Section 20 Major Works is a mouthful and can sound intimidating to non-property experts. Laura Severn, Director at LMP Law, explores the history of leases and where Section 20 Major Works plays it part.

History of Leasehold Law

Leasehold law is complicated, there’s no getting away from it. When did it all start?

Back in days of old, the landowners really ruled and tenants had little say. Think Magna Carta times and Tenants-in-chief…who were major landowners who held their property directly from the Crown and their heirs. It all stems from Medieval Feudal Law, when families were able to live and work on a plot of land in exchange for providing their produce or trade services to the landowners. Sub-tenants themselves could then lease out portions of their land and could have sub-sub-tenants each taking a portion of their tenant’s income or goods. This was called subinfeudation. 

Now we’ve got Buy to Let properties and within that come tenancy issues…but’s that an article for another day!

Changing Landowner Times

Further down the timeline, the monarchy took control of the land and imposed tax on landowners to standardise the feudal system….and in the 13th century, estates were created.

The rules stated that “estate in fee simple” would allow families to live and work on the land in return for providing the landowner with money or a service, and their agreement would allow the estate to be inherited by the heirs so that families could keep the land rights within the family.

An “estate for life” however, would allow the sub-tenant to enjoy all of the products of the land and the fruits of their labour for the duration of his life, but ownership would revert to the original landowner who granted the land rights to the estate.

20th Century Living

Jump forward in time to post-war prefabs and constructions to help families live in new dwellings. The 1950s in the UK had a huge surge of flats built, under a lease from the landowner.  The Leasehold Reform of 1967 came into play to ensure that landlords and tenants had rights to protect them both. 

Here is the excerpt from the government website on legislation:

Leasehold Reform Act 1967

1967 CHAPTER 88

An Act to enable tenants of houses held on long leases at low rents to acquire the freehold or an extended lease; to apply the Rent Acts to premises held on long leases at a rackrent, and to bring the operation of the Landlord and Tenant Act 1954 into conformity with the Rent Acts as so amended; to make other changes in the law in relation to premises held on long leases, including amendments of the Places of Worship (Enfranchisement) Act 1920; and for purposes connected therewith.

[27th October 1967]

Ultimately, let’s not evict elderly leaseholders out of their dilapidated homes until their leases expire, which is when the Leasehold Reform Act 1967 came into force enabling leaseholders of houses to acquire their freehold.

Jump forward another 20 years and Margaret Thatcher’s Conservative government introduced the Landlord and Tenant Act 1987 giving leaseholders a right of first refusal where landlords wished to sell their freeholds…think how many people you know who bought off the council, for example. Then the leasehold laws updated once again with the introduction of the Leasehold Reform Housing and Urban Development Act 1993 enabling leaseholders to extend their leases or acquire their freehold.

Clearly the laws surrounding homeownership, home living and land per se is convoluted with many leases having increasingly confusing stipulations. 

So, back to understanding what is a Section 20 Notice when it comes to major works, and what exactly are major works….?

What is a Section 20 Notice?

A section 20 notice (S20) is a notice to tell its leaseholders that the landlord intends to carry out work or provide a service that leaseholders will have to pay towards. The landlord must serve a S20 on any leaseholder who will be affected by the work or receive the service.  If you are a managing agent and are collecting service charges, it’s always advisable to communicate with the leaseholders, as there is less likelihood of a dispute if there is a constant open dialogue.

What are examples of Major Works?

Here are just some examples of major works- repairing, replacing or decorating the:

• roof
• window frames
• exterior brickwork
• communal areas
• soffits
• facias
• external guttering
• downpipes
• pathways

What is the Section 20 Process?

If the landlord (often known as the “freeholder”) needs to do some major works on its property, there has to be a process with its leaseholders first.  A landlord cannot just go ahead with its major works without consulting its leaseholders first.

The S20 process offers leaseholders a chance to comment on the proposed work. If the landlord goes ahead with the work without a thorough process being evidenced (e.g. surveyor’s report) it be then be challenged in the First-tier Tribunal (Property Chamber).

Who Must be Consulted With the Section 20?

Consultation notices must be sent both to individual leaseholders and to any Recognised Tenants’ Association. 

Landlords must invite leaseholders to nominate possible contractors ….again, there are deeper clauses tucked in a lease. 

As lawyers ourselves, we cannot emphasise how much every party involved needs to read their lease! 

Who Pays for the Major Works and When Must the Leaseholder be Consulted?

The Section 20 (under Section 20 of the Landlord & Tenant Act 1985) explains that the thresholds around when the leaseholders need to be consulted are:

– when and IF the works are going to cost over £250 per leaseholder, or

– if the qualifying long term agreement will cost the leaseholder more than £100 within a 12 month period

Conclusion

Communication is always key when it comes to services charges, repairs, surveys and changes.  It’s much easier if freeholders and leaseholders have some form of open dialogue especially when it comes to major works. 

Laura Severn is a Director at LMP Law, specialist lawyers with a keen focus on the property management industry, with over 20 years combined experience in property law.

LMP Law team are currently offering FREE webinars regarding all things property law and leasehold law related. The link is here – do join them, we’ll be there too!