As a leaseholder, you have the right to be consulted if your landlord wants to carry out major works funded by your service charge.
The requirements for this consultation are set out in Section 20 of the Landlord and Tenant Act 1985 and come in 2 or sometimes 3 stages. The detailed procedures can be found in the regulations, Service Charges (Consultation Requirements) (England) Regulations 2003 (‘the Regulations’). Similar regulations have been enacted in Wales.
Stage 1: notice of intention
First, the landlord must tell you about the work they intend to do and the reasons for it and give you the option of a reasonable place and time to go over the details.
You must be given 30 days to make observations, and nominate a contractor that they should ask for an estimate.
Stage 2: notice of estimates
Next, they must give you details of two estimates they have obtained for the works. One estimate must be from a contractor with no connections to the landlord. Again, you have 30 days to make written observations.
Stage 3: notice of who won the contract
The landlord has to tell you who won the contract within 21 days of its award – unless a leaseholder nominated the contractor or the contract is for the lowest tender.
The notice should explain why the landlord chose that contractor and give a summary of the leaseholders’ comments about the estimates, and give you a reasonable place to inspect them.
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If you receive a notice (usually called a section 20 notice) telling you that your landlord is planning to carry out works, it should contain certain information.
It should describe in general terms the works proposed, and specify a reasonable time and place where you can find out what is proposed.
The notice should also explain the reasons for the works and invite you as a leaseholder to give your opinions in writing within 30 days.
It should also tell you of your right to give the name of a contractor to be contacted by the landlord to give an estimatefor the works.
The landlord must consider any observation received by the due date and get estimates from nominated contractors where applicable.
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The second notice for major works (notice of estimates) must be sent by the landlord to each leaseholder and the recognised tenants association, if there is one.
Such notice must include details of at least two estimates that the landlord has obtained. One of the estimates must be from a contractor wholly unconnected with the landlord.
The landlord must invite observations in writing within 30 days and must have regard to any observations received.
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Your lease tells you what a landlord can demand you to pay in the service charge for. If it is not in the lease, there is no obligation to pay it.
Both you and your landlord have the right to ask a First-tier Tribunal (Property Chamber) whether a charge, or a proposed charge, is reasonable – even after a Section 20 consultation.
You can apply to the Tribunal whether or not:
You cannot apply if you have agreed or admitted responsibility for paying the charges, or if a court, tribunal or arbitrator has already decided on the matter.
The Tribunal can decide:
If you are considering legal action, you should get advice from a solicitor. There are other ways to resolve disputes without going to Tribunal, such as through mediation.
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This notice should be given within 21 days of entering into the contract. It must contain the reasons for the award of the contract and give a summary of the leaseholders’ observations regarding the estimates or provide a place at which these could be inspected. This notice is not required where:
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The landlord has a legal obligation to consult for major works. There is an exception to this rule when the landlord makes an application to the Tribunal to dispense with the need to consult.
The Tribunal can dispense with the consultation requirements in a particular case if satisfied that it is reasonable to do so. For example where very urgent works are required (on the grounds of safety etc) or it is difficult to obtain more than one estimate.
Clarification as to what is required to be shown before the court or the Tribunal can grant dispensation, was provided in this case.
You may require the services of a solicitor.
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The law requires the landlord to consult the leaseholder for works if these will cost each individual leaseholder more than £250.
If consultation is not undertaken the landlord cannot recover more than £250 from any individual leaseholder towards the cost of the works unless the Tribunal has dispensed with the requirement to consult.
The landlord may be able to send you a bill for the works before they consult and before they do the works. This may be the case if the lease obliges the landlord to demand any service charges in advance or there is a timeframe set out in the lease when the landlord can demand any service charges.
However, even if the landlord can demand the charges in advance, the consultation requirements must be complied with before the works are started unless the landlord has obtained a dispensation from the Tribunal.
You may require the services of a solicitor, a surveyor or a managing agent.
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If there is a dispute about whether or not your landlord has acted in accordance with the Section 20 consultation process, where required to do so, the matter can be referred to the First-tier Tribunal (Property Chamber) for a determination. Please note that dispensation from the consultation process can be granted retrospectively by the Tribunal.
In cases where the landlord is not required to use the consultation process you still retain the right to challenge the costs if you feel they are unreasonable.
You may require the services of a solicitor, a surveyor or a managing agent.
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