Question 1

How accurate is this section 20 checker?

Accepted Answer

It applies the two consultation triggers in the Service Charges (Consultation Requirements) (England) Regulations 2003 - £250 per leaseholder for qualifying works, £100 per leaseholder per accounting period for a qualifying long term agreement. It covers the three Schedules a private landlord or a self-managing board almost always falls under, and it does not cover the public-notice procedures that apply to contracting authorities under procurement law. It is a guide, not legal advice.

Question 2

Do the £250 and £100 limits include VAT?

Accepted Answer

Yes. The trigger is the leaseholder's contribution under section 20(2) towards the relevant costs, and section 18(2) defines those as the costs or estimated costs incurred or to be incurred by or on behalf of the landlord, which for a residential block is the VAT-inclusive figure: HMRC treats a residential service charge as further payment for an exempt supply, so the landlord cannot reclaim the input tax. Regulation 2(2)(a) says the same for the estimates the regulations require the landlord to make: value added tax shall be included where applicable. A leaseholder's share of £210 plus VAT at 20% is £252, over the £250 works limit, though the figure before VAT is under it. The same applies to the £100 limit for a long term agreement.

Question 3

We are paying for the works out of the reserve fund. Does that avoid consultation?

Accepted Answer

Nothing in section 20 or the Regulations makes the trigger depend on where the money comes from. Section 20(3) turns on the relevant costs incurred on carrying out the works, and section 20(2) measures each leaseholder's contribution by what their lease requires them to pay towards those costs. Neither asks which pot it is drawn from, and money already collected into a reserve was contributed by leaseholders in the first place. Take advice before treating a reserve as a way round the consultation.

Question 4

Can we split a big job into smaller ones to stay under £250?

Accepted Answer

Not safely. Whether items of work are one set is a question of fact, decided in a commonsense way on all the circumstances. In Francis v Phillips [2014] EWCA Civ 1395 the Court of Appeal listed the likely factors as where the works are carried out, whether they fall under the same contract, whether they are done at more or less the same time, and whether they differ in character or are unconnected. Dividing one set up to stay under the threshold invites a challenge on those points. If you are close to the line, consult.

Question 5

What happens if we should have consulted and did not?

Accepted Answer

Recovery is capped at the threshold figure: £250 per leaseholder for the works, or £100 per leaseholder per accounting period under an agreement. The rest is irrecoverable unless the First-tier Tribunal grants dispensation under s.20ZA(1). Dispensation is discretionary, is usually decided on what prejudice the leaseholders actually suffered, and costs time and money to obtain.

Question 6

Does our block count if there are only three or four flats?

Accepted Answer

Yes. There is no minimum building size. A small block reaches the £250 threshold on a smaller total bill than a large one, because the cost is divided between fewer leaseholders - £1,200 of works split four ways is £300 each, already over the line.

Do we have to consult on this? Section 20 checker

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