Major Works and Section 20 Consultation, Explained
Before a large repair can be charged in full to the service charge, the law requires a consultation. This is what triggers it, what the notices are for, what happens if it is skipped, and what we charge to run it.
When Section 20 Applies
Section 20 of the Landlord and Tenant Act 1985 and the Service Charges (Consultation Requirements) (England) Regulations 2003 set out a consultation that has to be carried out before certain costs can be passed on in full through the service charge. Two thresholds trigger it, and both are about what one leaseholder pays rather than about the size of the bill overall.
A qualifying long-term agreement is a contract of more than twelve months, so a lift maintenance contract or a grounds maintenance contract can require consultation even though no single visit is expensive. The consultation is about the process, not about permission: leaseholders are entitled to be told what is proposed and to have their observations considered, and the landlord still makes the decision.
The Three Notices
Where no public notice is required, the consultation runs in three stages. Each one has a job, and missing any of them is what puts recovery at risk.
1. Notice of Intention
The first notice describes the works, says why they are needed, and invites written observations. Leaseholders have 30 days to respond and may nominate a contractor they would like asked to quote.
2. Statement of Estimates
At least two estimates are obtained, one of them from a contractor wholly unconnected to the landlord, and a nominee proposed by leaseholders must be approached. The estimates are made available with a second notice, and there is a further 30 days for observations.
3. Notice of Reasons
Where the contract does not go to the lowest estimate or to a leaseholder's nominee, a third notice explains the reasons for the choice and responds to the observations received. It is issued within 21 days of entering the contract.
What Happens If the Consultation Is Not Carried Out
The sanction falls on recovery, not on the works. If the consultation requirements are not met and no dispensation is granted, the amount recoverable from each leaseholder is capped at £250 for qualifying works, or £100 in an accounting period under a qualifying long-term agreement, whatever the work actually cost. The difference stays with the landlord.
Section 20ZA lets the First-tier Tribunal dispense with the requirements. Since Daejan Investments Ltd v Benson the question the tribunal asks is what prejudice the leaseholders actually suffered because of the failure, rather than how serious the breach looks in itself, and dispensation is regularly granted on conditions. It is not a formality and it is not free, which is why it is better used for genuine emergencies than as a way of catching up.
How Our Fees Work
Major works are charged separately from the management fee, and the rate is published rather than quoted case by case. Our price list sets the Section 20 management fee at 4 to 10 per cent of total project cost, or £180, and a Section 20ZA application at £180. The percentage reflects the scale and complexity of the project; the flat fee applies to the smaller schemes where a percentage would not cover the work. Both figures are in the price list below, which is the same document published on our policies page.
Contractor costs, professional fees for a surveyor or contract administrator where one is needed, and any tribunal fees are separate and are shown as their own lines in the consultation documents rather than absorbed into ours.
Common Questions
What Counts as Major Works?
There is no list of qualifying jobs. The test is the cost, not the label. If the work would leave any single leaseholder contributing more than £250 through the service charge, it is qualifying work and the consultation applies, whether that is a roof, a lift, redecoration or a drainage repair.
Can I Refuse to Pay for Major Works?
Not on the basis of disagreeing with the decision. What the lease requires you to pay, you pay. What you can do is test whether the charge is reasonable and whether the consultation was carried out properly. Both are questions for the First-tier Tribunal (Property Chamber), and it is designed to be used without a solicitor.
Can I Put Forward My Own Contractor?
Yes. The Notice of Intention invites nominations, and a contractor nominated by leaseholders has to be approached for an estimate. Nominating one does not oblige anyone to appoint them, but if they are not appointed the reasons have to be given in writing.
What If the Consultation Is Not Carried Out?
The recoverable contribution is capped at £250 per leaseholder for qualifying works, and £100 per leaseholder per accounting period under a qualifying long-term agreement, however much the work actually cost. The only way past the cap is a dispensation from the tribunal under section 20ZA, which turns on whether leaseholders were prejudiced rather than on whether the breach was technical.
Does the Reserve Fund Pay for It?
Where the lease provides for a reserve fund and there is money in it, that is what it is for, and drawing on it reduces or removes the one-off demand. The consultation still has to happen: the threshold is about what each leaseholder contributes to the works, not about which pot the money comes out of.
How Long Does the Process Take?
The two observation periods are 30 days each and they are minimums, so the consultation itself is rarely shorter than about three months before a contract can be entered into. Specifying the work, obtaining estimates and scheduling a contractor sit on top of that. Emergency works that cannot wait are a separate question, and they are where a section 20ZA application usually arises.
Can the Landlord Split the Work Up to Stay Under £250?
No. Artificially dividing a single scheme into parcels to dodge the threshold is not a route round the regulations, and a tribunal looks at the substance of what was done.
Where We Fit
For the developments we manage we specify the work with the board, obtain the estimates, issue and track the notices, collate the observations and answer them, and hold the contractor to the programme once work starts. Where a scheme needs a surveyor or a contract administrator we help the board appoint one; we do not carry out the design or the construction ourselves.
If you are a director of a resident management company facing a first major works project, or a leaseholder who has had a notice and wants to understand it, talk to us. If your question is about a figure on a statement you have already had, the accounts team is the faster route.
Service Charge & Accounts Queries
Questions about a service charge demand, your statement, a payment or the year-end accounts go straight to our accounts team rather than through general enquiries.
Email accounts@plymouthblockmanagement.com
Quoting your development and flat number gets an answer fastest. If your query is about a cost you want explained, say which line on the statement and we will come back with the invoice behind it. Leaseholders also have a statutory right to a summary of costs under section 21 of the Landlord and Tenant Act 1985.