Landlord and Tenant Act 1985 Section 20 Explained

If you're a volunteer director of an RTM or RMC, Section 20 of the Landlord and Tenant Act 1985 is the single most important piece of legislation you need to understand. It governs when you must consult leaseholders before spending their money on major works — and the consequences of getting it wrong are severe.

This guide explains the law in plain English, specifically for volunteer directors who aren't property professionals. It covers England; Wales has its own consultation regulations.

What Section 20 actually says

Section 20 of the Landlord and Tenant Act 1985 (as substituted by Section 151 of the Commonhold and Leasehold Reform Act 2002) limits the amount a landlord can recover through service charges for qualifying works or qualifying long-term agreements — unless the landlord has followed the prescribed consultation process, or the tribunal has dispensed with it.

The two key thresholds, both set by the Service Charges (Consultation Requirements) (England) Regulations 2003:

Works: Section 20 applies to qualifying works where the cost to any single leaseholder exceeds £250 (regulation 6)
Long-term agreements: it applies to a qualifying long-term agreement (any agreement for a term of more than 12 months) where any single leaseholder's share exceeds £100 in an accounting period (regulation 4)

These thresholds are per leaseholder, not per block. In a 10-flat block with equal shares, qualifying works would be triggered at a total cost above £2,500 (10 × £250). With unequal shares, test the flat with the largest share.

Who is "the landlord" for Section 20 in your block?

Section 20 puts the consultation duty on "the landlord". In a self-managed block, who that is depends on how the block is run.

An RMC that owns the freehold is the landlord. The company consults.
An RTM company is the landlord for these purposes. The next section explains why.

Section 20 after right to manage

When leaseholders acquire the right to manage, the Commonhold and Leasehold Reform Act 2002 applies the service charge sections of the 1985 Act — sections 18 to 30, which include section 20 — to the RTM company. Schedule 7, paragraph 4 provides:

"(1) Sections 18 to 30 of the 1985 Act (service charges) have effect with the modifications provided by this paragraph. (2) References to the landlord are to the RTM company."

So for Section 20, the RTM company is the landlord. It is the RTM company that must consult before works over £250 a flat or a qualifying long-term agreement, and it is the RTM company's recovery that is capped if it does not.

That follows from what the company takes over. Section 96 of the 2002 Act makes the landlord's management functions under the leases "instead functions of the RTM company", and defines management functions as "functions with respect to services, repairs, maintenance, improvements, insurance and management". Commissioning major works is one of them.

Three RTM-specific points directors miss:

1. The freeholder can count as a "tenant". Paragraph 4(3) of Schedule 7 adds that, for these sections, "References to a tenant of a dwelling include a person who is landlord under a lease of the whole or any part of the premises (so that sums paid by him in pursuance of section 103 of this Act are service charges)." Section 103 makes the landlord pay the RTM company the share of costs that falls on flats or units not held by qualifying tenants. Where your freeholder makes those payments, the cautious course is to serve your Section 20 notices on the freeholder as well as on every leaseholder, because on the wording it is one of the "tenants" whose contribution is being consulted on.

2. Costs from before you took over are not yours to collect. Section 97(5) provides that the RTM company is not entitled to be paid so much of the service charges "as is required to meet costs incurred before the right to manage was acquired". Works the freeholder or its agent commissioned before the acquisition date were theirs to consult on; new works and new contracts from that date are the RTM company's.

3. Existing contracts arrive with notices, not consultation. Section 92 requires the outgoing manager to give notices about existing management contracts to the contractor and to the RTM company. Any new agreement the RTM company then enters for more than twelve months is its own, and is a qualifying long-term agreement needing consultation if any leaseholder's share will exceed £100 in an accounting period.

Why this matters for RTM and RMC directors

Professional agents have systems and staff to run consultations. Volunteer directors typically have neither, which is why the cap bites hardest in self-managed blocks.

The consequence of non-compliance is straightforward: if you don't consult properly, the maximum you can recover from each leaseholder is capped at £250 for works (or £100 per accounting period for long-term agreements), unless the tribunal grants dispensation under section 20ZA. The rest of the cost does not disappear — the company still owes the contractor — but it can no longer be recovered through the service charge.

For a £50,000 roof replacement on a 10-flat block with equal shares, failing to consult means recovering £2,500 instead of £50,000. That £47,500 shortfall is the company's problem.

