The Guide to Issuing a Section 20 Notice (plus free template and process)
When landlords or freehold owners want to carry out qualifying works to their freehold property, a piece of legislation must be issued that ensures the work is carried out lawfully and with leaseholder permission.
The piece of legislation is known as a Section 20 notice, but for those who have not come across issuing legislation and collecting financial contributions in the form of a service charge from leaseholders before, it can be difficult to know where to start.
Thankfully, we’ve broken it down into a quick and easy guide to issuing a section 20 notice, and included a free section 20 notice template for easy download and use.
A word on where we sit. At The Freehold Collective we spend most of our time helping leaseholders buy their freehold — which means that the moment a purchase completes, our clients become the landlord, and Section 20 becomes their obligation to run correctly. We have supported this process from both directions, in buildings from 12 flats to 34. Our view, stated plainly: the £250 cap for getting Section 20 wrong is the single most expensive mistake a resident-run freehold company can make, and dispensation from the Tribunal is a fallback, not a plan. Treat the timetable as immovable and the paperwork as evidence you may one day need to produce.
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What is a Section 20 Notice?
When carrying out qualifying works to a residential freehold property, a Section 20 Notice is a document that must be served to all leaseholders within the building. Works may include things like maintenance of the structure of the block, or the repairs of guttering or roofing.
However, in order for Section 20 Notices to be served to a leaseholder, they must make a financial contribution that exceeds £250. As a result, this kind of maintenance or repair work becomes classified as “major works” and therefore needs to go through the Section 20 Consultation procedure.
The Landlord and Tenant Act 1985 (as amended by the Commonhold and Leasehold Reform Act 2002) firmly stipulates that a formal Section 20 Consultation be followed. The process consists of three phases, and each has its own distinct form of Section 20 Notice to be served to leaseholders:
- The Pre-tender stage: where contractors are invited to tender for the work (i.e to give an estimated cost)
- The Tender stage: where the landlord, RTM (Right to Manage) group or Freehold Company will have received the tenders (or estimates).
- Award of contract stage: where the contract for the works is awarded to the successful tender.
The objective of the Section 20 Consultation procedure is to give leaseholders the choice to decide how their funds are spent. And to an extent, it does so – if the landlord wants to choose a quote that is not the cheapest, they have to justify why. However, the process can be skewed to a landlord’s favour for gain.
The three stages at a glance
This is the summary we give every resident-owned freehold company we hand over at completion — the deadlines, and the mistakes we most often see boards make at each stage:
| Stage | Notice served | Minimum consultation period | The mistake we see most often |
| 1. Pre-tender | Notice of Intention to Carry Out Works | 30 days for leaseholder observations | Work descriptions so vague that leaseholders cannot meaningfully respond — which undermines the whole consultation |
| 2. Tender | Statement of Estimates | 30 days for leaseholder observations | No genuinely independent estimate among the tenders |
| 3. Award of contract | Notice of Reasons (within 21 days of entering the contract, where required) | — | Skipping the notice because the chosen quote ‘seemed obviously right’ |
Miss a step or cut a period short and the arithmetic is brutal: on a £96,000 roof project across 12 flats, a compliant consultation lets you collect £8,000 per flat — a failed one caps you at £250 each, £3,000 in total, leaving the landlord to fund the missing £93,000. That asymmetry is why we treat the timetable as immovable.
When Section 20 is required
| Scenario | Section 20 required? | Why / threshold |
| One‑off major works where any leaseholder pays over £250 (e.g. roof replacement, external redecorations) | Yes | These are “qualifying works” if the contribution from any one leaseholder exceeds £250, so the full three‑stage consultation procedure must be followed. |
| Long‑term maintenance or service contract over 12 months where any leaseholder pays over £100 per year (e.g. cleaning, gardening, managing agent agreement) | Yes | This is a “qualifying long‑term agreement”; if the annual cost to any leaseholder exceeds £100, Section 20 consultation is triggered before entering the contract. |
| Minor or reactive repairs under £250 per leaseholder (e.g. small plumbing or joinery jobs) | No | Costs below £250 per leaseholder are not “qualifying works”, so formal Section 20 consultation is not legally required, though good practice communication is still recommended. |
| Urgent health and safety works where delay would cause serious risk | Sometimes | The landlord can apply to the First‑tier Tribunal for dispensation from some or all consultation requirements so that essential works can proceed without full Section 20 timings. |
What should a Section 20 Notice contain?
