Section 20 Major Works. SAM Conveyancing breaks down leasehold major works payments, otherwise known as 'qualifying works'. Two workers in hard hats and boiler suits are in a lift shaft, repairing the lift.
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You might be asked to contribute towards section 20 major works. Your freeholder should always consult you first.

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What are Leasehold Section 20 Major Works?

10/11/2017
(Last Updated: 29/05/2024)
1,038
9 min read

The Leasehold and Freehold Reform Act 2024 was passed on the 24th May 2024, but is not yet in effect and the date for this is not yet clear. We will update our content as and when the finalised legislation is published.

Some of the expected changes include:

  • 990 year standard lease extension for houses and flats
  • Standardised format for service charge bills, for greater transparency
  • Leaseholders will no longer have to pay their freeholder’s costs when making a claim
  • Freeholders who manage their building directly must belong to a redress scheme, so leaseholders can challenge them if needed (already applies to managing agents)
  • Ban on sale of leasehold houses, except in specific circumstances and schemes
  • Fair and transparent buildings insurance handling fees
  • Removal of two year requirement before statutory extension

While the existing act abolishes ground rent on lease extension and new leases, the new act does not cap ground rent on pre-existing leases.

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Have you been asked to pay for the remediation of a safety defect?


  • Leaseholders protections ensures that you are not liable to pay.
  • If you qualify, you will be protected from the financial burden of remediation costs concerning building safety.
  • If you're trying to sell, you will need a Deed of Certificate to prove that the leasehold is subject to leaseholder protections.
  • Is the freeholder still forcing you to pay for these costs? We can help solve this property challenge.

Major works or 'qualifying works', is major works of maintenance, repair, or improvement to a building that a freeholder is responsible for and towards which the relevant leaseholder/s is/are required to contribute under the terms of the lease. Think of works like lift repairs or fitting a new roof. This article focuses on how the process works if you already own the lease. If you are buying a flat with a section 20 notice in place, read this guide.

The Section 20 part refers to the requirement, under Section 20 of the Landlord & Tenant Act 1985, for freeholders to consult with leaseholders if works are set to cost any one leaseholder more than £250.

Section 20 works meaning:

Section 20 major works are maintenance, repairs or improvements which the leaseholders will have to contribute more than £250 towards per leasehold title and must therefore be consulted on.

The Section 20 clause is intended to protect you as a leaseholder from having to pay unnecessarily large leasehold major works payments for repairs and maintenance carried out to your building: if you're not consulted in the prescribed manner, works costs can be capped at £250 per leaseholder, regardless of the cost to the freeholder.

You should consult the terms lease to find out which repairs, maintenance and improvements are defined as falling under the freeholder's responsibility and which fall entirely under yours. It also sets out yours and your freeholder's rights.

If you don't have a copy of your lease, you can get one from your mortgage lender or from your freeholder (there may be a charge) or by applying to the Land Registry, for £7)

Leasehold major works payments form a part of your service charges but are usually paid for by leaseholders having to make an additional payment on top of the annual service charge.

Reserve/'Sinking' Funds
Most often, to budget for major works, to prevent sudden demands for huge sums of cash from leaseholders and to spread the costs of major works such that they're not just paid for by those resident at the time they are carried out, your freeholder will have set up a reserve or 'sinking' fund, which you and other leaseholders must pay into annually.

What are major works under section 20?

Examples of things which constitute major works include repairing, replacing, or decorating the following:
  • Lift/s
  • Roof
  • Window frames
  • Exterior brickwork
  • Communal areas
  • External guttering
  • Pathways
It can be seen that these sorts of works generally involve more expense but need to be carried out less regularly. Some may be peculiar to your particular lease - if your property has exclusive use of an unadopted/private road for example, you and any other leaseholder/s may well be expected to pay for its upkeep and its maintenance is likely to be classed as major works.

They do not include maintenance and repair of any leaseholder's 'demised premise', i.e. the interior parts of their flats. This article examines major works and considers: If you're thinking of buying or selling a leasehold, our expert solicitors can help you; call us on 0207 112 5388 or simply get a quote by filling in the form below.
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    1

    Do I have to pay for major works?

