What a section 20 consultation means if you're buying a flat

Section 20 is shorthand for a rule in the Landlord and Tenant Act 1985. It says that if a landlord or management company plans major works, or a long agreement for services, they have to consult the leaseholders before committing the money. If they skip the process, or get it wrong, what they can recover from each leaseholder is capped unless a tribunal agrees to waive the rules.

The cap is set by regulations and I'd rather you confirm the current figures with a solicitor than trust a number from me. Thresholds depend on law that can change, and they differ between works and long term agreements.

Why does this matter to you as a buyer? Because the consultation is about the building, not about who owns the flat this month. A notice can be live while you're viewing, and the bill can arrive after you've got the keys.

The process runs in stages, and each one leaves a paper trail you can ask about. In broad terms it goes like this.

1. 1A notice of intention, telling leaseholders the landlord plans works and why, and inviting comments and suggestions for contractors.
2. 2Estimates are gathered, and the landlord sends a second notice with details of the estimates and where you can read them.
3. 3Leaseholders get a window to comment on those estimates.
4. 4Once a contractor is picked, the landlord explains the choice, usually in a notice of reasons, if it wasn't the lowest quote or a leaseholder's nominee.

For works that need no consultation in a given case, such as a genuine emergency, the rules can work differently, and that's a point for your solicitor.

In your purchase, none of this appears on the Land Registry title. It turns up in the seller's answers to the leasehold enquiries, in the management pack from the landlord or managing agent, and sometimes in the service charge accounts or a reserve fund statement. Your conveyancer should ask directly whether any section 20 notices have been served, at what stage the process is, and what the estimated cost per flat is. Ask them to confirm they've done it.

This is where buyers get caught out. Service charges generally follow the lease and the timing of the demand, not the date the works were discussed. If the invoice is issued after you complete, the landlord will usually look to you as the current leaseholder, even if the notices went out months earlier and the seller knew all about it.

If the demand was issued before completion, the seller owes it, but that doesn't always get settled neatly. Some contracts say the seller pays anything demanded up to completion and the buyer pays anything after. Others are looser. Some sellers agree a price reduction or a retention to cover their share.

So the honest answer is that it depends on the contract, the lease and the dates. Don't assume the seller will cover it because it feels unfair that you wouldn't. Get it written into the contract, or accept that it's your bill.

Start with the questions. Ask early, and ask in writing, whether any major works are planned, in progress or recently finished, and for copies of every notice served. Read the last few years of service charge accounts and look at the reserve fund. A tiny reserve in an older block with a worn roof is a flag.

Then use what you learn.

1. 1Ask your solicitor to get a clear contractual position on who pays for works already notified.
2. 2Negotiate the price if a large bill is coming and the seller won't cover it.
3. 3Ask for a retention from the sale proceeds held until the demand is settled, if your solicitor thinks it's workable.
4. 4Check your mortgage lender's view, as some will query a large outstanding works programme.
5. 5Walk away if the answers are vague. Vague usually means expensive.

A quick look at the building helps too. Peeling render, stained ceilings in the communal hallway and a patched roof tell you plenty before any paperwork does.

One trap is the notice that arrives between offer and exchange. If that happens, don't panic, but do pause. Ask for the estimates and your likely share, then decide whether the price still makes sense.

Another is the seller who says there's nothing planned, when the managing agent's pack says otherwise. Trust the paperwork. Your solicitor can raise further enquiries, and it's far cheaper to do that now than argue later.

Third, don't confuse a consultation with a final bill. Estimates can move, and the amount you finally pay can differ. Equally, you can challenge the reasonableness of service charges at the First-tier Tribunal, but that's a slow, stressful route and not a plan for buying. Better to price the risk in at the start.

If any of this relies on law that may have changed since you read it, confirm it with a solicitor who handles leasehold sales regularly.