The consultation process in brief

For qualifying works that are not carried out under a long-term agreement and for which public notice is not required — the usual position for a self-managed block — the requirements are in Schedule 4, Part 2 of the 2003 Regulations. In outline:

Stage 1 — Notice of intention: Write to every leaseholder (and any recognised tenants' association) describing the proposed works, explaining why they're necessary, and inviting written observations and contractor nominations within the relevant period — 30 days from the date of the notice. Use our Section 20 Notice Generator to draft the notice for each stage.

Stage 2 — Obtain estimates: If leaseholders nominated a contractor, try to obtain an estimate from the nominee, following the rules on whose nomination to use when there are several. At least one estimate must come from a person "wholly unconnected" with the landlord — and where the landlord is a company, a director, or a close relative of a director, counts as connected.

Stage 3 — Notice of estimates: Supply every leaseholder with a statement of at least two of the estimates and a summary of the Stage 1 observations with your response, make all the estimates available for inspection, and invite comments within a further 30 days.

After the contract is awarded: within 21 days of entering into the contract, give notice of your reasons for choosing that contractor — unless you chose a nominated contractor or the lowest estimate, in which case this step does not apply.

For a full step-by-step walkthrough, see our complete Section 20 consultation guide.

Common situations directors face

"The roof is leaking — can we skip the consultation?"

Not by deciding to. There is no emergency exemption written into section 20 itself. What exists is dispensation: under section 20ZA(1), the tribunal may dispense with all or any of the consultation requirements "if satisfied that it is reasonable to dispense with the requirements". Genuinely urgent works are a typical reason to apply — but it is the tribunal's decision, not the directors'.

If the works cannot wait, do what is needed to make the building safe, record why, and apply to the First-tier Tribunal (Property Chamber) for dispensation promptly. Our dispensation guide, linked above, covers how the tribunal approaches it.

"All the leaseholders agree verbally — do we still need to consult?"

Yes. Section 20 limits contributions unless the consultation requirements have been complied with or dispensed with by the tribunal. Informal agreement is neither. Verbal consent does not replace the prescribed notices and response periods.

"We're renewing the cleaning contract — is that a Section 20 issue?"

If the new agreement is for a term of more than 12 months and any leaseholder's share exceeds £100 in an accounting period, yes. This catches many directors off guard: grounds maintenance, cleaning, lift and fire-alarm maintenance contracts, and a managing agent's appointment, can all be qualifying long-term agreements when they run for more than a year.

"What about the major works done before we took over management?"

If the works were commissioned by the previous landlord or managing agent before the RTM company acquired the right to manage, the consultation obligation was theirs, and under section 97(5) of the 2002 Act the RTM company cannot collect service charges to meet costs incurred before acquisition. New works and new contracts from the acquisition date are the RTM company's.

Related legislation

Section 20 doesn't exist in isolation. Key related provisions:

Section 20B — the 18-month rule for service charge demands
Section 20C — allows leaseholders to apply to the FTT for an order that legal costs incurred by the landlord in connection with tribunal proceedings should not be passed on through the service charge
Section 21B — requires every service charge demand to be accompanied by a summary of the tenant's rights and obligations (the landlord's name and address is a separate requirement under section 47 of the Landlord and Tenant Act 1987)

Planning your timeline

Use our free Section 20 Timeline Calculator to map out the statutory deadlines for your consultation. Enter your intended start date and get the full 3-stage timeline with actions at each step. Before you start, work through the Section 20 consultation requirements checklist — it covers every qualifying condition and notice requirement in a pre-flight format.

The two notice periods alone add up to at least 60 days, before allowing time to gather estimates. In practice, allow 3-5 months from the first notice to starting works.

What the 2024 reforms mean for Section 20

At the time of writing (October 2026), legislation.gov.uk lists amendments to section 20 made by the Leasehold and Freehold Reform Act 2024 that have not yet been brought into force. Until they are, the rules described in this guide remain the operative ones. Check the "Changes to legislation" panel on the section 20 page before relying on this guide for works planned well into the future.

Sources

This guide applies to England; Wales has its own consultation regulations. This is general information, not legal advice. For specific advice on your consultation obligations, contact a solicitor specialising in leasehold law or the Leasehold Advisory Service (LEASE).