Section 20 and 20B essentials for RTM directors

"Qualifying works" is defined at section 20ZA of the Landlord and Tenant Act 1985 as works on a building or other premises. The trigger for consultation is the per-leaseholder contribution test in Schedule 4 of SI 2003/1987: where any one leaseholder’s contribution would exceed £250, the works require consultation. The same per-contribution rule (£100 per year) applies to qualifying long-term agreements under Schedules 1 and 2.

Section 20B has no dispensation mechanism. The only route is to demonstrate that the section 20B(2) notification was served in writing within 18 months of the cost being incurred. If that notification was served in time, serve the demand citing the prior notification. If no notification was served and the 18-month window has closed, the cost is not recoverable from leaseholders under s.20B(1).

Yes. Under section 96 of the Commonhold and Leasehold Reform Act 2002, the RTM company acquires the management functions previously exercised by the landlord, which include the function of carrying out qualifying works and consulting on them. The RTM company serves the Section 20 notices directly. The freeholder remains the freeholder. The transfer is of management functions, not of the legal estate.

Schedule 4 paragraph 6 of SI 2003/1987 requires the landlord to "have regard to" observations and nominations. Picking a different contractor is not in itself a breach. Where the contractor selected is not the lowest estimate, the rationale must address the observations received and explain the basis for the selection. Failing to record the reasoning is what creates the s.20ZA dispensation risk if the matter reaches the tribunal.