The Section 20 consultation process

Why the process exists

The Section 20 consultation process exists to stop freeholders and managing agents from awarding contracts to connected or overpriced contractors without leaseholders having any say. Before the Commonhold and Leasehold Reform Act 2002 introduced these rules, landlords could charge leaseholders for major works with little transparency and no obligation to seek competitive estimates. The 3-stage process gives leaseholders the right to be informed, to comment, and to suggest their own contractor.

When does the process apply?

Two thresholds trigger the consultation requirement:

• Qualifying works: any works where the cost to any single leaseholder will exceed £250 (including VAT). This covers repairs, maintenance, improvements, roof works, redecoration, window replacement, lift repairs, and so on.
• Qualifying long-term agreements: any contract for services lasting more than 12 months where the annual cost to any single leaseholder will exceed £100 (including VAT).

Stage 1: Notice of intention to carry out works

The landlord must serve a formal notice on each qualifying leaseholder and on any recognised tenants' association. The notice should describe the proposed works or agreement, why they are needed, and where the work will happen if relevant.

• Leaseholders must be invited to make written observations within a set period (usually 30 days from the date of the notice).
• They must also be invited to nominate a contractor from whom the landlord should try to obtain an estimate.
• You should reply in writing within that window if you want your comments or nomination on record. Keep copies of everything you send.

Stage 2: Statement of estimates

The landlord must obtain at least two estimates for the work (or for the proposed long-term agreement). At least one estimate must be from a contractor who has no connection with the landlord. If you nominated a contractor at stage 1, the landlord must seek an estimate from them unless there is a good reason not to.

• A summary of the estimates, and often more detail, must be sent to leaseholders so they can compare costs and scope.
• You usually have another 30 days to send written observations on the estimates.
• You normally have a right to inspect underlying documents at the landlord's address without charge.

Stage 3: Award of contract

If the landlord chooses the contractor with the lowest estimate, or a contractor you nominated at stage 1, they can usually move to appoint that contractor without extra explanation. If they pick someone else, they must serve a notice on leaseholders within 21 days explaining why that choice is reasonable.

• After a lawful appointment, the works or agreement can go ahead under the consulted terms.
• If stages are skipped or handled badly, your liability for the cost can be capped and you may have routes to challenge the charge. Take advice before refusing to pay.