You’ve received a Section 20 notice but what does it really mean?
The Section 20 process is part of the Landlord and Tenant Act 1985. It’s designed to protect leaseholders from unexpected costs by requiring landlords/management agents to consult leaseholders before major works or long-term contracts are started. It’s required when major works cost more than £250 per leaseholder, or long-term service contracts (over 12 months) cost more than £100 per leaseholder per year.
The three stages of the Section 20 Consultation Process
The consultation has three key stages:
Stage 1 – Notice of Intention: This is the first letter which explains what work/service is being proposed, why it’s necessary and your right to comment or suggest your own contractor. You’ll have 30 days to respond before quotes are gathered.
Stage 2 – Notice of Estimates: After quotes are gathered, you’ll receive a summary with at least two estimates, one of which must be independent. You’ll have 30 days to respond and comment on the proposals.
Stage 3 – Notice of who won the contract: Once a contractor has been chosen, you’ll receive a ‘notice of award of contract’ within 21 days. If the contract is awarded to your nominated contractor or the lowest estimate, this stage isn’t legally required, but most good managing agents send it for transparency.
Section 20 leaseholder rights and responsibilities
As a leaseholder, you are expected to engage in the Section 20 process, by raising valid concerns, potentially nominating contractors and responding on time.
If the process is followed correctly, the landlord has the right to recover costs from leaseholders under the terms of the lease. But if it isn’t done properly, they may be limited to claiming just £250 per leaseholder, even if the actual cost is much higher.
That doesn’t mean leaseholders can avoid the cost, but it can affect how the block is managed and funded, which is why having the right managing agent matters.
There may be times when urgent work is required, such as fire safety issues or structural risks. In these cases, the landlord can apply to the first-tier tribunal for ‘dispensation’ from the Section 20 process. However, this should be the exception, not the norm.
Why are you getting a Section 20 notice?
Section 20 notices are becoming more common and there are a few reasons why. Rising costs, increased safety scrutiny and improved leaseholder awareness means many projects now exceed the £250 per leaseholder threshold.
Section 20 notice key takeaways and next steps
The Section 20 process isn’t just paperwork. It protects leaseholders from unexpected, large bills and is part of your rights as a leaseholder.
Whilst the process can be lengthy, the Section 20 process builds trust when handled properly.
At Property Fusion we take the stress out of block management, for both leaseholders and landlords. That includes making the Section 20 consultation process clear, fair, and well-managed from start to finish.
If you’d like honest advice, help understanding your next steps, or to talk through how we work, get in touch today.
