proposal must include copies of at least two proposals or say where and when you can see them and get copies and invite comments in writing.

We have completed all the obligations under the S20 consultation process. In addition to the requirements, we offer all leaseholders a one-to-one meeting and this is offered within the notice of estimate observation sheet and therefore, the process is and has been followed.

Queries have been raised about the need for, and timing of fire safety works and whether further fire safety inspections are leading to additional scaffolding costs.

The council undertakes fire risk assessment (FRA) in respect of all of its properties, identifying works that need to be completed to meet regulatory requirements, which will have changed since the building was constructed. To avoid disruption and minimise costs, any works required following a FRA are programmed in alongside other planned works wherever possible.

The fire safety works required for Mercers are set out in the FRA and in the schedule of works provided with the S20 notice/consultation provided to all leaseholders: Mercers FRA (pdf)

The FRA has been completed by an external, independent specialist firm (Ridge and Partners LLP).

Some of the fire safety works (fire stopping and compartmentation in the roof space) may not be necessary. Any works that are not necessary will not be undertaken. There will, of course, be no re-charge in respect of any works that are not undertaken

Further inspections are required to determine whether those works are necessary. Those inspections require the erection of a scaffold. Given that a scaffold will be necessary to undertake the roofing works in any event, the further inspections will be undertaken when that scaffold is in place. Had we undertaken those inspections separately, it would have resulted in additional scaffold recharges. Undertaking those inspections alongside the roofing works is reducing, not increasing, scaffold costs.

Queries have been raised as to the classification of the building based on its height. This is relevant because different fire safety standards apply depending on whether a building is above or below 18 meters, and concerns have been raised that the incorrect standard may have been applied in this case, leading to unnecessary works.

Notwithstanding how the building may have been classified previously or in other documents, the council is content that the building is not over 18m in height.

There are three elements to the work the fire engineer is subject to undertake which include inspecting and reviewing the works as they progress. Inspecting existing and reviewing new fire break details and the like. The fire engineer is undertaking essential works and whilst the engineer is on site they can assist with the completion of a EWS1 for the block.

Although, the council is aware this is not a current requirement, as there are complexities surrounding buildings that have large areas of cladding, despite the height, the council is taking the opportunity to future proof and avoid any further requirements should regulations change. This will also support any future sale of a property within the block, as it will satisfy mortgage lenders where it is not clear to them of the risks.

Queries have been raised as to whether these works are necessary, based on a passage in the FRA where the assessors point out that the fire performance characteristics of external walls and cladding are outside of their expertise. The assessors therefore recommend that further advice is taken from experts in this area.

The council has not taken further advice from experts in the fire performance of external walls and cladding because it intends to change the cladding/tiles in any event. It is doing so on account of the dated nature of the materials. Specifically, the materials contain asbestos (that can be hazardous) and have degraded over time compromising their ability to withstand the elements and prevent water ingress. As the tiles contain asbestos, when they become damaged there is a potential risk of exposure, particularly if tiles fall into resident's gardens.

Queries have been raised as to whether the necessary pre-commencement surveys have been undertaken to devise and implement appropriate working methods and practices which protect the health and safety of workers and residents. This is referred to as asbestos survey records of Mercers (pdf) which are provided. This provides information on the cement tiles containing Chrysotile asbestos.

Queries have been raised about the inclusion in the tender of a cost of £1,980 for a fire engineer to attend site as the works progress to inspect fire break details and provide oversight for fire related installations which will enable the future completion of an EWS1 form. The concern is that this additional cost is unnecessary if the building is not subject to EWS1 requirements.

The £1,980 cost is in respect of the work required to inspect fire breaks (discussed above) and other fire related installations, which is required whether or not a EWS1 form is subsequently completed. The tender simply notes that completing these inspections (which are required in any event) will enable an EWS1 form to be completed should one be required at some point in the future. Residents will note that this element of the work equates to a cost of approximately £37.00 per unit, and there is no saving to be achieved by not completing an EWS1 form once these inspections have taken place.

