Section 20 is the consultation leaseholders must be given before works that will cost any one of them more than £250, or a contract of over a year costing any one of them more than £100 a year. There are usually two stages of notice, each giving at least 30 days for comments, so it takes at least two to three months. Without it, the landlord can usually recover only £250 from each leaseholder unless the tribunal agrees to waive the requirement.
Section 20 of the Landlord and Tenant Act 1985, with the Service Charges (Consultation Requirements) (England) Regulations 2003, requires the landlord or management company to consult leaseholders before carrying out works that will cost any one leaseholder more than £250, or entering into a contract for more than twelve months that will cost any one leaseholder more than £100 a year.
Free for Essex blocks: tell us about the works and we email you a section 20 pack made for your building, with the £250 test, a dated timetable and all three notices drafted.
01The stages for major works
- Notice of intention. Describes the works and why they are needed, and invites observations and the names of contractors leaseholders would like asked to price. Thirty days.
- Estimates. At least two estimates, at least one from a contractor unconnected with the landlord, with a statement summarising the observations received. Another thirty days for observations.
- Notice of reasons. If the contract does not go to the lowest estimate or to a contractor nominated by leaseholders, the reasons are given within 21 days of the contract.
02If consultation is not done
The amount recoverable from each leaseholder is capped at £250 for the works, unless the First-tier Tribunal grants dispensation. Tribunals grant dispensation where leaseholders have not been prejudiced, often on conditions, but it is slower and more expensive than doing it properly the first time.
03How we run it
We plan major works from the reserve fund forecast so they do not arrive as a surprise, run the consultation to the regulations, and send every notice with a plain-English cover letter. Our fee for administering major works is 10% of the works up to £50,000 and 5% above, plus VAT. Our fees.
04Questions
What is the section 20 limit?
£250 per leaseholder for works, and £100 per leaseholder a year for a contract longer than twelve months.
How long does section 20 consultation take?
At least two thirty-day periods for major works, so plan on two to three months before a contract is let.
How long does a section 20 consultation take?
At least two to three months. The notice of intention gives 30 days for observations and nominations, then the statement of estimates gives another 30 days, and the contract can only be placed after that.
Can I refuse to pay for section 20 works?
Not simply by refusing, but you can challenge whether the costs are reasonable, or whether the consultation was done properly, at the First-tier Tribunal. If the consultation was not done properly, your contribution may be capped at £250.
Can I object to a section 20 notice?
Yes. You can send written observations during each 30-day period and nominate a contractor. The landlord must have regard to what you say.
Does a section 20 notice expire?
There is no fixed expiry, but if the works or the contract change significantly from what was consulted on, or a long time passes, a fresh consultation may be needed.
05Guides for directors
- Service charge estimate
- RICS regulated block managers in Essex
- The reserve fund
- Service charge arrears
- Service charge accounts
- Directors' duties in an RMC
- How to choose a managing agent
- A free service charge check
- Service charges explained
- Buildings insurance for blocks
- Fire safety in blocks of flats
- The Directors' Library
- What is block management?
- How to change managing agent
- Residents' management companies
- Right to manage
- Block management fees
- Service charge disputes
- New-build estate fees
- Estate management in Essex