Legal Guide
What is a Section 20 Notice?
A Section 20 notice is the legal document a freeholder must send leaseholders before carrying out major works to a building. It gives leaseholders the right to be consulted, to nominate contractors, and to scrutinise costs before any money is spent.
Section 20 in Plain English
Section 20 of the Landlord and Tenant Act 1985 (as amended by the Commonhold and Leasehold Reform Act 2002) requires freeholders and landlords to consult leaseholders before carrying out significant works to a building, or before entering into certain long-term contracts for building services. The law was introduced to prevent leaseholders from being presented with large unexpected bills for works they knew nothing about and had no say in.
The name comes from the section number in the 1985 Act. You may also hear it referred to as a "Section 20 consultation" or simply "S20". The consultation is a formal legal process with set timescales, and failure to follow it has real financial consequences for the freeholder.
For leaseholders, a Section 20 notice is both a right and a responsibility. It is a right because it guarantees you will be told what is planned before it happens. It is a responsibility because the 30-day windows in the process are the points at which you can have genuine input; once those windows close, the opportunity to influence the outcome largely passes.
What Triggers a Section 20 Consultation
The consultation is required whenever a freeholder or landlord wants to carry out "qualifying works" or enter into a "qualifying long-term agreement." Both terms have specific legal meanings.
Qualifying works
Works on the building or its common parts where the cost to any individual leaseholder will exceed £250. The threshold applies per leaseholder, not as a total project cost. So in a block of ten flats with equal service charge proportions, a project costing more than £2,500 in total would trigger the consultation. Common examples include: roof repairs or replacement, external redecorating, window or door replacement, structural repairs, lift replacement, cladding works, and fire safety upgrades.
Qualifying long-term agreements
Contracts for building-related services that will last more than twelve months and cost more than £100 per leaseholder per year. These might include a new building maintenance contract, a lift servicing agreement, or a communal heating supply contract. The consultation for long-term agreements follows the same broad structure but has some differences in the documentation required at each stage.
What is not covered
Urgent works that genuinely cannot wait for the consultation process are exempt, provided the freeholder applies to the First-tier Tribunal (Property Chamber) for dispensation either before or immediately after carrying out the works. The Tribunal will consider whether the urgency was genuine and whether the leaseholders were prejudiced by the lack of consultation.
The Protection Section 20 Gives Leaseholders
The central protection is the cost cap. If a freeholder carries out qualifying works without completing the statutory consultation, leaseholders cannot be required to pay more than £250 each toward those works through the service charge. Any amount above £250 per leaseholder is simply not recoverable by the freeholder.
This is a meaningful financial protection. Major works on a block of flats can cost tens or hundreds of thousands of pounds. Without Section 20, a freeholder could award a contract without competitive tendering, pay an inflated price, and pass the full cost to leaseholders. The consultation requirement forces the freeholder to go through a process that introduces market pricing and leaseholder scrutiny.
A freeholder who wants to recover costs above the £250 cap where consultation was not carried out must apply to the First-tier Tribunal for a dispensation order (an official exemption from the consultation rules). Dispensation is not automatic: the Tribunal will consider whether the leaseholders were prejudiced by the lack of consultation and whether it is reasonable to grant the dispensation.
The Three-Stage Consultation Process
The Section 20 consultation for qualifying works has three stages. The first two are always required; the third applies only in specific circumstances.
Stage 1: Notice of Intention
The freeholder writes to every leaseholder and to any recognised tenants' association describing the works it intends to carry out and why. The notice must explain the works in enough detail for leaseholders to understand what is planned. It must also invite leaseholders to do two things within 30 days: submit written observations on the proposed works, and nominate a contractor they would like the freeholder to obtain a quote from.
This is the most valuable stage for leaseholders. If you have views on the works, the scope, or the approach, this is the time to put them in writing. If you know a contractor who could do the work competitively, nominating them here gives you a direct route to influence the tendering process.
Stage 2: Notice of Estimates
After the Stage 1 period closes, the freeholder must obtain at least two estimates for the works. One of those estimates must come from an independent contractor with no connection to the freeholder, or from a contractor nominated by leaseholders at Stage 1 (if one was nominated). The freeholder then sends a further notice to all leaseholders containing the estimates (or a summary of them), a summary of any observations received at Stage 1, and an invitation to leaseholders to submit further observations within another 30 days.
At this stage, leaseholders can see the competing prices and comment on them. If the estimates look unreasonably high, this is the time to say so in writing, and to state reasons. Written observations at Stage 2 create a record that may be relevant if the costs are later challenged at Tribunal.
Stage 3: Notice of Award (conditional)
This notice is only required in two situations: where the freeholder awards the contract to a contractor who submitted the highest estimate, or where the freeholder awards the contract to a contractor who was not nominated by any leaseholder. In either case, the freeholder must write to all leaseholders within 21 days of entering into the contract, identifying the contractor chosen, the price agreed, and the reasons for the choice.
If the award is made to the lowest-price contractor from the estimates, and that contractor was either nominated by leaseholders or is genuinely independent, no Stage 3 notice is needed.
Section 20 Notices and Selling Your Flat
An open Section 20 notice is one of the items that must be disclosed when selling a leasehold flat. It appears in the LPE1 (leasehold management pack), the standard document your solicitor requests from the managing agent at the start of conveyancing. Buyers and their solicitors will see it.
Why buyers are concerned
The concern is straightforward: a buyer who completes the purchase while a Section 20 notice is open could be liable for their share of the major works costs once those works are billed. If the estimated cost per leaseholder is £8,000 and the buyer completes before the invoice is raised, that £8,000 becomes their problem, not the seller's. Buyers adjust their offers accordingly, or in some cases withdraw.
