section 20 consultation
📖 What is section 20 consultation? Meaning and definition
This consultation process is crucial for tenants who pay service charges, as it ensures they are informed and have an opportunity to comment on proposed works or agreements. It applies when the cost of works or an agreement exceeds a certain amount, preventing landlords from imposing unexpected or unreasonable charges without prior discussion. The process involves the landlord providing notice of the intended works or agreement, allowing tenants to raise issues or suggest alternative contractors.
Failure to conduct a proper section 20 consultation can have significant consequences for the landlord. If the consultation is deemed invalid, for example, because the notice omits material works, the landlord may be limited in the amount they can recover from tenants for those works. Even if a consultation is initially valid, if further works are required midway through a contract for major works, a new consultation may be necessary for those additional works.
Tenants can challenge the validity of a section 20 consultation or the reasonableness of the costs. For instance, they might argue that a warranty period for roof replacement works was too short, or that a settlement agreement required consultation. The First-tier Tribunal often rules on disputes concerning service charge demands and the validity of these consultations, assessing whether the landlord has met their obligations and if the charges are reasonable and payable.
📋 Requirements
- The landlord must provide notice of material works or agreements intended to be carried out.
- The notice must not omit material works.
- A further consultation may be required for additional works arising midway through a contract for major works.
- The consultation must take place before costs are incurred that will be passed on to tenants via service charges.
📝 Procedure
- Landlord identifies the need for major works or an agreement requiring consultation.
- Landlord issues a notice detailing the proposed works or agreement.
- Tenants are given an opportunity to raise issues or provide feedback.
- Landlord considers tenant feedback before proceeding with the works or agreement.
💡 Examples
- A management company planned extensive roof replacement works and had to conduct a section 20 consultation to inform residents and gather their input on the proposed contract and costs.
- When a landlord decided to install new fire alarm systems in a residential building, they initiated a separate section 20 consultation for these specific works, which was not challenged by the leaseholders.
- A settlement agreement reached by a management company was scrutinised to determine if it required a section 20 consultation due to the costs involved.
- Midway through a major re-roofing project, additional unforeseen repairs were identified, prompting the question of whether a further section 20 consultation was needed for these new works.
📚 Legal basis
- Landlord and Tenant Act 1985 (ss.20, 20ZA)
- Commonhold and Leasehold Reform Act 2002
❓ Frequently asked questions
What is the purpose of a section 20 consultation?
The purpose is to ensure that tenants are informed and have a say before landlords undertake major works or enter into agreements that will significantly impact their service charges, thereby promoting transparency and fairness.
When is a section 20 consultation required?
It is required when a landlord plans to carry out major works or enter into certain agreements where the cost to any one tenant will exceed a specified amount, typically £250 for works or £100 for qualifying long-term agreements.
What happens if a landlord fails to carry out a section 20 consultation?
If a landlord fails to conduct a valid section 20 consultation, they may be limited in the amount they can recover from tenants for the works or agreement, often capped at £250 per tenant for works or £100 for qualifying long-term agreements, unless they obtain dispensation from the First-tier Tribunal.
Can a section 20 consultation be partially invalid?
The case excerpts suggest that if a notice omits material works, the entire consultation may be invalid. However, if further works are required midway through a contract, the original consultation remains valid for the works it covered, but a new consultation might be needed for the additional works.
What should I do if I believe my landlord has not followed the section 20 process correctly?
If you believe your landlord has not followed the section 20 process correctly, you can challenge the service charge demand at the First-tier Tribunal (Property Chamber). It is advisable to seek advice from a qualified solicitor specialising in landlord and tenant law.
Does a section 20 consultation cover all costs related to major works?
A section 20 consultation covers the costs of the works for which consultation took place. If additional, material works are identified later, a further consultation might be necessary for those specific new works.