Major works are one of the biggest sources of stress for RMC and RTM directors. Roofs, windows, external redecoration and lift replacements cost a lot. Your leaseholders pay for them, and they are often your neighbours.
Section 20 consultation exists to make that process fair and open. Get it right and leaseholders understand what you are doing and why. Get it wrong and the law can cap what you recover for the works. That leaves a funding gap that someone has to fill.
This guide explains what Section 20 is, when it applies, and what directors should expect from their managing agent.
What is Section 20?
Section 20 of the Landlord and Tenant Act 1985 sets out a duty to consult leaseholders. The detail sits in the Service Charges (Consultation Requirements) (England) Regulations 2003.
The landlord must consult before carrying out certain works or signing certain long-term contracts that the service charge will pay for.
The duty falls on whoever manages the building under the lease. That is often a Residents’ Management Company (RMC) or a Right to Manage (RTM) company. So the duty can sit with you as directors, even when a managing agent does the work for you.
One important point: Section 20 does not create a right to charge. Your lease decides whether you can recover the costs at all. Section 20 sets the process you must follow to recover them in full.
When does it apply?
There are two triggers.
Qualifying works. These are works to the building, such as repairs, maintenance or improvements, where any one leaseholder will pay more than £250.
Qualifying long-term agreements (QLTAs). These are contracts lasting more than 12 months, such as cleaning, gardening or lift maintenance. Section 20 applies where any one leaseholder will pay more than £100 in an accounting year.
The test looks at the highest individual contribution, not the total cost. On a small block, works of a few thousand pounds can easily trigger Section 20.
The three stages for qualifying works
For most major works, consultation follows three stages.
1. Notice of intention
The notice tells leaseholders, and any recognised tenants’ association, what works you propose and why. Leaseholders then have 30 days to comment. They can also nominate a contractor to give an estimate.
2. Statement of estimates
You need at least two estimates. At least one must come from a contractor with no connection to the landlord. If leaseholders nominated a contractor, you ask them for an estimate too. Leaseholders then receive a summary of the comments and your responses. They have another 30 days to comment on the estimates.
3. Notice of reasons (where required)
Sometimes you choose a contractor other than the nominated one or the lowest estimate. In that case, you must tell leaseholders why within 21 days of signing the contract.
You must genuinely consider leaseholders’ comments at each stage. Consultation is not a box-ticking exercise. Tribunals look closely at whether directors and agents took leaseholders’ views into account.
Long-term agreements follow a similar but separate process. Check with your agent before you renew or sign any contract that lasts more than a year.
What happens if it goes wrong?
If you needed to consult but did not do it correctly, you can only recover £250 from each leaseholder for the works. For a long-term agreement, the limit is £100 a year. The only way round this is dispensation from the First-tier Tribunal (Property Chamber).
For an RMC or RTM company, that can be serious. You still owe the contractor in full, but you may only recover a fraction of the cost through the service charge.
What is dispensation?
Under section 20ZA, the tribunal can waive some or all of the consultation requirements if it is reasonable to do so. Landlords often apply in genuine emergencies, such as urgent roof repairs after a storm, when there is no time to consult in full.
The Supreme Court’s decision in Daejan Investments Ltd v Benson (2013) shapes how the tribunal decides. Its main question is whether the failure to consult has prejudiced leaseholders. The tribunal can attach conditions. Dispensation is a safety net, not a substitute for planning ahead.
Is Section 20 changing?
The government has consulted on improving the Section 20 major works regime as part of its wider leasehold reforms. In July 2026, it said it will respond separately on those proposals in due course.
For now, the 1985 Act and the 2003 Regulations still apply. We will update directors as soon as the government confirms any changes.
Practical tips for directors
- Plan ahead. A planned maintenance programme or reserve fund study helps you see major works coming and budget for them.
- Allow enough time. Each consultation period must last at least 30 days. We allow 32 days between notices, so leaseholders have time to receive them. Full consultation usually takes at least two to three months before you can let a contract.
- Appoint the right professional. For larger schemes, a qualified surveyor should prepare the specification, run the tender and supervise the works. Think about their fees at the outset, and check whether your lease lets you recover them.
- Communicate beyond the notices. A plain-English covering letter or a residents’ meeting reduces queries and objections.
- Keep good records. Keep copies of every notice, the dates you served them and the comments you received. You may need them if anyone challenges the costs later.
- Check your lease first. Make sure your lease allows you to recover the cost of the works.
How Larchfield can help
At Larchfield, we manage the Section 20 consultation process for the developments we look after. We prepare and serve the notices, obtain and analyse estimates, respond to leaseholders’ comments and keep everyone informed.
For major works, we always advise appointing a qualified surveyor to specify, coordinate and supervise the works. We then work alongside them throughout. Directors stay in control of the decisions, and leaseholders get clear, timely information at every stage.
Planning major works, or unsure whether a contract you have signed needs consultation? Get in touch with our team.
This article is general guidance for RMC and RTM directors in England. It is not legal advice. Every lease and situation is different, so take specific legal advice where significant costs or disputes are involved.
