Section 20 Explained: Everything You Need to Know

If you’re a leaseholder, there’s a good chance you’ve come across the term “Section 20” and felt a wave of confusion, or frustration. It sounds legal and technical because it is. Section 20 is a very important part of the Landlord and Tenant Act 1985, and it sets out the process that a landlord or managing agent must follow when carrying out major works to a building, where any leaseholder’s contribution will exceed £250.

The purpose of Section 20 is simple: protection. It was formulated and designed to ensure that leaseholders are not hit with unexpected or unfair costs without being consulted. It formalises the process of tendering for work, and gives leaseholders a chance to comment, raise objections, and nominate contractors themselves to undertake the works in question. If your managing agent is planning to replace the roof, overhaul the communal electrics, or carry out internal or external redecorations after the freehold company have provided the instruction to do so, each leaseholder is expected to contribute more than £250 based on their service charge percentages noted in the lease. They are legally required to follow the three-stage Section 20 consultation process.

This process starts with a Notice of Intention, informing leaseholders that major works are being considered. The second stage presents at least two estimates for the work, along with the opportunity to review them and provide feedback. If the freehold company chooses a contractor who wasn’t the cheapest or who wasn’t suggested by the leaseholders, they must issue a Notice of Reasons to explain why which forms Stage Three of the Section 20 Process.