Section 20 Leaseholder Consultation: FAQs, Process and Legal Requirements

Section 20 consultation is a statutory process designed to protect leaseholders from being charged unreasonable costs for works or services. Before the works are carried out or long-term agreements are entered into, landlords must consult affected leaseholders and give them an opportunity to comment on the proposals. 

What are the key pieces of legislation? 

Section 20 consultation is governed by Section 20 of the Landlord and Tenant Act 1985. It's since been amended by Revised by Section 151 of the Commonhold and Leasehold Reform Act 2002

The detailed consultation requirements are set out in the Service Charges (Consultation Requirements) (England) Regulations 2003.

Together, these establish when consultation is required, what information you need to provide, and the consequences of failing to follow the process correctly. 

What are the basic principles underpinning the consultation?

You must always start with the lease to understand what applies in each building. Variable service charged apply for services, repairs or improvements, maintenance, insurance and landlords' costs of management. Where these variable charges apply, costs must be reasonable inclurred and works or services must be carried out to a reasonable standard. 

Section 20 consultation exsists to make sure that leaseholders are kept informed and can influence decisions where possible. They should not be presented with unexpected or excessive charges. 

Section 20 consultation is not required for every piece of work. It applies only where certain financial thresholds are exceeded and depends on the nature and duration of the works or services being proposed. 

You must consult leaseholders when: 

• works lasting up to 12 months will cost more than £250 per leaseholder, or
• goods, services or works lasting more than 12 months (a qualifying long-term agreement) will cost more than £100 per leaseholder per year

If these thresholds are exceeded, consultation must take place before costs areincurred, unless dispensation is granted by a tribunal. 

Understanding the difference between qualifying works and qualifying long-term agreements is important before you start the consultation. This is because the process and notice requirements vary depending on which applies. 

What is a Qualifying Long Term Agreement (QLTA)?

It's an agreement for works or services that:

• lasts longer than 12 motnhs, and
• costs more than £100 per leasholder per year

Common examples include long-term contracts for cleaning, grounds maintenance, servicing and planned maintenance. 

What does "Qualifying Works" mean? 

These are works that: 

• last 12 months or less, and
• cost more than £250 per leaseholder

These are often major repairs or imporvement projects, such as roof replacements or external decorations. 

The consultation process varies depending on the type of works or agreement, but it always follows a prescribed structure set out in legislation. 

What are the different consultation procedures?

The regulations set out different consultation schedules, depending on whether the proposal relates to different types of QLTA or Qualifying Works. 

• Schedule 1 - QLTA no public notice required
• Schedule 2 – QLTA public notice required
• Schedule 3 – Qualifying Works under QLTA
• Schedule 4 Part 1 – Qualifying Works public notice required
• Schedule 4 Part 2 – Qualifying Works no public notice required

What are the key questions to ask to find out which consultation route to take? 

To determine the correct procedure, you should consider: 

• The value of the contract or works
• the duration of the agreement
• whether the works fall under an existing agreement
• whether public procurement rules apply 

Answering these questions early helps avoid delays and compliance risks later. 

If I get more than one nomination, do I have to accept them all?

You must give due consideration to nominations but are not required to obtain estimates from every nominated contractor in all circumstances. At least one nominated contractor must be included where reasonably practicable.

Where a nomination cannot be accepted, you should document clear and reasonable grounds for that decision.

What are the public notice thresholds?

Public notice requirements apply where contracts exceed specific financial thresholds set by procurement legislation. Where these thresholds are met, additional publication steps are required alongside Section 20 consultation.

Landlords should ensure procurement and consultation requirements are considered together at an early stage. 

The thresholds change every two years. The current levels, set at 1 January 2026, are:

• Supplies and services - £207,720
• Works - £5,193,000

Figures include VAT.

Each schedule specifies how many notices are required and the minimum consultation periods. Here is an initial guide: 

• Schedule 1 - maximum of three notices
• Schedule 2 – two notices
• Schedule 3 – one notice
• Schedule 4 Part 1 – two notices
• Schedule 4 Part 2 – maximum of three notices

What should the Notice of Intention state? 

The Notice of Intention must:

•  describe the proposed works or services in general terms,
• explain the reason for carrying them out,
• state that leaseholders have the right to make written observations, and
• invite leaseholders to nominate contractors that the landlord should get an estimate from, where regulations allow 

The notice should include clear contract details and explain how and by when observations should be submitted. 

How should the costs be presented? 

Costs should be presented in a way that's transparent and meaningful. Where you can, you should indicate the estimated cost to each leaseholder, rather then only the contract value. 

There is a preferred hierarchy within the Service Charges Regulations, Schedule 1 outlines this as follows:

• Cost per tenant (preferred), or
• Cost per block / estate where the above is not possible, or
• Principles for working out the cost, e.g., hourly rates, Schedule of Rates
• How any variation to the amount is to be determined
• The duration of the agreement

If individual costs can't be accurately calculated, then the notice should explain this and set out how costs will ultimately be apportioned under the lease. 

What value do I use if I include extension provisions?

Where a contract includes extension or renewal provisions, the total potential value of the agreement should be used when assessing whether consultation thresholds are met.

This includes the initial term plus any extension periods that may be exercised.

How long do I need to allow for responses? 

Each notice must include certain information and allow leaseholders adequate time to respond. Consultation periods typically require a minimum of 30 days for observations at key stages. This ensures that leaseholders have a meaningful opportunity to engage. 

• Notice of Intention - allow 32 days
• Notice of Proposals - allow 32 days
• Notice of Reasons - to be sent 21 days after the decision (only required under Schedule 1 and Schedule 4, Part 2) and then only if the chosen supplier is not the lowest tenderer, or is not the firm nominated

How long is the "relevant period" that the notice needs to set out for? 

The "relevant period" is the statutory consultation period during which leaseholders may submit observations. For most notices, this is at least 30 days beginning on the date the notice is served. You must allow the full period before moving to the next stage of the process. 

What does the "date of the notice" mean? 

The “date of the notice” is the date on which the notice is deemed served, not the date it was drafted. This is important because consultation periods run from this date.

Where notices are posted, you should allow for delivery times when calculating the consultation period.

Yes, frameworks can be used compliantly, but consultation must still be carried out correctly. In many cases, consultation can take place at the point of us procuring the framework, rather than for each subsequent call‑off, provided the regulations are met.

Careful planning is essential to ensure leaseholders are consulted at the appropriate stage. SEC provide advice on this here: Section-20-Advice.pdf (southeastconsortium.org.uk).

If the contract value is above the level where public notice is required, there is a risk that the procurement may fail if nominations are received. In this case, take specific advice. Again, we can assist with this. 

Dispensation allows a landlord to recover costs even where consultation requirements have not been fully complied with, but it is not automatic. Applications are considered by a tribunal, which will assess whether leaseholders have suffered prejudice as a result of the failure.

Dispensation should not be relied upon as an alternative to proper consultation.

We regularly support members with these more complex aspects of Section 20 consultation, including frameworks, extensions, responsive works and risk management. Early advice can help avoid delay and cost recovery issues later in the process. 

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