Section 20 is the procedural trap that catches more self-managed blocks than anything else. Get it wrong and you can find yourself legally unable to recover more than £250 from each leaseholder towards a roof that cost £40,000. The rules are not complicated, but they are unforgiving, and the time to learn them is before the works, not after.
"Section 20" is shorthand for the consultation requirements in section 20 of the Landlord and Tenant Act 1985, with the detailed procedure set out in the Service Charges (Consultation Requirements) (England) Regulations 2003. In a self-managed block the duty falls on whoever holds the obligation to carry out the works and collect the service charge: usually the RMC or RTM company, acting through its directors.
When Section 20 applies
There are two separate triggers. Either one can apply on its own.
The test is per leaseholder, not the total bill. In a block of ten flats with equal shares, a £40,000 roof works out at £4,000 each, far over the £250 threshold, so consultation is required. But even a modest £3,000 job crosses the line once any single leaseholder's share tops £250.
You cannot get around this by splitting one job into several smaller invoices. Where works are genuinely part of the same project, they are treated together for the threshold.
If consultation was required and you did not do it, each leaseholder's contribution is capped at £250 for the works, however much they actually cost. On that £40,000 roof across ten flats, the block could be left able to recover just £2,500 of the £40,000. The rest falls back on the company.
For a qualifying long-term agreement the equivalent cap is £100 per leaseholder per year. The cap is the whole reason the procedure matters, and it is why a missed consultation is not a paperwork slip but a direct financial hit.
The two-stage process for qualifying works
For ordinary major works that are not being carried out under an existing long-term agreement, the consultation runs in two notice stages, each with a 30-day window for leaseholders to respond. (Works carried out under a qualifying long-term agreement, and agreements that need advertising, follow their own slightly different schedules in the 2003 Regulations.)
Stage 1: Notice of Intention
You write to every leaseholder describing the works you propose, explaining why they are needed, and inviting written observations within 30 days. Leaseholders also have the right to nominate a contractor from whom you must then try to obtain an estimate. The notice must say where and when the description of works can be inspected if it is not set out in full.
Obtain estimates
Once the first period ends and you have considered any observations, you obtain estimates. You must get at least two, and where a leaseholder nominated a contractor you must try to get one from them. At least one estimate must be from a contractor wholly unconnected with the landlord or RMC.
Stage 2: Notice of Estimates
You issue a second notice (a statement of estimates) to all leaseholders, setting out at least two of the estimates, summarising the observations received at Stage 1 and your response to them, and making all the estimates available to inspect. Leaseholders then have another 30 days to comment before you enter into the contract.
If you do not choose the cheapest or a nominated contractor
You are not obliged to pick the lowest estimate. But if the contractor you appoint did not submit the lowest estimate and was not nominated by a leaseholder, you must, within 21 days of entering the contract, write to leaseholders explaining your reasons (or make a statement of reasons available to inspect).
Emergencies and dispensation
Sometimes you genuinely cannot consult first: a roof fails in a storm, a lift traps residents, a structural risk emerges. In those cases you can apply to the First-tier Tribunal (Property Chamber) for dispensation from some or all of the consultation requirements under section 20ZA.
The leading case is Daejan Investments Ltd v Benson [2013] UKSC 14. The Supreme Court held that the question for the Tribunal is not whether the landlord behaved well, but whether the leaseholders suffered any real prejudice as a result of the failure to consult. If they did not, dispensation should normally be granted, sometimes on terms (for example, the landlord crediting any costs the leaseholders can show they incurred because of the failure).
Dispensation is a safety valve, not a plan. It costs time and tribunal fees, the outcome is not guaranteed, and you carry the burden of showing no prejudice. It is far cheaper to run the consultation properly than to rely on being forgiven for skipping it.
Where self-managed blocks get it wrong
- Starting the works before the windows close. Signing the contract or letting the builder start before the 30-day periods have expired undoes the consultation, even if every notice was perfect.
- Forgetting long-term agreements entirely. Directors usually remember the £250 works trigger but miss that a three-year maintenance contract, or a managing agent appointment, can be a qualifying long-term agreement caught at just £100 a leaseholder per year.
- Treating the cap as a worst case they can absorb. On a large project the gap between the actual cost and the capped recovery can be tens of thousands of pounds, payable by the company and ultimately the directors' own block.
- Not keeping the evidence. If a leaseholder challenges the charge at the Tribunal, you need to produce the notices, the dates they were served, the estimates, and the observations. Verbal assurances that "we told everyone" carry no weight.
Planning major works on your block?
The free Modbury Remote Compliance Score flags whether your block has a Section 20 process in place, alongside the other core obligations. And the Block Compliance Check includes a templates pack with ready-made Notice of Intention and Notice of Estimates documents, so you run the consultation correctly the first time.
If you would rather hand the whole process to someone who runs these consultations routinely, that is part of the core Modbury Remote service, and the self-management toolkit includes the Section 20 templates if you would prefer to run it yourself. Both are built by TPI and RICS qualified property professionals.
This article is general guidance for directors of self-managed blocks in England, not legal advice, and the consultation rules contain detail this summary does not cover. For a specific project, read the regulations in full at legislation.gov.uk or take advice from a leasehold solicitor or the Leasehold Advisory Service (LEASE).