Section 20 is the process a landlord must follow before charging leaseholders for significant work or signing a long contract. Get it right and the cost is recoverable. Get it wrong and most of it is not.
There are two, and they are low.
Qualifying works: consultation is required if the work will cost any one leaseholder more than £250, including VAT. Note that this is per leaseholder, not per building. In a block of forty flats, a £12,000 job can cross it.
Qualifying long-term agreements: consultation is required for any agreement lasting more than twelve months that will cost a leaseholder more than £100 a year, including VAT. Lift maintenance, cleaning, grounds contracts — all routinely caught.
Where service charges are not split equally, the thresholds apply to the flat paying the largest share.
Notice of intention. Issued before tenders are invited. It describes the proposed work and invites leaseholders to comment and to nominate contractors.
Statement of estimates. Issued once costs are in. It sets out the estimates obtained, including from any contractor leaseholders nominated, and invites observations.
Notice of award. Issued once a contractor has been chosen, explaining the reasons for the choice.
Each notice carries its own response period, and the whole process usually takes several months. Work carried out under an existing long-term agreement has only one stage, since the contractor is already appointed.
The recoverable amount is capped — £250 per leaseholder for qualifying works, £100 per leaseholder for a long-term agreement. The rest cannot be charged.
A landlord can apply to the tribunal for dispensation, meaning permission not to have consulted. Tribunals do grant it, particularly for genuine emergencies, but it is an application with a cost and an outcome nobody can guarantee. It is not a plan.
Read the notices. They are not junk mail, and the observation periods are the one point at which you have formal input.
Nominate a contractor if you know a good one. You are entitled to, and a nomination obliges the landlord to try to obtain an estimate from them.
Ask why the chosen contractor won. The cheapest tender is not always the right one, but the reasoning should exist and should make sense.
And watch for salami-slicing — splitting one job into several to stay under £250 each. It is not legitimate, and tribunals look at the substance of the work rather than how the invoices were arranged.
In our experience the failures are rarely deliberate. They are missed deadlines, notices sent to an old address, a long-term agreement signed without anyone realising it needed consulting on. The consequence lands on the leaseholders and the directors, not on the agent who made the error.
If you have had a Section 20 that felt rushed, or a large bill that arrived without consultation, it is worth a second opinion. Send it over and we will tell you what we think.
This is general guidance, not legal advice. Take advice on your own consultation before relying on it.
Send us your last service charge budget. We'll tell you honestly whether you're getting value — no obligation either way.