Caps contributions without consultation: LTA 1985 s. 20
Under LTA 1985 s. 20, tenant contributions for qualifying works or long-term agreements are limited unless consultation is met or dispensed by tribunal.
Official text
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LTA 1985 s. 20 — United Kingdom
Where this section applies to any qualifying works or qualifying long term agreement, the relevant contributions of tenants are limited in accordance with subsection (6) or (7) (or both) unless the consultation requirements have been either— complied with in relation to the works or agreement, or except in the case of works to which section 20D applies, dispensed with in relation to the works or agreement by (or on appeal from) the appropriate tribunal . In this section “ relevant contribution ”, in relation to a tenant and any works or agreement, is the amount which he may be required under the terms of his lease to contribute (by the payment of service charges) to relevant costs incurred on carrying out the works or under the agreement. This section applies to qualifying works if relevant costs incurred on carrying out the works exceed an appropriate amount. The Secretary of State may by regulations provide that this section applies to a qualifying long term agreement— if relevant costs incurred under the agreement exceed an appropriate amount, or if relevant costs incurred under the agreement during a period prescribed by the regulations exceed an appropriate amount. An appropriate amount is an amount set by regulations made by the Secretary of State; and the regulations may make provision for either or both of the following to be an appropriate amount— an amount prescribed by, or determined in accordance with, the regulations, and an amount which results in the relevant contribution of any one or more tenants being an amount prescribed by, or determined in accordance with, the regulations. Where an appropriate amount is set by virtue of paragraph (a) of subsection (5), the amount of the relevant costs incurred on carrying out the works or under the agreement which may be taken into account in determining the relevant contributions of tenants is limited to the appropriate amount. Where an appropriate amount is set by virtue of paragraph (b) of that subsection, the amount of the relevant contribution of the tenant, or each of the tenants, whose relevant contribution would otherwise exceed the amount prescribed by, or determined in accordance with, the regulations is limited to the amount so prescribed or determined.
Section 20 is the reason a freeholder cannot simply commission major works and send the bill. Where the section applies to qualifying works or a qualifying long term agreement, the relevant contributions of tenants are limited unless the consultation requirements have been complied with, or dispensed with by the appropriate tribunal. The limit is not a penalty in damages - it operates directly on how much of the cost can be taken into account in working out what each leaseholder owes.
What is striking on a first reading is what is not in the section. The familiar figures - the threshold above which works are "qualifying works", the amount a long term agreement must exceed - appear nowhere in the text. Subsection (5) says the appropriate amount is "an amount set by regulations made by the Secretary of State", and the regulations may express it either as a fixed sum or as an amount that results in any one leaseholder's contribution reaching a prescribed figure. The consultation requirements themselves - the notices, the observation periods, the obtaining of estimates, the duty to have regard to observations - are likewise in regulations, not here.
Subsections (6) and (7) explain the two shapes the cap takes. Where the appropriate amount is set as a total, the recoverable costs are limited to that amount. Where it is set by reference to an individual contribution, each leaseholder whose contribution would otherwise exceed the prescribed figure has it cut down to that figure. Dispensation is available from the tribunal - and subsection (1)(b) notes one exception where it is not, for works to which section 20D applies. Dispensation is not automatic and turns on what prejudice the leaseholders actually suffered from the failure to consult.
When it applies
Major works to a roof, windows or external decoration commissioned without notices to the leaseholders.
A long-term contract for lifts, cleaning or insurance entered into without consultation.
A consultation that was started but where the leaseholders' observations were ignored.
A freeholder applying to the tribunal after the event to have the consultation requirements dispensed with.
A leaseholder trying to work out how much of a large bill is actually recoverable.
What this section does not say
×It does not contain the threshold figures. The amounts that make works or an agreement "qualifying" are set by regulations, not by this section.
×It does not set out the consultation procedure. The notices, timescales and duty to have regard to observations are in the regulations made under it.
×It is not a reasonableness test. Consulted-on works can still be challenged as unreasonable under section 19, and unconsulted works can still be reasonable but capped.
×It does not mean the leaseholder pays nothing. The contribution is limited to the appropriate amount, not extinguished.
×It does not bar a landlord who failed to consult. Dispensation can be granted by the tribunal, subject to the exception for section 20D works.
Worked examples
Invented situations, written to show how the wording bites. They are not real cases, not judgments and not precedent, and nothing here predicts what would happen in yours.
Illustrative example
Every window in a block is replaced over one summer. The first any leaseholder knew of it was scaffolding going up, and the bill that follows is eleven thousand pounds a flat.
How the wording applies
Where section 20 applies to qualifying works, the contributions are limited unless the consultation requirements were complied with or dispensed with by the tribunal. The striking thing on reading the section is that the familiar threshold figure appears nowhere in it - subsection (5) leaves the amount, and the consultation procedure itself, to regulations. The fact that decides the size of the reduction is therefore not in this section at all, and the limit caps the contribution rather than extinguishing it.
How the parties settled it
The freeholder agrees to reduce each flat's contribution to a figure the leaseholders accept, spread over twenty-four months without interest, and to consult properly on the planned roof works next year.
Illustrative example
A freeholder signs a five-year contract for lift maintenance and insurance without notifying the leaseholders, then applies to the tribunal after the event for dispensation from the consultation requirements.
How the wording applies
Dispensation is expressly available, so a failure to consult is not automatically fatal - subject to the exception for section 20D works. What the application turns on is prejudice: whether the leaseholders were actually worse off for not having been consulted, rather than whether the landlord followed the procedure. And consultation is a separate question from price: consulted-on works can still be challenged as unreasonable under section 19.
How the parties settled it
The freeholder agrees to obtain two comparison quotes and to reduce the recoverable annual figure to the lower of them, and the leaseholders agree not to oppose the dispensation application on that basis.
The same problem elsewhere
The other legal systems in this collection answer the same everyday problem with their own provisions.
The comparison and these one-line summaries are in English.
Who pays for the roof and the lift: shared building costs in four legal systems
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This page reproduces the text of LTA 1985 s. 20 in force at the date shown and explains it in general terms. It is not legal advice and takes no account of the circumstances of your case, which can change the answer completely. For a live dispute, for limitation periods, and before taking any step in court, consult a qualified lawyer in England and Wales.