What is Section 20 Consultation for Homeowners and why does it matter?

 

What is Section 20?

Section 20 is a legal process that prevents a landlord spending large amounts of money (that will be charged as a variable service charge) without consulting with the people who will be paying that service charge. At Raven, this process affects Leaseholders and Shared Owners.

It affects both one-off works and contracts and if the landlord does not consult, charges can be capped. There is a tribunal service to resolve any disputes about the process or charges raised by the landlord.

What is the process?

The landlord must serve a series of Notices as outlined below and after each Notice allow time for residents to respond.

  • Notice of Intention: the first Notice outlines what the work is and why the landlord wishes to undertake the work. This Notice also allows residents to nominate a contractor to undertake the work.
  • Notice of Estimates: the second Notice outlines the prices obtained at tender and also summarises all observations received in response to the first Notice.
  • Notice of Award: the final Notice is not always required, but will specify who has been appointed to undertake the work and summarises all observations received in response to the second Notice.

Once the consultation is complete, Raven would start the work and then issue the invoice for the charges after the work is finished and then inspected. The invoice has to be issued within 18 months.

Why do observations matter?

Raven has altered or cancelled a number of projects in recent years due to observations received; these are important in confirming that we are doing the right work at the right price and that it matters to residents. Where the work is essential maintenance we have limited flexibility on how to proceed, but where the work is not essential for example to upgrade or improve a service it is very important that responses are sent in to the consultation, even if they are just to clarify something. As Raven has to consider all observations, this is legal protection from us acting unreasonably.

What if the work is urgent?

Section 20 consultation typically takes at least three months to complete and occasionally work cannot wait that long especially if there is a Health & Safety risk. In these circumstances, we manage the situation on a case by case basis but we would usually apply to the tribunal for ‘dispensation’ from the need to consult to allow the costs to be recovered without following the statutory process. The tribunal would require us to keep residents informed about an application for dispensation they are affected by.

If you have more questions related to this please contact Raven's Home Ownership Team by calling 0300 123 3399 or emailing homeownership@ravenht.org.uk