The Three Stages of Section 20 Consultation, and What Has to Happen at Each One

If you're a director of an RTM company or RMC, or running a small share-of-freehold block yourself, Section 20 consultation is one of the few pieces of leasehold law you genuinely cannot afford to get wrong. Get it wrong without realising, and you can end up chasing an application to the Tribunal just to recover money you've already spent. This article sets out what actually has to happen, in order, and where consultations most often go wrong.

This is written for England. The Service Charges (Consultation Requirements) (England) Regulations 2003 set out the detailed requirements referred to below. Wales operates under its own 2004 regulations, which differ in places, so don't rely on this for a Welsh block.

First, check whether you need to consult at all

Consultation under section 20 of the Landlord and Tenant Act 1985 is triggered by:

• Qualifying works, where any individual leaseholder's contribution would exceed £250; or
• A qualifying long-term agreement (QLTA) — any agreement for more than 12 months — where any leaseholder's contribution would exceed £100 in any accounting period.

Work out the trigger before you do anything else, based on each leaseholder's actual lease percentage, not an average. If you're not sure whether a contract counts as long-term, check the start and end dates against the 12-month cut-off carefully — rolling contracts and auto-renewing agreements catch people out regularly.

A word of warning on phasing. Splitting one obviously connected project into smaller jobs specifically to duck under £250 per leaseholder is a well-known trap, and tribunals are alert to it. If the works are genuinely separate projects with separate justifications, that's fine. If they're one job on paper split for convenience, treat it as one consultation.

Stage one: Notice of Intention

This is served on every leaseholder liable to contribute. It must:

• Describe the works, or the nature of the agreement, in enough detail for leaseholders to understand what's proposed and why.
• State where and when leaseholders can inspect supporting documents — the specification, survey and so on — for at least the consultation period, at a reasonable time and place.
• Invite leaseholders to make written observations within 30 days.
• Invite leaseholders to nominate a person from whom you should try to obtain an estimate, again allowing at least 30 days.

Common mistakes. Serving the notice on some flats but missing a leaseholder — particularly a sublet flat, where the leaseholder's address, not the tenant's, is the correct address for service. Giving fewer than 30 clear days. And describing the works so vaguely that leaseholders can't meaningfully respond.

Get the leaseholder list right at the outset. One missed leaseholder can be enough to unpick the whole process for that flat.

Stage two: obtaining estimates and the Notice of Estimates

After the Notice of Intention period closes, you must obtain at least two estimates, one of which must be from a contractor unconnected to you or your managing agent. If a leaseholder validly nominated a contractor within the time limit, you must make reasonable efforts to obtain an estimate from them too. You don't have to use them — but you do have to genuinely try.

You then serve a Notice of Estimates on every leaseholder, which must:

• Set out a summary of the estimates received, including the amount and the name of each contractor.
• Where a nomination was made, confirm whether an estimate was obtained from that contractor and, if not, why not.
• Again invite written observations within 30 days.
• State where the full estimates and supporting documents can be inspected.

Common mistakes. Proceeding on the strength of only one estimate. Not chasing an estimate from a validly nominated contractor and failing to explain why. And treating the 30-day observation period as advisory rather than mandatory — starting work, or signing the contract, before it has expired.

What to do with observations you receive

You have a legal duty to have regard to observations made during either 30-day window. That doesn't mean adopting every suggestion, but it does mean genuinely considering them.

If you go on to award the contract to someone other than the cheapest, or other than a validly nominated contractor, you need to be able to explain why — and in some circumstances must set that reasoning out in writing to those who commented.

Keep a simple written record of what was raised and how you responded, even informally, at board level. It is the single easiest thing to produce later if anyone challenges the process, and the easiest thing to regret not having.

Stage three: Notice of Award

Once you've entered into the contract, notify leaseholders of the outcome, including who was appointed. Where the estimate accepted was not the lowest, or not from a leaseholder-nominated contractor, set out the reasons. This is the point at which the paper trail from stage two earns its keep.

If you're short on time — the dispensation route

Sometimes a genuine emergency — a burst pipe, a structural risk, a lift out of service — means there simply isn't time to run a full 30/30 process. In that situation you can apply to the First-tier Tribunal (Property Chamber) under section 20ZA of the 1985 Act for dispensation from some or all of the consultation requirements.

Following the Supreme Court's decision in Daejan Investments Ltd v Benson (2013), tribunals focus on whether leaseholders were actually prejudiced by the shortcut, rather than on penalising the landlord for a process failure. A well-evidenced emergency application, made promptly and honestly, has a reasonable chance of success.

Don't treat dispensation as a routine substitute for consultation. Use it for genuine emergencies, and apply as early as you can rather than after the event.

The core discipline

Every stage above turns on three things: the right leaseholder list, the full 30 days actually observed, and a paper trail of what you did and why.

Directors who keep those three straight rarely end up in front of a tribunal. Directors who don't, often do.

This is practical guidance, not legal advice. For a specific consultation, particularly anything contested or high-value, involve a solicitor, a qualified managing agent or a surveyor, or check with the First-tier Tribunal or LEASE before you serve anything.