What to do about a Section 20 notice

If a Section 20 notice has landed on your doormat, it usually means one thing: a large bill is coming, and your landlord is legally required to consult you before spending the money. Section 20 of the Landlord and Tenant Act 1985 exists to give leaseholders a say — and some protection — before the costs of major works or a long-term agreement are passed on through the service charge. This guide explains what the notice is, why you have received it, what to do at each stage, and what happens if your landlord gets the process wrong.

Why did I get a Section 20 notice?

You received the notice because your landlord (or managing agent) is planning to spend money that, divided across the leaseholders, will cost you more than a statutory threshold. There are two situations that trigger consultation under Section 20:

• Qualifying works. One-off works to the building — a new roof, replacing lifts, external decoration, structural repairs — where your contribution would exceed £250. These are what most people mean by major works.
• A qualifying long-term agreement. A contract lasting more than twelve months — for example a maintenance, cleaning or lift-servicing contract — where your contribution under it would exceed £100 in any year.

If the cost falls below those figures, no consultation is needed. If it exceeds them and the landlord does not consult, the law limits what they can recover — more on that below. The thresholds are set by regulations made under the Act; they have not changed for many years and are widely regarded as very low, which is why so many blocks trigger a consultation.

The consultation has stages — know which one you are in

For most major works, the consultation runs in two formal stages, with a possible third notice. Each notice you receive should tell you clearly which stage it is and what deadline applies. Read the notice carefully and diarise the date.

Stage 1 — Notice of Intention

The first notice is the Notice of Intention. It tells you the landlord intends to carry out works (or enter an agreement), describes what is proposed and why, and invites your response. This is your first and best opportunity to influence what happens.

At Stage 1 you have 30 days to do two things:

• Make written observations. Say what you think — question whether the works are necessary, whether the scope is right, whether now is the right time, or whether a cheaper approach would do. The landlord must have regard to what you say.
• Nominate a contractor. You can put forward the name of a contractor from whom the landlord should try to obtain an estimate. If you have a reputable local firm in mind, name them — the landlord should approach at least one leaseholder nominee.

Put your observations in writing, keep a dated copy, and send them within the 30-day window. Even a short, factual letter creates a record that the tribunal can later see if the matter is disputed.

Stage 2 — Notification of Estimates

After collecting estimates, the landlord sends the Notification of Estimates (sometimes called the Statement of Estimates). This sets out the estimates obtained, including any from a contractor you nominated, and gives you another 30 days to make observations.

At this stage, review the estimates closely:

• Are there at least two genuine, arm's-length estimates?
• Was your nominated contractor actually asked, and is their estimate included?
• Do the estimates cover the same scope, so they can be compared fairly?
• Are professional fees, contingencies and management charges reasonable and itemised?

Make written observations on anything that looks high, vague or inconsistent, again within the 30-day window. The landlord must make the estimates available for inspection free of charge, so ask to see the full quotations rather than relying on a summary.

Notice of Reasons — if they do not pick the cheapest or your nominee

The landlord is not obliged to choose the lowest estimate. But if they do not choose either the cheapest estimate or the one from a contractor you nominated, they must, within 21 days of entering the contract, give you a Notice of Reasons (a statement of reasons) explaining their choice — or make that statement available for inspection. If the reasons do not stack up, that is useful evidence should the charge later be challenged.

Your options at a glance

Faced with a Section 20 notice, you have four practical options — and they are not mutually exclusive:

1. Engage. Ask questions, request the specification, and understand the scope before the money is committed.
2. Nominate. Put forward your own contractor at Stage 1 so a competing estimate is obtained.
3. Observe. Make written observations at each stage, within the deadlines, on cost, scope and timing.
4. Challenge later. If the final charge is unreasonable, apply to the First-tier Tribunal under Section 27A.

Consulting you does not make the cost automatically payable. The works still have to pass the Section 19 reasonableness test: costs count towards your service charge only to the extent they were reasonably incurred and the work is of a reasonable standard. A proper Section 20 process and a reasonable final bill are two separate questions.

What if the landlord fails to consult?

This is the leaseholder's strongest protection. If the landlord does not carry out the required consultation for qualifying works, your contribution is capped at £250 — no matter how large or reasonable the actual bill. For a qualifying long-term agreement, the cap is £100 a year. A £30,000 roof, consulted on incorrectly, can leave a leaseholder liable for only £250 of it.

Dispensation is not automatic. The tribunal focuses on whether the leaseholders suffered real prejudice from the failure to consult — did the shortcut actually cost you anything, or deprive you of the chance to influence the works? Where there was no real prejudice the tribunal may grant dispensation, sometimes on conditions (such as the landlord paying the leaseholders' costs). Where the failure did cause real prejudice, the tribunal will usually grant dispensation only on terms that remedy it — for example a reduction in the charge — and in serious cases may refuse it, leaving the statutory cap in place. Either way, a consultation failure is a serious point in your favour.

How ServiceCharges.AI helps with a Section 20 notice

Section 20 notices are easy to get wrong — both for landlords issuing them and for leaseholders reading them. Our audit checks whether the correct stages and deadlines were followed, whether the estimates are comparable, and whether the final cost is likely to survive the reasonableness test — so you know whether to observe, nominate, or prepare to challenge.

Start with a free audit

Before you reply to a Section 20 notice, find out where you stand. Upload the notice, your service charge accounts and your lease, and our AI checks the consultation against the Landlord and Tenant Act 1985, the Section 20 stages and tribunal precedent — then shows you which points are worth raising and how much may be challengeable.

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