Section 20 consultation: thresholds, stages and timescales
Last reviewed · owner Mike Fellows · general information, not legal advice
Section 20 of the Landlord and Tenant Act 1985 limits what a landlord can recover through the service charge unless leaseholders were consulted first. The thresholds are more than £250 falling on any one leaseholder for qualifying works, and more than £100 per leaseholder per year for a qualifying long-term agreement. Consultation runs in stages with 30-day windows, and skipping it caps recovery at those figures unless a tribunal grants dispensation.
When does section 20 consultation apply?
In two situations: qualifying works to the building or estate, and qualifying long-term agreements, which are contracts for works or services running for more than twelve months. It applies to anyone recovering the cost through a variable service charge, which includes residents' management companies and right-to-manage companies, not just traditional freeholders. The duty is owed before the money is committed. Consulting after the contract is signed is not consultation, it is notification, and the cap treats it accordingly.
What are the financial thresholds?
For qualifying works: consultation is required where the works would cost any one leaseholder more than £250 through the service charge. For qualifying long-term agreements: where any leaseholder would pay more than £100 in any accounting year. Both thresholds are per leaseholder, not per contract. The trigger is the highest individual contribution, so a small block reaches £250 on a much smaller job than a large one, and an uneven apportionment can trigger consultation that an equal split would not.
What are the stages, and how long does each take?
For works under the standard route: first a notice of intention, describing the proposed works and inviting observations and contractor nominations, open for 30 days. Then estimates are obtained, which must include at least one from a leaseholder-nominated contractor where one was put forward. Then a statement of estimates with a summary of the observations received, open for another 30 days. If the contract goes to a contractor who was neither the cheapest nor nominated, a notice of reasons follows within 21 days of entering it. The statutory windows alone make the process a minimum of two months, and a realistic programme allows three. Long-term agreements follow their own two-stage version of the same shape under the 2003 consultation regulations.
What happens if consultation is skipped or done badly?
Recovery is capped at £250 per leaseholder for the works, or £100 per year under the agreement. The balance is simply not recoverable through the service charge, however necessary the work was and however good the price. The escape route is dispensation from the First-tier Tribunal under section 20ZA, which can be sought in advance for genuine urgency or after the fact. Tribunals focus on whether leaseholders were actually prejudiced by the failure, and conditions or costs can attach even when dispensation is granted. A clean paper trail is cheaper than the application, every time.
Sources
- Landlord and Tenant Act 1985, s.20 (1985)
- Landlord and Tenant Act 1985, s.20ZA (1985)
- The Service Charges (Consultation Requirements) (England) Regulations 2003 (2003)
This page is general information for property professionals, not legal advice. For a decision that matters, take advice on your specific facts.