A Section 20 notice must be sent to each leaseholder and the RTA (Registered Tenants Association), if one is present at the building. As there are three separate stages, Section 20 notices will need to differ to reflect the evolution of the process in each stage.
At the pre-tender stage, the Section 20 Notice should contain:
- A description, in general terms, of the proposed works to be carried out, or alternatively specify a reasonable time and place that the works may be inspected
- Valid reasons why the works are necessary to be carried out
- A statement that highlights the total amount of estimated expenditure likely to be incurred by the works
- An invitation for leaseholder observations to be submitted in writing on either the proposed works or the estimated expenditure
- Information that describes where written leaseholder observations can be sent and at which date they should be submitted by
- Provide a clear date on which the consultation period for the proposed works ends (this should be around 30 days of issuing the Notice)
- Copies of documents referred to in the notice
Leaseholders also have the right to nominate contractors for the works, and landlords should clearly communicate the selection criteria and justify their nomination procedures to ensure fairness and legal compliance.
Whilst in the tender stage, the Section 20 notice must contain all of the above, as well as:
- The name and address of the chosen contractor
- An explanation (if relevant) of the connection between the contractor and the council
- Where possible, a final estimated cost as well as any other relevant cost information
- Details of any arrangements (if applicable) for making changes to the agreement terms
- An explanation of the period of time in which the agreement will last
- A summarisation of any observations received about the initial notice of intent, and the response to those observations
- Details of the estimates provided by contractors, including at least one estimate from an independent contractor to ensure impartiality and compliance
In the final stage, a notice of proposal is sent and this must contain:
- Copies of at least two proposals, or a time and place to view the proposals
- Invitations to make written comments regarding the proposals
- A supplied address in which to send written comments to
- A fixed date when the consultation period ends and clarification that comments must be received before this 30-day date
Each leaseholder’s apportioned contribution is calculated based on the total cost of the works, and may be adjusted when the final account invoice is issued to reflect any changes in rechargeable and non-rechargeable expenses.
These are the key consultation requirements under the legislation.
Does Section 20 apply to share of freehold owners?
Section 20 does not differentiate between landlords, freeholders, Right to Manage Companies, Resident’s Management Companies, or any other management company that has responsibility for the freehold. All of the above are referred to as “landlords” in accordance with the legislation.
If you own the freehold of a property and want to do any work on, maintain, or improve a property then you must abide by Section 20 legislation. This means, if you ask for more than £250 in funding for the works from any of your leaseholders, or works may cost more than £100 per year, you must also adhere to strict Section 20 rules.
If you do not follow Section 20 procedure in its entirety, including its timetable, you will be limited to a total of £250 for one-time projects or £100 per year for long-term maintenance. This is true even if the works were requested by leaseholders.
However, a good managing agent will be able to manage a Section 20 process for you.
This is the point that catches resident-owned buildings out more than any other. When the leaseholders at Bridge Court in Taplow completed their purchase — 22 of 24 flats, after we defeated a development-value claim more than 200 times their figure — the residents took control of the management themselves, cut their service charges and watched flat values rise. But from completion day, every set of major works in that building has had to run through exactly the Section 20 consultation the old freeholder was bound by. Owning your freehold does not exempt you from the Act; it makes you the party who must comply with it. That is why Phase 3 of our process — Ownership — exists: we stay on after completion so the company our clients now run never stumbles into the £250 cap.
What is the Section 20 procedure for landlords?
Issue a Notice of Intention to Carry Out Major Works
When beginning Section 20 procedures, the first thing you must do is submit a Notice of Intention to Carry Out Works, which states your planned works or maintenance contracts, details the works carried or to be carried out, and explains why they are required. This notice must be submitted whether the work is being proposed by the leaseholders or not.
After receiving the Notice of Intention to Carry Out Works, you must invite leaseholders to participate in the process. Leaseholders have 30 days to offer comments or ideas, and they may also nominate contractors for the job; all of these must be considered during the tender process.
