In the opening months of 2021, contractors began reporting shortages and rapid price rises across building materials, with timber, steel and roofing products among the hardest hit. For anyone running a major works programme on a block of flats, that created a particular problem: the estimates set out in a Section 20 consultation could be out of date before the contract was signed.
Why it matters for Section 20
Under section 20 of the Landlord and Tenant Act 1985 and the Service Charges (Consultation Requirements) (England) Regulations 2003, leaseholders are consulted on estimates before the contract is placed. If prices then move so far that the contract no longer matches what was consulted on, the landlord can face questions about whether the consultation still holds.
What we did differently
- Shorter gaps. We tightened the time between tender returns and the statement of estimates, so the figures leaseholders saw were current.
- Clear provisional sums. Where a material price was genuinely uncertain, it was shown as a provisional sum, not hidden in a lump sum.
- Tender validity. We asked contractors to state how long their prices were held, and planned the consultation around that period.
- Normalised returns. Every tender was adjusted to a common basis before comparison, so the cheapest headline price was not mistaken for the best value.
The lesson
A Section 20 consultation is only as robust as the estimates in it. In a moving market, the surveyor’s job is to keep the figures current and the uncertainty visible, so leaseholders are consulted on the real cost. The RICS Black Book guidance on tendering strategies covers the approach.
See our Major Works service, and how two mansion blocks were tendered and delivered under budget.