Keeping you informed of major works (Section 20 notice)

A Section 20 notice is a consultation notice that we have to serve on leaseholders for work to be undertaken where we will charge you more than £250. They’re also served for long-term agreements where we may charge you more than £100 per year.

Notices are served under Section 20 of the Landlord and Tenant Act 1985.

By law, leaseholders have to be given the opportunity to comment on any proposed work and related costs. There are usually three stages which take place at 30-day intervals:

• Stage 1: We’ll write to you with an overview of the service or work we’re considering. You must reply within 30 days with any comments. In some cases, you can nominate a contractor.
• Stage 2: We’ll write to you again and provide details of the quotes we’ve received from the tendering process. This allows us to estimate how much the contract is likely to cost you. You then have a further 30 days to give your feedback.
• Stage 3: If we didn’t go with the lowest quote or a contractor nominated by a resident, we’ll write again to explain why we made our choice. At this stage, we can begin the work and costs will be included in your subsequent service charges.

Sinking funds act as a savings account to pay for large expenses that aren’t part of the usual day-to-day costs. If your block has a sinking fund, it will often be used to cover the cost of cyclical works. If the sinking fund is more than the cost of the work, we won't ask you to pay any more, but we’ll send you a final account so that you know exactly how much of the fund is being used. We’ll only invoice leaseholders if the amount in the sinking fund isn't sufficient to cover the costs.

Section 20 notices are issued for work to communal areas. This means that as per the terms of your lease, all leaseholders have to contribute and can’t be excluded.

You can nominate or suggest a contractor to carry out work that we don’t need to give public notice for. We have to give public notice when the likely cost of a contract is above a certain value (usually over £118,000). In those instances, we have to advertise on the Government's Find a Tender website.

We won’t award a contract or start any work until the consultation has finished.

If we don’t consult you over any qualifying works, the amount we can charge is capped at £250 for one-off works. For long-term contracts we can’t charge more than £100.

There are situations where we might not be able to consult you – mainly where emergency work needs to be carried out immediately. In those instances, we can apply to the First-Tier Tribunal (Property Chamber) to start the work without consultation. But we would still need to comply with any conditions the tribunal might impose.

How we calculate your contribution is set out in the terms of your lease. The most common way is to divide the cost by the number of homes in a building. It might also be based on rateable value, floor area or percentage split.

After your Section 20 notice, you may also receive a Section 20B notice. 

We serve Section 20B notices to tell leaseholders the amount we have spent so far on a major works contract where the final cost calculation hasn't yet been made.

The reason Section 20B notices are served is because the Act limits service charges by imposing a time limit on the making of a demand.

A Section 20B notice is a legal document required under the Landlord & Tenant Act 1985. It is issued to residents if we cannot provide their final service charge statement within 18 months of when the costs were incurred (or by 30 September for Peabody’s standard financial year).    

The notice informs residents that there has been a delay in issuing their final service charge statement and provides the total amount of costs incurred for their block or estate.    

The technical requirement is that the landlord must notify leaseholders and shared owners (not general needs tenants) in writing if they can’t send a payment demand within the 18-month window from when the service chargeable cost was incurred. 

There’s lots of useful information on the Leasehold Advisory Service website. This is a government-funded service that provides independent advice for residential leaseholders. You can also contact us if you have any queries for works specifically related to your block.