For any Residents’ Management Company (RMC), few responsibilities are as significant, or as scrutinised, as the planning and delivery of major works.
These large-scale maintenance or improvement projects are necessary to safeguard the long-term value of a building. They also come with complex legal requirements and substantial costs that directly affect leaseholders through their service charges.
This guide outlines what major works are, how the legal Section 20 consultation process operates and how RMC directors and their residents can engage effectively to ensure projects are well-managed, transparent, fair and compliant.
What Are Major Works?
“Major works” refers to significant repair, maintenance or improvement projects carried out on a block of flats or estate. The key definition is set out in the Landlord and Tenant Act 1985: major works are any works where the cost to any individual leaseholder exceeds £250.
Typical examples include:
- Roof repairs or replacements
- External redecorations or façade refurbishment
- Lift modernisation or replacement
- Fire safety works and cladding remediation
- Replacement of communal heating or electrical systems
- Structural repairs to balconies or car parks
- Major landscaping or resurfacing of communal areas
While day-to-day repairs might be covered under routine maintenance, major works are capital projects (often cyclical or one-off) that require careful budgeting and statutory consultation.
The Section 20 Consultation Process
Whenever proposed works are expected to cost any one leaseholder more than £250, the RMC (as landlord or managing agent acting on its behalf) must carry out a formal consultation with leaseholders under Section 20 of the Landlord and Tenant Act 1985, as amended by the Commonhold and Leasehold Reform Act 2002.
This consultation ensures leaseholders are fully informed and can comment or nominate contractors. The process is typically divided into three stages:
1. Notice of Intention
This initial notice informs leaseholders of:
- The proposed works and reasons they are necessary
- The right to inspect any supporting documents (e.g. surveyor reports)
- The right to make written observations within 30 days
- The right to nominate a contractor (if applicable)
This stage allows residents to raise concerns early, suggest alternatives and ensures transparency.
2. Notice of Estimates
After considering initial feedback, the RMC must obtain at least two estimates (one of which, where possible, should be from an independent contractor unconnected to the landlord or agent). Leaseholders are then served with a Notice of Estimates, which must include:
- A summary of all estimates obtained
- Access for leaseholders to inspect the full tenders and specifications
- An invitation to make further written observations within 30 days
This stage allows leaseholders to compare costs and quality before the RMC makes a final decision.
3. Notice of Reasons
Once the contract is awarded, the RMC must issue a third notice, the Notice of Reasons. This explains:
- Which contractor has been appointed
- The reasons for their selection (particularly if not the lowest bidder)
- A summary of how any leaseholder observations were considered
Failure to comply properly with Section 20 procedures can have serious consequences: the RMC may be unable to recover more than £250 per leaseholder, even if the actual cost is far higher. Compliance, therefore, is both legally and financially essential.
Service Charge Implications
Major works are typically funded through leaseholders’ service charges. Depending on the lease, the RMC may have the right to demand payment in advance (through a reserve or sinking fund) or to issue a specific demand once works are approved.
Reserve and Sinking Funds
Well-managed blocks often maintain a reserve or sinking fund to spread the cost of major works overtime. This approach avoids sudden large demands and ensures funds are available when works become necessary.
Where no such fund exists, RMCs must usually issue section 20B-compliant demands once costs are incurred, potentially leading to substantial one-off bills for leaseholders.
Budgeting and Transparency
Good practice involves early forecasting of major works through planned maintenance schedules, ensuring leaseholders have long-term visibility of likely expenditure. Transparent communication about costs and timelines builds trust and minimises disputes.
Common Challenges for RMCs
Even with the best intentions, RMC directors can encounter difficulties in managing major works effectively. Some common pitfalls include unclear lease terms, some leases restrict the type of improvements or the way costs can be apportioned.
Some meet resident resistance due to high costs, lack of consultation or poor communication which can lead to complaints or challenges. Balancing value for money with quality and reliability is critical and without adequate reserves, works may be delayed or require short-term borrowing.
Professional support from managing agents, surveyors or legal advisors is often invaluable to ensure compliance and cost control.
Advice for Residents and Leaseholders
Major works can be daunting, especially when costs are high or timescales long. However, leaseholders also have rights and responsibilities within the process. Some top tips from us include:
Firstly, understand your lease. The lease will set out which parts of the building you are responsible for, how costs are shared and the landlord’s obligations to maintain or improve the property. Understanding these terms helps clarify what can and cannot be charged through the service charge.
Involve yourself in the process. Respond to Section 20 notices, review specifications and take the opportunity to comment or nominate contractors. Constructive feedback can influence decisions and ensure resident perspectives are considered.
Leaseholders have the right to inspect supporting documents, such as surveyor reports or tender summaries. Doing so builds confidence in the necessity and value of the works, and if you are aware that major works are upcoming, financially plan. Ask your managing agent or RMC for a copy of the maintenance plan or reserve fund forecast.
Conclusion
Major works are an inevitable part of maintaining shared buildings – essential to preserving structural integrity, safety and long-term value. For RMCs, the key lies in planning ahead, complying with the Section 20 process and engaging transparently with leaseholders.
For residents, active participation and understanding your rights under the lease can make the process smoother, fairer and more collaborative. Handled correctly, major works are not just an expense, they are an investment in the quality, safety and sustainability of the building.
