Section 20 consultation

It's named after section 20 of the Landlord and Tenant Act 1985. It applies to your RTM company or residents' management company just as it does to a landlord.

When it applies

• Works: when any one leaseholder's contribution would be more than £250.
• Long-term agreements: when a contract lasting more than 12 months would cost any one leaseholder more than £100 a year. See qualifying long-term agreementQualifying long-term agreementA contract made by or for the landlord (or the company managing the block) for a term of more than 12 months, which needs Section 20 consultation if any leaseholder would pay more than the set amount a year towards it..

The usual steps for works

1. Notice of intention: describe the works, say why they're needed, and invite comments and nominations of contractors within 30 days.
2. Estimates: get at least two, at least one from a contractor wholly unconnected with the company or its directors.
3. Statement of estimates: send the estimates and invite comments within another 30 days.
4. Award: if you don't choose a nominated contractor or the lowest estimate, send a notice of reasons within 21 days of signing the contract.

If you don't consult

Each leaseholder's contribution is capped at the threshold unless the tribunal grants dispensationDispensationAn order by the First-tier Tribunal excusing a landlord or management company from some or all of the Section 20 consultation requirements, where it is reasonable to do so..