Section 20 Consultation for Major Works: Notices, Timeline and Estimates

When section 20 consultation applies

Section 20 of the Landlord and Tenant Act 1985 limits what a landlord can recover through service charges. Unless the consultation requirements are met, or the First-tier Tribunal dispenses with them, each leaseholder's contribution is capped.

Two triggers matter. Qualifying works are works on a building or any other premises. Consultation applies once any one leaseholder's share of their cost is more than £250. Roof, window and external redecoration schemes often cross that line.

A long-term agreement is one for a term of more than twelve months. Consultation applies to it once any leaseholder's share in an accounting period is more than £100. The steps for those agreements differ from the ones below.

The section 20 consultation process in three stages

For works that do not need a public notice, the steps sit in Part 2 of Schedule 4 to the 2003 regulations. There are two notices with a 30-day window each, then a reasons notice where one is needed.

The 30 days run from the date of the notice. The two windows alone take at least 60 days, before you count the time to obtain estimates. Where public notice of the works is required, a different route applies and there is no nomination stage.

Consultation only works if the estimates are credible. Section 20 major works contractors earn their place by pricing one specification, so leaseholders compare like with like.

Step 1 of 1

Stage 1: the notice of intention and nominations

The landlord gives notice in writing to each leaseholder, and to a recognised tenants' association where one represents some of them. The notice must do four things:

1. Describe the works in general terms, or say where a description can be inspected.
2. State the landlord's reasons for considering the works necessary.
3. Invite written observations, with an address, and say they must arrive within 30 days.
4. Give the date on which that period ends.

The notice must also invite each leaseholder and the association to propose a firm from which the landlord should try to obtain an estimate. The landlord must have regard to observations made in time. Any place of inspection must be reasonable and the description free to read.

Stage 2: estimates that survive consultation

The landlord obtains estimates and sends a free statement of at least two of them. The statement also summarises any observations received and the landlord's response. All the estimates must be open to inspection.

At least one estimate must come from a person wholly unconnected with the landlord. The regulations treat a company director or manager, or their close relative, as connected. If the landlord obtained an estimate from a nominee, it must be one of those in the statement.

A second notice then says where and when the estimates can be inspected, invites comments and gives the end date of a further 30 days. The landlord must have regard to what comes back.

Leaseholders read these estimates closely, so they need to be comparable. Four things make them so:

• One written specification that every firm prices.
• The same assumptions on scaffold, access and working hours.
• Provisional sums marked as such, with what would change them.
• A programme that shows when residents are affected.

We price from the surveyor's report or a maintenance plan, so you can use the figures in the statement. As section 20 major works contractors, we offer a free specification and estimate. Send us the report or photos of the block.

If consultation is skipped: the £250 cap and dispensation

Without consultation, or dispensation, each leaseholder whose share would exceed £250 pays no more than £250.

The landlord can ask the First-tier Tribunal to dispense with the requirements. The tribunal may do so if satisfied that it is reasonable. In Daejan Investments v Benson in 2013 the Supreme Court said the main question is whether leaseholders suffered real prejudice from the breach.

Leaseholders must identify some credible prejudice. The landlord then has to answer it. The tribunal can grant dispensation on terms, such as reducing the sum claimed and paying the leaseholders' reasonable costs.

Dispensation is not available for works to which section 20D applies. If your scheme involves fire safety remediation, take advice on which regime governs it.

Planning major works with residents at home

The consultation fixes the price. The programme decides how the next months feel for the people who live in the block. Plan these before the notice goes out, because leaseholders will ask.

Scaffold, deliveries, noise and waste are the usual complaints. Residents want to know the dates, the working hours and who to call. A single main contract for roof, windows and decoration avoids three firms blaming each other. For a roof and facade replacement, agree the scaffold dates with residents first.

We have refurbished in a building that stayed occupied. At Kensington Olympia, a 400 sq m penthouse refurbishment in a fully occupied building, we kept disruption to residents low. The building managers were happy with the delivery, noise and waste management. It finished on time with zero snags. That was a penthouse, not block major works.

Every project we have delivered has finished ahead of programme and on budget. Major works are one part of landlord works we take on across London and the UK.