Landlord and tenant: Section 20 consultation explained

Landlords and leaseholders benefit from complying with, and participating in, the statutory consultation procedures governing their relationship, but few really understand their rights and responsibilities during the process.

Our Litigation & Dispute Resolution team regularly support our landlord and tenant clients through such situations. Our trainee solicitor, Jordan Rodwell examines one such commonly misunderstood procedure.

Under s.20 of the Landlord and Tenant Act 1985, landlords may be under a duty to consult affected leaseholders where works are proposed by the landlord, the cost of which is recoverable from those leaseholders. ‘Works’ in this sense is taken to include all repairs, maintenance and improvements. Leaseholders liable to pay at least £250 each for the proposed works under their lease provisions must be consulted in compliance with a strict legal procedure.

The central purpose of s.20 is to give leaseholders the opportunity to have their say on a landlord’s proposals, to allow them to nominate a contractor and to require the landlord to offer good value for money.

The consultation procedure required under s.20 is as follows:

1. Notice of intention

A notice of intention must be served on the affected leaseholders first.

The notice must set out the works being proposed and explain why they are necessary. Leaseholders must be informed that they are entitled to put forward written observations to the landlord within 30 days, nominating if they wish a suitable contractor to undertake the works.

The landlord must then consider the leaseholders’ views in their decision-making process.

2. Notice of estimates

After the 30-day period expires, the landlord should obtain at least two estimates from separate contractors. If leaseholders have made nominations, the landlord must try to obtain an estimate from the contractor who received the most nominations. In any event, one of the estimates must be from a contractor wholly unconnected to the landlord to prevent any potential bias.

Notice of the estimates must set out the anticipated charge to each affected leaseholder, alongside the observations previously put forward by leaseholders.

Again, affected leaseholders are entitled to a 30-day period in which they can submit observations, and the landlord must give due consideration to them.

3. Notice of awarded contract

Once the landlord has chosen a contractor to undertake the works, affected leaseholders must be informed. A notice of the award of a contract must state the reasons why the landlord has chosen a particular contractor and again summarise any observations from the leaseholders on that topic.

If a landlord fails to carry out the consultation under s.20 properly, service charges above a statutory minimum amount cannot be collected. Ultimately, this means landlords might become responsible for paying for a much larger proportion of the works than had they followed the letter of the law.

Landlords that fail to follow the statutory consultation procedure, where proposed works fall under s.20, are therefore at risk.

If you are a landlord or tenant in need of assistance, or perhaps you are dealing with a dispute that has already arisen, contact our Litigation and Dispute Resolution team for help. We offer cost-effective initial consultations to deliver tailored advice about how to move forward in a way that suits you. Please call us on 01603 620508 or email the team directly.