Yes, as a leaseholder, and you can find the details of what you have to pay for, how you must pay and when you have to pay in your lease, which you signed before you took up ownership of your leasehold property.

If you're buying under the Right To Buy (RTB) or Right To Acquire (RTA) schemes, your landlord must provide an estimate of any service charges for major works and cyclical works you will have to pay during the first five years of your lease.

If the lease says you must pay some of the costs of improvement, the estimate must cover these too.

Once an estimate has been given, the landlord is not allowed to charge you more than that figure during the first five years of your lease, except to take account of inflation.

As with service charges, charges must be reasonable or you can contest them ultimately in the Leasehold Valuation Tribunal.


    2

    How much can Section 20 works cost?

You have to pay for major works, similar to having to pay for service charges, according to:
  • the total cost of the works planned or carried out (generally cheaper if part of a larger contract rather than a one-off job)
  • the size of your block - depending on the cost of works, the smaller the numbers in a block, the higher your contribution will be
  • the size of your home - the larger your flat, the more you will have to pay.
There is no upper limit to how much you can be expected to pay, but your responsibility has to be set out in your lease and your freeholder has to have correctly carried out the full Section 20 leasehold major works consultative process.

    3
    How do you pay for major works (reserve/'sinking' funds etc.)?
The lease sets out how your freeholder expects you to pay for major works, but most often they will have set up a reserve or 'sinking' fund. It operates similar to your service charge account but is purely devoted to major works. Building up funds can mean that leaseholders can effectively pay in advance for major works over a period of time.

If leaseholders cannot pay fully for the major works, freeholders often offer other strategies such as offering extended payment terms, placing a registered charge against the property in lieu of charging, offering shared ownership terms (so taking an ownership share of your property and charging you rent on it) and even buying back a property.

    4
    What rights do you and other leaseholders have regarding major works?

As stated previously, you have the right to be consulted by your freeholder about major works according to Section 20 of the Landlord & Tenant Act 1985 and the key stages the freeholder must satisfy are in section 4 above.

There are many guides available online, for example from various local authorities, which detail best practice by a freeholder wishing to consult about and charge for major works. The key issue, however, is that these guides set out best practice only.

A scrupulous freeholder will properly consult with all their leaseholders well in advance about proposed major works and make the consultation genuinely 2-way, acting on suggestions and reasonable concerns from leaseholders, particularly regarding costs.

They should then carefully manage projects having clearly publicised how and when projects are to be paid for. This should put them in good stead in the long run.

The reality is that the law, once again, only states that freeholders' proposals for major works should be reasonable and the actual method of being reasonable isn't defined further.

    5

    Can I object to a section 20 notice?

You and other leaseholders should always attempt to negotiate with your freeholder directly before bringing in any external agent and your freeholder may have set up an internal dispute resolution service for this purpose.

Failing that, you have various external options:
  • Early Neutral Evaluation (ENE) - both you and your freeholder appoint an independent person to provide a non-binding opinion on the case.
  • Mediation - both you and your freeholder agree to appoint a mediator to try to find a solution.
  • Arbitration - both you and your freeholder agree to be bound by the decision of a mutually-agreed arbitrator (normally a lawyer).
  • County Court - this is normally a last resort stemming from a leaseholder refusing to pay or engage in another form of dispute resolution.
  • Leasehold Valuation Tribunal (LVT) - the Tribunal makes a decision about the major works in terms of reasonableness, quality of work or level of charging involved.
  • Form your own management company to run your property/block under Right to Manage legislation - this is particularly a route to choose if you feel that the current management of your block is poor and/or overly expensive.

    The upside is you remove the incumbent company and run matters between yourselves as leaseholders. The downside is that you are effectively going into business as a company with all its attendant responsibilities and work involved.
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Andrew Boast of Sam Conveyancing
Written by:
Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.
Caragh Bailey, Digital Marketing Manager
Reviewed by:

Caragh is an excellent writer in her own right as well as an accomplished copy editor for both fiction and non-fiction books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey and mortgage related articles.


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