Section 20: A Clear Guide to the Consultation Process

Jan 5, 2026

When major works or long-term contracts are required in a leasehold building, the landlord or managing agent must follow a formal consultation process known as Section 20. This is a legal requirement designed to protect leaseholders by ensuring transparency, value for money and fair opportunity to comment on significant costs.

Whether you’re an Director, a leaseholder, or simply want to understand the process better, this guide breaks down Section 20 in a straightforward and practical way.

What Is Section 20?

Section 20 of the Landlord and Tenant Act 1985 requires landlords to consult leaseholders before carrying out:

1. Major Works

Any works costing an individual leaseholder more than £250 —
for example:

  • Roof replacements

  • External decoration

  • Structural repairs

  • Fire safety remedial works

  • Lift refurbishments

2. Long-Term Agreements

Any service contract over 12 months where a leaseholder’s cost exceeds £100 per year —
for example:

  • Cleaning contracts

  • Grounds maintenance

  • Communal heating maintenance

  • Managing agent contracts

If consultation is not carried out correctly, the landlord may only recover a limited amount from each leaseholder — even if the works cost much more.

The Section 20 Process Explained (3 Stages)

Section 20 is delivered in three formal notices. Each stage has a purpose, timelines, and requirements.

Stage 1: Notice of Intention

This notice tells leaseholders that the landlord/RMC intends to carry out major works or enter a long-term contract.

It must include:

  • A description of the proposed works

  • Reasons why the works are needed

  • Confirmation that leaseholders may give written observations

  • An invitation for leaseholders to nominate a contractor (if applicable)

  • A deadline of 30 days for observations and nominations

Leaseholders can use this time to comment, ask questions, or suggest alternative contractors.

Stage 2: Notice of Estimates

Once contractors have been invited to quote, and estimates have been received, the landlord must issue a second notice.

This notice must include:

  • At least two estimates

  • One of the estimates must (where practical) be from a contractor with no previous connection to the landlord/agent

  • A summary of all observations received from leaseholders

  • A 30-day opportunity for leaseholders to comment on the estimates

Leaseholders can request to view the full estimates and can make further observations.

Stage 3: Notice of Reasons / Award of Contract

After considering all estimates and observations, the landlord must notify leaseholders of:

  • The chosen contractor

  • The reasons for the decision (if it is not the lowest estimate)

  • The expected start date and scope of works

This final notice formalises the contract and brings the consultation to a close.

What Happens After the Consultation?

Once the Section 20 process is complete:

  • The works can begin

  • The managing agent will oversee the contractor

  • Costs will be invoiced in line with the lease (often via a balancing charge or reserve fund)

  • Leaseholders must be kept updated throughout the project

Larger works may require payment plans, loan facilities, or carefully managed cash flow — the managing agent should guide the RMC through this.

What Happens If Section 20 Is Not Followed?

If consultation is not completed correctly, the landlord may be restricted to charging leaseholders only £250 each toward major works — regardless of the actual cost.

This can create:

  • Serious funding issues

  • Delayed works

  • Legal disputes

Following the process properly is vital.

How a Good Managing Agent Supports the Process

A professional block manager should:

  • Prepare and issue all Section 20 notices

  • Advise directors on compliance

  • Obtain competitive estimates

  • Provide residents with clear communication

  • Oversee contractors and project timelines

  • Manage budgets, reserve funds and payment plans

  • Keep full documentation in case of queries or challenges

Section 20 is complex — having expert support avoids mistakes.

Final Thoughts: Section 20 Doesn’t Have to Be Complicated

While the legislation can seem daunting, Section 20 is ultimately about ensuring fairness, transparency and collaboration between landlords, managing agents and leaseholders.

With clear communication, good planning and a competent managing agent, the process runs smoothly and ensures your block receives the right works at the right price.

Need Help Navigating Section 20?

If your block is planning major works or reviewing its long-term contracts, Oakfield can guide you through the full consultation process with full legal compliance and clear communication for all residents. Check out our contact details here.