Done correctly, once. Not started and left for someone else to finish. Section 20 consultation managed from notice of intention through to completion — no shortcuts, no uncollectable costs.
Major works are one of the most consequential things a managing agent does on behalf of a residential block. They are expensive, they affect every leaseholder, they require a specific statutory process to be followed before a penny can be recovered through the service charge, and they take months to plan and complete properly.
Get the Section 20 process wrong and the amount recoverable from each leaseholder is capped at £250 — regardless of what the works cost. On a significant external repairs programme or roof replacement, that shortfall can run to hundreds of thousands of pounds. The responsible party — the RTM company, the RMC, or the freeholder — carries the exposure.
We have managed Section 20 major works correctly, from notice of intention through to completion. We have also inherited blocks where the previous agent ran major works for years without finishing them — scaffolding up, costs mounting, leaseholders waiting for an answer that never came. We know what the process is supposed to look like, and we know exactly what it looks like when it goes wrong.
Section 20 of the Landlord and Tenant Act 1985 requires the landlord — in practice, the managing agent acting on their behalf — to consult with leaseholders before carrying out qualifying works where any one leaseholder's contribution will exceed £250. The consequence of not following it correctly: recovery from each leaseholder is capped at £250, regardless of actual cost. For a 20-flat block with £100,000 of external repairs, a failed Section 20 means a maximum recovery of £5,000. The remaining £95,000 cannot be demanded through the service charge.
The £250 cap is not a technicality. It is a hard limit.
We have seen managing agents treat Section 20 as paperwork — something to do alongside the works rather than before them. It is not. The consultation must be completed in the correct sequence, with the correct notices, and the correct time allowed for leaseholder responses. Shortcutting any stage exposes the responsible party to an uncollectable shortfall on the works costs.
Section 20 qualifying works follow a three-stage statutory consultation process. Each stage has specific requirements and minimum time periods. All three stages must be completed before works can proceed and costs recovered.
What it covers: The landlord notifies leaseholders of the intention to carry out qualifying works and gives them the opportunity to nominate a contractor to be invited to tender. The notice must describe the works and invite observations.
Minimum period: 30 days for leaseholders to respond with observations or contractor nominations.
If skipped or wrong: Stage 1 omitted or notices defective — entire process invalid. £250 cap applies.
What it covers: At least two estimates are obtained (including any nominated contractor if one was put forward). Leaseholders are notified of the estimates and invited to make observations. A summary of the estimates must be made available for inspection.
Minimum period: 30 days for leaseholders to respond with observations.
If skipped or wrong: Fewer than two estimates obtained, or leaseholder's nominated contractor not included without good reason — process flawed. Tribunal may disallow recovery above £250.
What it covers: If the lowest estimate is not chosen, or if a leaseholder's nominated contractor is not appointed, the landlord must give written reasons within 21 days of entering the contract.
Minimum period: Within 21 days of entering the contract.
If skipped or wrong: Failure to provide reasons when required — leaseholders can apply to Tribunal to have the contract set aside or recovery capped.
We manage the full Section 20 process on behalf of the RTM company, RMC, or freeholder. The works do not begin until the consultation is correctly completed. We do not take shortcuts because the consequences of getting it wrong fall on our clients, not on us.
We establish what the building needs before any contractor is invited to quote. A clear, specific specification is the foundation of a valid tender process and a fair comparison between contractors.
Notices drafted correctly, served on all qualifying leaseholders, time periods observed. Records maintained of every notice served and every response received. No shortcuts.
Minimum two estimates obtained. Leaseholder-nominated contractors invited where relevant. Tender documentation prepared and managed. Responses evaluated on a like-for-like basis.
Tender results presented to directors with our assessment and recommendation. The decision to appoint is made by directors, not by us. Where the lowest estimate is not recommended, we provide written reasons.
We supervise the works on behalf of the RTM company or RMC. Progress monitored against programme. Variations approved by directors before instruction. Our supervision fee is 10% of works cost — disclosed and agreed before instruction.
On completion, the final account is agreed with the contractor, reconciled against the tender price, and any legitimate variations accounted for. Cost properly attributed to the service charge account.
One of the most difficult situations in block management is taking over a building where major works have been started but not completed by the previous agent. The scaffolding is up. Money has been spent. Leaseholders are waiting.
We are currently managing exactly this situation. External repair works were started under a previous agent. The Section 20 consultation was completed validly — leaseholders know what they agreed to contribute and the statutory recovery position is intact. But the works were not finished when we took over. Our role is to establish the scope of what remains, assess whether the reserve fund covers the outstanding costs, and manage the completion properly, with full transparency to leaseholders throughout.
When we inherit incomplete works we conduct a full assessment of what was done and what remains. We review the Section 20 record to confirm whether the statutory process was correctly completed — because if it was not, the recovery position for outstanding costs may be compromised. We establish the financial position: what has been charged to leaseholders, what the reserve fund holds, and whether additional contributions will be needed.
Transparency throughout is not optional — it is what leaseholders are entitled to. Leaseholders who have been waiting years for works to complete, without clear communication about why or when, are already frustrated. They are entitled to know the financial position, the revised programme, and what the cost to them is likely to be. We provide that information clearly and do not wait to be asked for it.
| Failure | Consequence |
|---|---|
| Works begun before Section 20 consultation completed | Recovery capped at £250 per leaseholder regardless of actual cost. |
| Stage 1 notice not served on all qualifying leaseholders | Consultation invalid. Process must restart. Works costs at risk. |
| Fewer than two estimates obtained | Consultation flawed. Tribunal may disallow recovery above the cap. |
| Leaseholder's nominated contractor excluded without reason | Leaseholder can apply to Tribunal to have the recovery capped. |
| Works scope not clearly defined before tendering | Variations and cost overruns. Leaseholders charged for work not in the original scope without further consultation. |
| Works started without director approval of contractor appointment | Directors potentially liable for unauthorised expenditure. No valid contract. |
| Works not completed and new scope not re-consulted | Outstanding works costs may not be recoverable if the original Section 20 did not cover the new or remaining scope. |
| Supervision absent during works. Variations approved without director sign-off | Poor quality. Cost overruns. No recourse against contractor. Director liability for unauthorised expenditure. |
The best-managed buildings have a reserve fund that has been building towards anticipated major works for years. When the works come, the money is there and the financial impact on leaseholders is manageable. The Section 20 process still applies — the reserve fund does not remove the consultation requirement — but it removes the pressure of having to raise large sums at short notice.
Where the reserve fund does not fully cover the cost of the works, additional contributions are required from leaseholders. These are subject to the same Section 20 consultation process if the total contribution per leaseholder exceeds £250. They are also subject to the Landlord and Tenant Act reasonableness test — leaseholders can challenge the costs at the First-tier Tribunal.
The case for maintaining an adequate reserve fund is straightforward: it reduces the financial shock of major works, reduces the risk of leaseholder challenges, and gives the building a stable financial foundation for its long-term maintenance. We prepare a planned maintenance schedule for every block we manage and set reserve fund contributions accordingly.
We manage Section 20 consultation and major works oversight for residential blocks across North, East London and Essex. If you have inherited incomplete works or are unsure about the Section 20 position on your building, start with a conversation.
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