Section 20 Works (Freeholders)
Section 20 (S20) is a clause in the Landlord and Tenant Act 1985, designed to protect leaseholders from paying unnecessarily large sums of money for work being carried out on their building.
By law, leaseholders have to be consulted before a landlord is able to carry out works above a certain value. If a landlord or their agent doesn’t follow set consultation procedures before carrying out work on a building, the leaseholder’s contribution to the costs of the work will be capped.
For the purposes of S20, right to manage companies (RTMs) and residents’ management companies (RMCs) are included under the definition of a landlord.
What is the S20 procedure?
If a leaseholder’s contribution to the work is estimated to or does exceed £250, an S20 consultation needs to be carried out. VAT and any consultancy fees must be included when calculating the estimated cost.
Step 1: A Notice of Intention must be served, setting out the proposed works and why they’re necessary. Comments and contractor nominations from leaseholders should be invited.
Step 2: Once estimates for the work in question have been received, a Statement of Estimates notice must be served to all leaseholders, detailing the costs and inviting any comments.
Step 3: Once the contract is awarded, the landlord has to issue a Notice of Reasons, explaining why they chose not to opt for the cheapest estimate or the nominated contractor, if that is indeed the case.
If landlords, RMCs or RTMs fail to consult with leaseholders properly before starting work, they will be penalised and will only be able to recover £250 per leaseholder, no matter what the final bill comes to.
How long does S20 take?
Leaseholders must be given at least 30 days to reply with their comments for stages one and two, although it would be wise to allow for more than this to account for any postal delays. The overall process could take three months as a minimum to complete.
Why choose Cavendish Surveying
We’re a private practice, regulated by the Royal Institution of Chartered Surveyors and have years of experience behind us. If you need any help or advice relating to S20 or anything else, get in touch with the team today.