The degree of concern depends on what the notice is for and how much is known about the likely cost. A notice for routine external redecoration where a firm estimate exists and the per-leaseholder cost is modest will deter fewer buyers than a notice for cladding remediation where the total cost is unknown and potentially very high.
How it affects the sale process
The buyer's solicitor will raise enquiries about the notice: what works are planned, what estimates have been obtained, what the expected per-leaseholder cost is, and what the likely timeline is. The seller's solicitor must answer these from information provided by the managing agent. If the managing agent is slow to respond, or if the information is incomplete, this adds delay.
Some buyers seek a retention arrangement (where a portion of the purchase price is held by solicitors until the works are complete and the cost is known) or a price reduction to cover the anticipated liability. Indemnity insurance is also used in some cases, though cover for Section 20 liabilities is not universally available.
Sellers with very high estimated costs
Where the works are substantial and the estimated per-leaseholder contribution is significant, some buyers on the open market will simply not proceed. Mortgage lenders may also be uncomfortable lending on a flat with a large outstanding service charge liability. In those circumstances, cash buyers who are experienced with leasehold complications are more likely to be willing to proceed, pricing the liability into their offer.
What to Do If Major Works Are Looming
If you own a leasehold flat and become aware that significant works to the building are being planned or have recently started, the following steps apply whether or not you are planning to sell.
- Check whether you have received a Notice of Intention. If works costing more than £250 per leaseholder are planned, you are legally entitled to a notice before they begin. If you have not received one, write to the freeholder or managing agent asking for the consultation documents.
- Respond within the 30-day windows. If you have observations, submit them in writing within the relevant response period. Verbal comments have no legal status in this process.
- Nominate a contractor at Stage 1 if you have one in mind. The freeholder must obtain a quote from a leaseholder-nominated contractor as part of the Stage 2 estimates exercise.
- Keep copies of all notices and correspondence. If costs are later challenged at Tribunal, the consultation record is central to both sides' arguments.
- Seek advice if costs seem unreasonable. The Leasehold Advisory Service (LEASE) provides free guidance to leaseholders, and the First-tier Tribunal can determine whether service charge costs are payable.
- If selling, disclose early and get the numbers. Ask your managing agent for a written estimate of your expected contribution share as soon as you know works are planned. Buyers can make informed decisions if the cost is known; uncertainty is what causes sales to collapse.
Related Reading
The legal hub covers the wider legal side of selling a leasehold flat. The LPE1 guide explains the leasehold management pack where Section 20 notices are disclosed to buyers.
Frequently Asked Questions
Section 20 is a part of the Landlord and Tenant Act 1985 that gives leaseholders the legal right to be consulted before their freeholder or landlord carries out major works to the building. The purpose is to make sure leaseholders know what is planned, have a chance to comment, and are not charged for works that were awarded without any competitive tendering process. If the freeholder skips the consultation, the most each leaseholder can be charged for those works is capped at £250.
Any qualifying works where the cost to any individual leaseholder will exceed £250. Qualifying works means works on the building or its common parts: roof repairs, external redecoration, lift replacement, cladding remediation, window replacement, and similar. The threshold applies per leaseholder, not in total, so a block with ten flats would trigger the consultation once total costs exceed £2,500. Qualifying long-term agreements (contracts for services lasting more than twelve months, such as a cleaning or maintenance contract) are triggered when the cost per leaseholder exceeds £100 per year.
Stage 1 is the Notice of Intention, where the freeholder tells leaseholders it intends to carry out works, describes the works, and invites leaseholders to submit observations and nominate a contractor. Leaseholders have 30 days to respond. Stage 2 is the Notice of Estimates, where the freeholder obtains at least two estimates and shares them with leaseholders for a further 30-day observation period. Stage 3 is the Notice of Award, required only if the freeholder awards the works to the highest-priced contractor or to a non-nominated contractor, in which case reasons must be given in writing within 21 days of awarding the contract.
No. The Section 20 process gives leaseholders the right to be consulted and to submit observations, but not a veto over whether the works go ahead. The freeholder can proceed after completing the consultation, even if leaseholders object. Where leaseholders believe the works are unnecessary or the costs unreasonable, the First-tier Tribunal (Property Chamber) can be asked to determine whether the service charge costs are payable, but this is a separate process from the consultation itself.
If the freeholder carries out qualifying works without completing the statutory consultation, the maximum each leaseholder can be required to pay through the service charge for those works is £250. Any costs above that are not recoverable from leaseholders. The freeholder can apply to the First-tier Tribunal for a dispensation (an official exemption from the consultation requirements) in certain circumstances, but this is not routinely granted.
An open Section 20 notice means the freeholder has started the consultation for major works but those works have not yet been invoiced or paid for. It will be disclosed in the LPE1 (leasehold management pack) and buyers will see it. The main concern for buyers is an unknown future liability: they could complete the purchase and then receive a service charge demand for their share of the works. This uncertainty can prompt price negotiations or, where costs are very high and uncertain, cause buyers to withdraw.
Yes. An outstanding Section 20 notice does not prevent a sale, but it must be disclosed and buyers will factor the potential liability into their offer. Where the estimated cost per leaseholder is known and modest, most buyers can proceed. Where costs are uncertain or high, some buyers may insist on a price reduction or withdraw. Cash buyers and investors are generally more comfortable with open Section 20 notices than owner-occupier buyers seeking mortgages.
At a minimum, the two main stages each require 30 days for leaseholders to respond, so the process takes at least two months from the first notice to the point where works can be awarded. In practice, including the time to obtain estimates and prepare notices, the full process from first notice to works starting often takes three to six months. More complex projects can take longer.