Section 20 consultation explained

Before a landlord can charge leaseholders for major works or sign a long-term contract, it usually has to consult them. The rule comes from section 20 of the Landlord and Tenant Act 1985 and the Service Charges (Consultation Requirements) (England) Regulations 2003. Getting it wrong is expensive, and the person who pays for the mistake is the landlord, not the leaseholder.

The two thresholds

Consultation is triggered by what any one leaseholder would pay, not by the total value of the job.

Qualifying works — £250. If any single leaseholder’s contribution to a set of works would exceed £250, consultation is required.

Qualifying long-term agreements — £100. If the agreement runs for more than twelve months and any single leaseholder’s contribution under it would exceed £100 in any accounting period, consultation is required. This catches ordinary things: cleaning contracts, lift maintenance, gardening, door entry maintenance.

A common and expensive misunderstanding is to test the thresholds against the contract value rather than the individual contribution. In a block of forty flats, a £12,000 job is £300 each and needs consultation. A £9,000 job is £225 each and does not.

The stages

For qualifying works the process normally runs in three stages, each with 30 days for leaseholders to make written observations, and a duty on the landlord to have regard to what comes back.

Notice of intention. Describes the proposed works, says why they are necessary, and invites observations and nominations of contractors.

Notice of estimates. Sets out at least two estimates, at least one of which must be from a contractor wholly unconnected to the landlord, and includes any estimate from a leaseholder-nominated contractor. Leaseholders can inspect the estimates free of charge.

Notice of reasons. Required where the landlord does not accept the lowest estimate or a nominated contractor’s estimate. It must explain the choice.

Where there is a recognised tenants’ association, it has its own role in nominating contractors.

Long-term agreements follow a similar but distinct schedule, and agreements awarded under a public procurement process have their own route — since 24 February 2025 the regulations refer to the Procurement Act 2023 rather than the Public Contracts Regulations 2015, and qualifying contracts are advertised on the government’s Find a Tender service.

What happens if consultation is not carried out

The works are not unlawful and can still go ahead. What changes is recovery.

Without consultation, the landlord can recover no more than £250 per leaseholder for qualifying works, or £100 per leaseholder per accounting period for a long-term agreement — however much was actually spent. On a £120,000 roof across forty flats, that is the difference between recovering £120,000 and recovering £10,000.

Dispensation

A landlord that has not consulted properly can apply to the First-tier Tribunal (Property Chamber) under section 20ZA for dispensation from some or all of the requirements.

Since the Supreme Court’s decision in Daejan Investments Ltd v Benson [2013] UKSC 14, the question the Tribunal asks is not whether the landlord behaved well but whether the leaseholders suffered relevant prejudice as a result of the failure. Dispensation is often granted, sometimes on terms — but it is a remedy for emergencies and honest mistakes, not a substitute for the process, and the landlord usually bears the costs of applying.

Where we fit

We run consultations for the buildings we manage: drafting and serving the notices, handling observations, obtaining and presenting estimates, and documenting the decision so it stands up if it is ever questioned. The fee is published in our fee schedule rather than buried in a management agreement.

Ask us about your building

If you are a resident director facing your first major works project, or a leaseholder who has received a notice and does not know what it means, get in touch.