What is a Section 20 notice?

Section 20 of the Landlord and Tenant Act 1985 requires a landlord to consult leaseholders before spending their money above a set level. The notices are the mechanism for doing it.

It applies to a freeholder, a residents management company, a right to manage company or a managing agent acting for any of them. If you recover the cost through a service charge, you consult.

The purpose is not to give leaseholders a veto. They cannot stop necessary work and they cannot refuse to pay for it. What they get is sight of what is planned, why, what it will cost, and the chance to comment and to nominate their own contractor before anything is signed.

The Act was amended by the Commonhold and Leasehold Reform Act 2002, and the detail sits in the Service Charges (Consultation Requirements) (England) Regulations 2003.

The thresholds, and the arithmetic people get wrong

Two triggers, both measured per leaseholder rather than per project.

Qualifying works. Consultation is required where the contribution from any one leaseholder would exceed 250 pounds including VAT. Roof repairs, window replacement, redecoration of the block, lift renewal.

Qualifying long term agreements. Any agreement with a contractor or supplier lasting more than 12 months where any one leaseholder would pay more than 100 pounds a year including VAT. Cleaning, grounds maintenance, lift servicing, waste collection.

The arithmetic is where people go wrong. A 4,000 pound contract in a ten flat block is 400 pounds each, which triggers consultation. The same 4,000 pound contract in a twenty flat block is 200 pounds each, which does not.

Where the service charge is not split equally, use the flat paying the largest share. If that leaseholder crosses the threshold, you consult, even if nobody else does.

One thing tribunals watch for: splitting a single job into smaller invoices to stay under the threshold. Artificially divided projects get treated as one scheme and the full requirements apply.

The consultation stages

For most qualifying works the process runs in three stages and takes around two months before a contract can be awarded.

Stage one, notice of intention. Describe the proposed works, explain why they are necessary, and invite written observations within 30 days. Leaseholders may also nominate a contractor they want approached.

Stage two, statement of estimates. Obtain at least two estimates. At least one must come from a contractor wholly unconnected to the landlord or the managing agent. Where a leaseholder or a recognised tenants association nominated someone, you have to try to obtain an estimate from them. Send a statement setting out the estimates, summarise the observations received and your response to them, and allow a further 30 days.

Stage three, notice of award. If you do not appoint the lowest estimate, or one from a nominated contractor, you must issue a notice within 21 days of entering the contract explaining why.

Long term agreements follow a similar shape with a public notice stage where the contract value requires it.

What happens if you get it wrong

The penalty is financial and it falls entirely on the landlord.

If qualifying works go ahead without proper consultation, the amount recoverable through the service charge is capped at 250 pounds per leaseholder regardless of what the work actually cost. For long term agreements the cap is 100 pounds per leaseholder per year.

Put numbers on it. A 120,000 pound roof replacement across twenty flats is 6,000 pounds each. Consult properly and you recover it. Fail to consult and you recover 250 pounds each, or 5,000 pounds in total. The remaining 115,000 pounds is yours.

That is why this is a freeholder problem rather than a leaseholder one. The leaseholder who spots a defective consultation gains. The landlord who runs one badly absorbs the difference.

Common failures: starting work before stage two closes, obtaining both estimates from connected contractors, ignoring a nominated contractor, missing the 21 day window on the award notice, or treating a rolling contract as exempt because it predates the current regime.

Dispensation and genuine emergencies

A landlord can apply to the First-tier Tribunal for dispensation from some or all of the consultation requirements. It is granted where the work was genuinely urgent, or where a procedural failure caused no real prejudice to leaseholders.

Two things to understand about it.

Dispensation is a tribunal decision, not something a landlord can declare. Deciding the work was urgent and proceeding is not dispensation, it is a failure to consult that you may later ask to be excused.

The tribunal asks whether leaseholders suffered prejudice, not whether the landlord was inconvenienced. Dispensation is frequently granted, sometimes with conditions such as the landlord bearing the costs of the application. It is not a formality and it is not a planning tool.

Applying retrospectively is normal where an emergency forced immediate action. Applying because you did not leave enough time is a much weaker case.

Section 20B and the 18 month rule

Different section, different problem, frequently confused with the consultation rules.

Section 20B says a leaseholder is not liable for a service charge cost incurred more than 18 months before it is demanded, unless they were notified in writing within that 18 month window that the cost had been incurred and would be charged.

So there are two ways to stay inside it. Demand the money within 18 months of incurring the cost, or serve a written notice inside the window telling leaseholders the cost exists and will be charged later.

This catches out landlords running long projects where invoices arrive over a couple of years and the reconciliation happens at the end. By the time the final account is settled, the earliest costs can be out of time.

A Section 20B notice is cheap to serve and protects the position. Sending one on any long running project is straightforward risk management.

What a freeholder is responsible for

Section 20 sits inside a wider set of obligations. The lease governs the detail, but the pattern in most residential leases is consistent.

• Structure and exterior. Roof, walls, foundations, external windows in many leases, and the common parts.
• Buildings insurance. Placing it and recovering the premium through the service charge.
• Common services. Lifts, lighting, entry systems, cleaning, grounds.
• Fire safety. A current fire risk assessment of the common parts, and compliance with any building safety duties that apply.
• Service charge administration. Budgets, demands in the prescribed form, accounts, and the statutory summary of rights and obligations with every demand.
• Consultation. Section 20, every time the thresholds are crossed.

Read the lease before assuming any of it. Apportionment and repairing obligations vary, and some leases place window or balcony repairs on the leaseholder rather than the freeholder.

Buying a flat with a Section 20 in progress

This is a live issue for anyone buying into a block, and the answer is not to walk away automatically.

The liability follows the property rather than the person. If you complete before the demand is issued, you inherit the bill. Sellers are not obliged to volunteer that a consultation is under way, though the standard leasehold enquiries should surface it.

What to establish before exchange:

• Which stage the consultation has reached, since a notice of intention is far less certain than a statement of estimates.
• The estimated cost attributable to that specific flat.
• Whether a reserve fund exists and how much of the cost it will absorb.
• Whether the works are cosmetic or structural, since structural work tends to overrun.

The usual commercial answers are a price reduction matching the expected bill, or a retention held by solicitors until the final account is known. Both are common and neither is unreasonable to ask for.

What is changing

The thresholds have been 250 pounds and 100 pounds since the 2003 regulations, unchanged through more than two decades of construction inflation. That is why so many routine jobs now trigger a statutory consultation that was designed for major works.

The government has consulted on reform, with proposals including raising the qualifying works trigger to 600 pounds per leaseholder and the long term agreement threshold to 300 pounds a year, alongside wider service charge transparency measures and mandatory qualifications for managing agents.

None of that is in force. The current thresholds still apply, and the government has indicated leaseholders will start to see changes during 2027, subject to secondary legislation.

If you are reading guidance quoting 600 pounds as the trigger, it is describing a proposal.

For owners holding flats across a block, the works cycle is also a letting problem. Scaffolding, noise and restricted access affect what a property earns, and a major works bill lands whether the flat is occupied or not. Our guides to share of freehold and the Renters' Rights Act cover the ownership and letting sides of that.

This is general information, not legal advice. Consultation requirements turn on the specific lease and the specific works, so take advice before serving or challenging a notice.