In addition, the complexity surrounding changes for FRA assessors is that FRAs on buildings that have large areas of cladding, despite the height, would result in recommending a full FRAEW (fire risk appraisal of external walls) to be carried out. Therefore, it is advised to obtain a EWS1 alongside these works to future proof and avoid any further required FRAEW recommendations. This is turn will save on additional costs for intrusive checks. An EWS1 will also support any future sale of a property on the estate, as it will satisfy mortgage lenders where it is not clear to them of the risk as well as building insurers.

Queries have been raised about whether these works are only necessary now because the council has not properly maintained the building in the past.

The council has maintained Mercers, including undertaking responsive repairs to the roof. However as explained in the first question above, the roof has now reached the end of its lifespan, is beyond economical repair and requires replacement.

Queries have been raised as to whether the works being undertaken are only being undertaken in response to the Regulator for Social Housing (RSH) issuing the 'building' with a C3 rating. It has been suggested that the works are a rushed or 'knee-jerk' reaction to appease the RSH and would not otherwise be being undertaken.

This query highlights a misunderstanding of how the RSH system operates. C1 and C3 gradings are consumer standard gradings issued by the RSH to landlords. They are not issued in respect of the condition of individual buildings. The ratings cover a wide range of criteria such as tenant safety, repairs, resident engagement and the quality of accommodation.

A C3 grading means that the landlord’s current arrangements (as a whole) are not strong enough and means that the landlord is placed into a 'responsive engagement', which is a cooperative process, short of formal regulatory action, where the RSH and the landlord agree an improvement plan and monitor progress against it. A C1 grading means that the landlord is delivering the required consumer standards.

More information on Harlow’s C3 grading and improvement plan is available in the report to Harlow’s Cabinet (pdf). More information about the RSH and its consumer standard gradings is available on GOV.UK.

For the avoidance of doubt, the works at Mercers are not a reaction to the RSH grading. They have arisen in response to the FRA and the council’s usual building condition monitoring processes.

Queries have been raised around the appointment of the contractor carrying out the works. The concern was that the contractor did not quote the lowest price when compared to other tenders, was not nominated by any leaseholder and was identified in a tender evaluation document dated prior to key dates in the resident consultation process.

None of this is unusual. Price is just one evaluation criteria. Tenders are awarded on the highest combined criteria score based on price and quality of tender submission. That is what happened in this case.

Leaseholders were provided with the opportunity to nominate a contractor as detailed above at the notice of intention stage . Tender evaluation is completed without the awareness of the priced submissions, to ensure complete fairness and transparency for the scoring. So it is not surprising that the successful tender was identified in the consultation process. The council is content that the tender process was legally compliant, fair and transparent. The procurement process is documented (pdf) within the information presented to committee. The information has been made publicly available.

Queries have been raised about whether there should have been a 'sinking fund' or some other advanced payments programme where regular payments are made by leaseholders to the landlord to build up a pot of money to fund works of this type.

There is no such fund in respect of Mercers and there is no obligation on the landlord to create or maintain such a fund. When residents purchased flats in Mercers, they would or should have had solicitors acting for them who would have made 'pre-contract' enquiries as part of the purchase process. If those enquiries had been properly undertaken, residents would have been aware prior to purchase that there was no sinking fund and would have been advised of the implications.

In addition, it is usual practice to have a survey undertaken prior to purchase and, often, to visit the property again prior to exchange. Often lenders will seek a homeowner’s report or structural survey prior to making a mortgage offer. Any outstanding notices and anticipated works are also provided by the council as landlord as part of the lease information pack.

If residents feel they were poorly advised during the purchase process, that is a matter they will need to raise with their advisors. Reference has been made to Schedule G, Clause 3(iv)(2) of leases, which states:
“Any advance payments shall be kept in a separate fund by the council for the future expenditure of a capital nature and shall earn interest.”

