Understanding Section 20 Notices: What Leaseholders Need to Know

If you’re a leaseholder, you might one day receive a formal notice about major works planned for your building, such as roof repairs, lift upgrades, or external decorations. These works can be expensive, and landlords often pass the costs onto leaseholders through service charges. You may also receive a formal notice regarding the granting of a Qualifying Long-Term Agreement (QLTA).

To protect leaseholders from unexpected bills, the Landlord and Tenant Act 1985 requires landlords to follow a consultation process known as the Section 20 Procedure.

In this guide, Jennifer Eaton, assistant in our Property Litigation team, explains what Section 20 Notices are, why they matter, and what you should do if you receive one.

What Are “Qualifying Works”?

Under Section 20, qualifying works are repairs, maintenance, or improvements where the cost to any individual leaseholder exceeds £250. These works must also be permitted under your lease.

Common examples of qualifying works include:

• Roof replacement or repairs
• Lift upgrades
• External painting or cladding
• Health and safety improvements

If your lease doesn’t allow for improvements, only essential repairs and maintenance can be charged.

What is a “Qualifying Long-Term Agreement (QLTA)”?

A Qualifying Long-Term Agreement is a contract lasting more than 12 months for the provision of works, services, or supplies to a property or estate where costs are recoverable through service charges.

Under Section 20 of the Landlord and Tenant Act 1985, as amended by the Commonhold and Leasehold Reform Act 2002, landlords must consult leaseholders before entering into such agreements if:

• The contract runs for over 12 months, and
• The cost to any individual leaseholder exceeds £100 per year

Typical examples of QLTAs include: maintenance, cleaning, or major works frameworks.

Failure to consult properly can limit a landlord’s ability to recover costs, often capping charges at £100 per year per leaseholder.

The consultation process usually involves:

• Issuing a Notice of Intention outlining the proposed agreement and inviting observations.
• Allowing leaseholders to nominate contractors for consideration.
• Providing a Notice of Proposals with details of the estimates obtained.

This requirement ensures transparency and gives leaseholders an opportunity to influence decisions that affect their service charges.

The Section 20 Consultation Process

This process promotes transparency and ensures leaseholders have a say in decisions affecting their property. The freeholder or managing agent is required to issue a series of formal Notices to leaseholders regarding the proposed qualifying works or qualifying long-term agreement.

The consultation takes place in three stages:

1. Notice of Intention
   
   - Outlines the proposed agreement and reasons
   - Allows leaseholders to nominate contractors
   - Invites leaseholder comments within 30 days
    
2. Notice of Proposals/Estimates
   
   - Issued after obtaining contractor quotes
   - Includes at least two estimates
   - Explains how leaseholders can inspect the quotes
   - Provides another 30-day feedback period
    
3. Notice of Reasons (if applicable)
   
   - Issued if the landlord selects a contractor who didn’t offer the lowest quote
   - Explains the reasoning and summarises the leaseholder feedback
   - Must be issued within 21 days of awarding the contract

Who Must Be Consulted?

Landlords are legally required to consult:

• All affected leaseholders
• Any Recognised Tenants’ Association (RTA)

This applies whether the landlord is a private freeholder, a housing association, a Residents’ Management Company (RMC), or a Right to Manage Company (RTM).

What Happens if the Landlord Fails to Follow the Rules?

If the Section 20 consultation rules aren’t followed:

• The landlord may only recover £250 per leaseholder, regardless of the actual cost
• Leaseholders can challenge the charges at the First-tier Tribunal (Property Chamber)
• Landlords can apply for dispensation in urgent situations

Top Tips for Leaseholders

• Read Section 20 Notices carefully and respond within deadlines
• Nominate contractors and inspect quotes
• Raise concerns if works seem unnecessary or overpriced
• Know your rights—poor consultation can limit what landlords can charge

Need Help with a Section 20 Notice?

If you’ve received a Section 20 Notice or are unsure about your rights, our experienced Property Litigation team can guide you every step of the way. We can help you review the notice, understand your options, challenge any unfair charges, and ensure your interests as a leaseholder are fully protected.

Contact Jennifer Eaton and our team on 023 8063 9311 or email enquiries@warnergoodman.co.uk.