Section 20 Consultation Explained for Leaseholders and Directors

Section 20 of the Landlord and Tenant Act 1985 requires landlords, and managing agents acting for them, to consult leaseholders before carrying out expensive works or entering long-term contracts that will be paid for through the service charge.

When does it apply?

• Qualifying works: where any one leaseholder's contribution will be more than £250.
• Qualifying long-term agreements: contracts lasting more than twelve months where any leaseholder will pay more than £100 in any year.

The stages for qualifying works

For most major works, consultation has three stages:

• Notice of intention: describes the works and why they're needed, and invites observations and contractor nominations within 30 days.
• Statement of estimates: at least two estimates, at least one from a contractor unconnected to the landlord, with another 30-day observation period.
• Notice of reasons: where the contract goes to a bidder other than the lowest or a leaseholder-nominated contractor, an explanation within 21 days.

Why getting it right matters

Proper consultation protects everyone. Where it is carried out correctly, the full cost of the works can be recovered through the service charge. Where it is incomplete, recovery from each leaseholder may be capped at £250 unless the landlord obtains dispensation from the tribunal, which matters a great deal on a large roof or facade project.

At Westbridge, Section 20 is part of how we plan works from the start. Leaseholders get clear notices, real answers to their observations and a realistic timetable.