It has been suggested that this implies some duty upon the landlord to maintain such a fund. This is incorrect. The clause applies if there is such a fund in operation, it does not require there to be such a fund. There is no such fund at Mercers.

It is not possible for the council to operate a sinking fund for Mercers. The propose of a sinking fund is to accumulate funds for large, long-term maintenance and repairs on the building. Setting up a sinking fund now would not assist leaseholders with the cost of the proposed major works. Consideration needs to be taken for all homeowners if it is financially viable and sustainable and for this reason the council is not proposing to set up such a fund, however, should homeowners wish to consider their options and set up a fund privately that attracts interest this may be a better option for leaseholders.

A query has been raised about the expertise of the team who has scoped, procured and approved the works and about who will be managing the works. A concern has been expressed that the works constitute an improvement, and not a like for like replacement.

The council is content that a combination of experienced council officers and external multi-disciplinary experts have appropriately scoped, procured and approved the works, as can be ascertained from the documents that have been shared through the consultation process and since, all of which are available here.

All major works and planned projects are presented to and agreed by Councillor’s at Committee for consultation to be undertaken with residents. The works were agreed at the Forward Plan number I016232 committee on the 5 February 2025 (pdf). You can also read more information on the decision.

In respect of the specification of the replacement roof, this is in accordance with modern-day design specifications and does not constitute an 'improvement'.

The works will be managed by the council's Housing Operations - Property Project Manager Ian Smith and the Site Manager Lee Morgan for Chas Berger. Residents can raise any concerns by contacting the Resident Liaison Officer Sulei Hasan (RLO) on 07946 194 094.

Any works undertaken to Mercers are funded by the Council and are recoverable from leaseholders on a 1/54th of the total cost basis, as set out in your lease agreement.

The council offers various repayment options to support leaseholders. There are various methods based on an individual’s circumstances. Where a person does not wish to take advantage of the loan options offered by the council they can seek their own independent financial advice via their mortgage company (should they have one) or approach high street bank, building society or accredited financial advisor.

If you would like more information available on our major works page, to discuss the assistance the council can provide, please email homeownership@harlow.gov.uk.

The council’s own reserve funds (not to be confused with a reserve or sinking fund for a specific property) are required to underwrite the operations and risks that the council is responsible for across its full range of functions.

There are statutory requirements that control the levels and use of council reserves to ensure an adequate contingency to guard against known and unknown financial risks, and to provide a degree of security against any borrowing that it takes out and/or investments that it makes. This would include, for instance, the cost of funding the works to Mercers.

The council is, however, under a duty to protect the public purse which means that it has to take steps to recover costs it has paid out wherever it is able to do so, which includes recovering the costs of works undertaken to buildings it owns where leaseholders share liability for those costs.

More information on council reserves (pdf).

If you have any concerns once you receive your invoice from the council, then please contact the Income Recovery Team on email homeownership@harlow.gov.uk or by phoning 01279 446241. The Senior Recovery Officer will be able to discuss the options available from the council and alternative agencies for support and assistance.

The council has internal processes for recovery and has a robust recovery method.

If a repayment plan cannot be agreed, the council will ultimately go through a County Court process to obtain a 'judgment debt', which will adversely affect your credit rating. Judgement debts can then be enforced by way of warrants of control (whereby the debtors assets are seized to satisfy the debt), attachment of earnings (whereby the debt is deducted from the debtors wages), third party debt orders (whereby sums owed to a debtor that are in the hands of a third party are frozen and seized for the benefit of the creditor) or a charging order (whereby a charge is placed on the debtors property, meaning that it can’t be sold until the debt is satisfied).

In certain cases, the council can also apply to the court for an order of sale of the property, following a charging order being obtained, in order to satisfy the debt. These methods would only ever be a measure of last resort, and you are encouraged to contact the Homeownership team as above to discuss repayment options or financial difficulties.

As previously advised the First Tier Tribunal handle applications in relation to leasehold disputes. . More information on how to make an application to the First Tier Tribunal.

You can also consider contacting LEASE who provide free legal advice.