By 2023, rising costs had pushed service charges to the top of many leaseholders’ concerns, and major works were being scrutinised as never before. For a landlord or managing agent, a correctly run Section 20 consultation is the difference between recovering the cost of the works and arguing about it at the tribunal.
When it applies
Under section 20 of the Landlord and Tenant Act 1985, consultation is required for qualifying works where any one leaseholder’s contribution would be more than £250. The steps are set by the Service Charges (Consultation Requirements) (England) Regulations 2003.
The stages for most major works
- Notice of intention. Describes the works, explains why they are needed, and invites observations and nominations of contractors, with at least 30 days to respond.
- Tender. Estimates obtained, including from any leaseholder’s nominee where the regulations require.
- Statement of estimates. At least two estimates set out, with a summary of the observations received and the landlord’s response, again with 30 days for comment.
- Notice of reasons. If the contract does not go to the lowest estimate or to a nominated contractor, reasons must be given within 21 days of entering into it.
What if it goes wrong?
If the requirements are not met, each leaseholder’s contribution can be limited to £250 unless the First-tier Tribunal grants dispensation. Dispensation is possible, but it is uncertain, slow and can come with conditions. It is far better to get it right first time.
Our approach
We run Section 20 as part of the major works appointment: notices drafted, tenders returned and normalised, observations answered in writing, and leaseholders kept informed as the works proceed. See our Major Works service, and how two mansion blocks were consulted on, tendered and delivered.