You can only refuse to consider a leaseholder’s suggestion to nominate contractors if the contractor in question is not qualified or suitable to do the work, for example if they don’t have liability insurance.
Provide a Statement of Estimates
If a contract has been reached for the work, you must provide leaseholders with a Statement of Estimates, which details the estimates provided for the money and duration of the planned works. The estimates provided must include at least one from an independent contractor to ensure impartiality and compliance.
Estimates are collected through a tender process which contains at least two contractors: one nominated by you (the landlord) and another nominated by one or more of the leaseholders. The initial estimate is often referred to as the estimated invoice, and it may differ from the final invoice issued after the works are completed. This is because a cost change can occur between the estimate and the final invoice, depending on the progress of the work and the inclusion or exclusion of non-rechargeable items.
The sum quoted to leaseholders in the Statement of Estimates represents the initial amount, but the balance requested from leaseholders may change once the final costs are determined. All charges, including any adjustments, are recorded in the service charge account. The costs included in the estimate are the relevant costs associated with the major works or scheme.
After the tendering process, your leaseholders have a period of 30 days to respond to the estimates and a legal right to see any proposals submitted by chosen contractors that you did not include in your Statement of Estimates.
Start the work by issuing a Notice of Reasons
Depending on which contractor you choose to do the work, step three can end two ways. If you pick a contractor who offered the cheapest bid or one suggested by your leaseholders, you may accept and go ahead with the project. The Section 20 procedure will be completed at this point, allowing you to collect the money from your leaseholders.
However, if you didn’t pick the contractor with the cheapest estimate, or one selected by the lessees, you must give leaseholders a Notice of Reasons explaining your decision within 21 days after entering into the contract.
If the leaseholders do not protest your reasons, the Section 20 procedure will come to a close. If the leaseholders do object, they can file an objection with the First-tier Tribunal where they can argue liability for paying and reasonableness of service charges.with the First-tier Tribunal where they can argue liability for paying and reasonableness of service charges.
Your Downloadable Section 20 Notice Template
This guide and template is for general information only and does not constitute legal or professional advice. It does not take account of your specific circumstances and may not reflect the latest legal developments. No solicitor‑client or adviser‑client relationship is created by using this guide or the free template, and you should obtain independent legal advice before taking or refraining from any action.
Next steps
If your block is facing upcoming major works or long‑term contracts and you are unsure how to run a compliant Section 20 process, you can book a free initial consultation with The Freehold Collective. This provides a no‑obligation review of your building, a discussion of your Section 20 obligations, and clear options for improving both management and ownership structure going forward.
And if you are still a leaseholder on the receiving end of Section 20 notices you do not trust, the longer-term answer may be to become the landlord: our freehold calculator gives an instant estimate of what buying your building’s freehold would cost.
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Section 20 Notice Template FAQs
When do I need to issue a Section 20 notice?
You must carry out Section 20 consultation when any leaseholder’s contribution to one‑off works will exceed £250, or when a long‑term contract (over 12 months) will cost any leaseholder more than £100 per year. Below those thresholds, formal Section 20 is not required, although clear communication with leaseholders is still good practice.
What happens if I don’t follow the Section 20 procedure properly?
If you fail to follow the Section 20 process and timetable in full, your ability to recover costs through the service charge is capped at £250 per leaseholder for one‑off works or £100 per year for long‑term agreements, even if the actual costs are much higher. Leaseholders may also challenge the reasonableness of the charges at the First‑tier Tribunal.
Can leaseholders object to the proposed works or contractor?
Yes, leaseholders have a 30‑day consultation period at the key stages to submit written observations on the works, costs and choice of contractor, and can nominate their own contractors for consideration. Landlords must have regard to those observations and, if they choose a contractor who is not the cheapest or not leaseholder‑nominated, may need to issue a Notice of Reasons explaining why.
Does Section 20 apply if the leaseholders own a share of the freehold or use a Right to Manage company?
Section 20 does not distinguish between a traditional landlord, freeholder, Right to Manage company, resident management company or any other entity managing the building – they are all treated as “landlords” under the legislation. If you are asking leaseholders to contribute more than £250 for major works or over £100 per year under a long‑term agreement, you must still follow the full consultation procedure.