Section 20 of the Landlord and Tenant Act 1985 requires landlords and managing agents to consult leaseholders before committing to major works or long term agreements. Get it wrong and the amount you can recover through the service charge is capped, however necessary the works were. This guide covers when consultation applies, how the process runs and what happens if you skip it.
When does Section 20 apply?
Consultation is triggered in two situations.
- Qualifying works. Building works where any one leaseholder would pay more than £250 through the service charge. Roof repairs, external decoration and lift replacement are common examples.
- Qualifying long term agreements. Contracts running for more than twelve months where any one leaseholder would pay more than £100 in a year. Cleaning contracts, lift maintenance agreements and managing agent appointments can all qualify.
The thresholds apply per leaseholder, not per block. On a small block with uneven apportionments, one flat can cross the £250 line while the others sit below it. Consultation is still required.
How the consultation process works
For qualifying works under a standard consultation, there are two notice stages.
Stage one. Notice of Intention
You serve a Notice of Intention on every leaseholder and any recognised tenants association. The notice describes the proposed works, explains why they are needed and invites written observations. Leaseholders have 30 days to respond, and they can nominate a contractor you must try to obtain an estimate from.
Stage two. Notice of Proposals
Once estimates are in, you serve a second notice setting out at least two estimates and summarising the observations received at stage one. This opens another 30 day window for observations. At least one estimate must come from a contractor wholly unconnected with the landlord.
Award
You must have regard to the observations received. If the contract is not awarded to the lowest estimate or to a nominated contractor, you must give written reasons within 21 days of entering the contract.
What happens if you do not consult?
Recovery is capped at £250 per leaseholder for works and £100 per year for long term agreements. On a £80,000 roof project across 20 flats, that is the difference between recovering the full cost and recovering £5,000. The cap applies even where the works were urgent and properly procured.
The First tier Tribunal can grant dispensation from consultation, and often does for genuine emergencies. Dispensation is discretionary, though, and the application takes time and evidence. Treat it as the exception, not the plan.
Practical points that catch agents out
- Keep proof of service for every notice. Disputes about whether a notice arrived are common at tribunal.
- Check aggregation. A programme of connected works can be treated as one set of qualifying works even if you tender it in stages.
- Log every observation and respond to it. Having regard to observations means being able to show you considered them.
- Watch the clock on estimates. Prices lapse, and a stale estimate served at stage two invites challenge.
How PropLink handles Section 20
PropLink runs the consultation as a managed process rather than a folder of Word documents. Each stage carries a live 30 day clock, served notices are stored immutably, observations are logged against the case, and the consultation links through to the work order that delivers the works. Threshold checks run across schedules so aggregation risks surface early. Read more on the Section 20 consultations feature page.
Section 20 is not difficult, but it is unforgiving. A clean paper trail, honest responses to observations and respect for the two 30 day windows will carry you through almost every consultation without drama.