Section 20 consultation: a step-by-step guide for self-managed blocks

When you have to consult

Section 20 of the Landlord and Tenant Act 1985 and the 2003 consultation regulations (2004 in Wales) apply to:

• qualifying works, where any one leaseholder’s share will be more than £250, including VAT; and
• qualifying long-term agreements, lasting more than 12 months, where any one leaseholder pays more than £100 in an accounting year.

If the company does not consult, and the tribunal does not excuse it, it can only recover £250 from each leaseholder for the works (or £100 a year for the agreement). The rest falls on the company.

The four stages for works

This is the usual route for a private block, from Schedule 4 Part 2 of the England regulations.

1. Notice of intention. Describe the works or say where they can be inspected, say why they are needed, invite written comments, and invite each leaseholder to nominate a contractor. Allow 30 days.
2. Estimates. Get estimates, including one from a leaseholder’s nominee where the rules require it. At least two must be supplied, and at least one from a firm with no connection to the company.
3. Statement of estimates. Send leaseholders the amounts of at least two estimates, a summary of the comments received and your responses, and say where all the estimates can be seen. Allow another 30 days for comments.
4. Award. Consider the comments. If you do not pick the lowest estimate or a nominee, send the reasons within 21 days of signing the contract.

What it means for a self-managed block

In a block run by its own company, the directors are usually neighbours, and it can feel over-formal to send notices to each other. The rules still apply, and a leaseholder who disagrees can rely on them later. A well-run consultation also protects the directors: it shows every flat had a say.

Check your lease for how notices may be served. Email is only valid if the lease or the leaseholder’s written agreement allows it, so send by post as well unless you have that consent on file.

What to do now

• Work out each flat’s share of any planned works using the lease percentages, to see if the £250 trigger is crossed.
• Check your cleaning, gardening, lift, fire alarm and insurance broking contracts. If any rolls on after 12 months and costs any flat more than £100 a year, either consult or change it to a fixed term the board renews.
• For emergencies, keep notes and photos of why the work could not wait.

This guide is general information about the law in England and Wales. For advice on a dispute or a dispensation application, speak to a solicitor.

How Freeholdpilot helps

Freeholdpilot works out each flat’s share of a job from the lease percentages and flags when a section 20 threshold is crossed. It then generates the notices, records when each was served, tracks the 30-day periods and stops a contract being awarded before they end.