Section 20 Major Works: What are Leasehold Rights?

If you’re a leaseholder in a flat, understanding your rights under Section 20 of the Landlord and Tenant Act 1985 is key, especially when it comes to costly building maintenance. 

Section 20 sets out legal consultation requirements that landlords must follow before carrying out major works. These rules are in place to protect leaseholders from unexpected or unreasonable charges and to ensure transparency in how service charges are managed.

However, the protection only works if it is enforced. Consider a common scenario: a managing agent issues a Stage 1 Notice of Intention for external decoration works, then awards the contract before the Stage 2 observation period has closed. Each of the six leaseholders is billed £3,800, their share of a £22,800 contract. The leaseholders challenge the charges at the First-tier Tribunal. The Tribunal finds the consultation requirements were not followed and caps each leaseholder’s liability at £250. Total saving across the block: just over £21,000. The procedural error was a single missed deadline. 

In this article, we’ll explore leaseholders rights when it comes to Section 20 Major Works, and what the consultation process is for this.

What Is a Section 20 Notice?

Section 20 is a legal framework that requires landlords to notify and consult all leaseholders before carrying out certain major works and seeking service charges. Section 20 notices are typically required when major works would cost any one contributing leaseholder:

• Over £100 annually through a qualifying long-term agreement, or;
• Over £250 where the long-term agreement includes provision for the carrying out of works to the property.

The aim of the consultation is simple: to give leaseholders a say in works that affect their building and service charge bills. These works can include substantial repairs, external redecorations, roof replacements, or other significant structural updates.

By law, landlords must follow a specific process to notify leaseholders, share cost estimates, and give opportunities for feedback. If they fail to do so correctly, they may be restricted to recovering just £100 per leaseholder, no matter how much the work costs.

Leaseholder Rights During Section 20 Consultations

When it comes to major works, leasehold rights are critical. As a leaseholder, you have the legal right to be consulted before major works begin. This includes the right to:

• Receive formal notices outlining the proposed work.
• Inspect estimates and documentation related to the planned works.
• Nominate alternative contractors to be considered for the job.
• Submit written feedback or objections at each stage of the consultation.
• Only pay over £250 for major works (or £100 if your long-term agreement includes a works provision) if you were correctly consulted beforehand.

Landlords must take these steps seriously. If the correct procedures are not followed, they risk losing the right to fully recover costs, even if the works were necessary.

The Section 20 Consultation Process: Step-by-Step

Step 1: Notice of Intention

This is the first formal stage. Landlords must serve a Notice of Intention that explains the type and purpose of the proposed qualifying works. Leaseholders are then given 30 days to respond, raise concerns, or nominate contractors.

Step 2: Notice of Estimates

Once estimates are gathered (including at least one from an independent contractor), landlords must issue a second notice detailing the estimated costs. Again, leaseholders are given 30 days to review and comment.

Step 3: Notice of Award of Contract

After a contractor is chosen, landlords issue a final notice disclosing who has been awarded the contract and explaining why, especially if it is not the lowest bid. This notice should be provided within 21 days of awarding the contract.

What the Process Looks Like When it Goes Wrong

The most common procedural error is awarding the contract before the Stage 2 observation period closes. Leaseholders have 30 days from receipt of the Notice of Estimates to submit observations. Awarding the contract during that window voids the consultation for that stage and caps recovery at £250 per leaseholder regardless of the contract value. A second common failure is serving only some of the leaseholders, rather than all of them. If a single qualifying leaseholder is not served at either stage, the cap applies to the entire contract.

What Happens If Section 20 Is Not Followed Properly?

If landlords fail to follow the consultation process correctly, their ability to recover the full cost of the works is severely limited. They may be legally capped at recovering only £250 per leaseholder, regardless of the final bill.

Leaseholders who believe the process has been mishandled can challenge the charges via a First-tier Tribunal (Property Chamber). This legal route allows them to dispute the costs or raise concerns about the reasonableness of the proposed works.

Closing Thoughts

Section 20 consultations are more than just a legal requirement, they’re a vital safeguard for leaseholders, helping ensure transparency, fairness, and financial protection when it comes to major building works and service charge demands.

If you’re a leaseholder, stay informed and take part in the consultation process. Your input matters, and understanding your rights is the first step to protecting your long-term interests in your home.

At The Freehold Collective, we help leaseholders know their rights, including the Right to Collective Enfranchisement. If you’re experiencing repeated disputes over service charges or major works, consider taking control of your building by purchasing your freehold. It removes the landlord from the equation entirely.

Book a free consultation relevant when commissioning large-scale improvement works such as roofing, windows, and external works.