Section 20 Major Works and Selling: Your Obligations

Major works in a leasehold building — a new roof, external redecoration, lift replacement, cladding remediation — are expensive and disruptive. When you are trying to sell your flat at the same time, the situation becomes more complicated. Buyers worry about inheriting large bills, their solicitors raise detailed enquiries about liability and costs, and mortgage lenders may hesitate if there is uncertainty about the building's condition or future charges.

This guide explains how the Section 20 consultation process interacts with a property sale, what obligations transfer to the buyer and what stays with the seller, and how to manage the process practically so your sale does not collapse.

What is the Section 20 consultation process?

Section 20 of the Landlord and Tenant Act 1985 (as amended by the Commonhold and Leasehold Reform Act 2002) requires freeholders and managing agents to consult leaseholders before carrying out qualifying works where the cost to any one leaseholder exceeds £250, or before entering into a qualifying long-term agreement for services where the cost to any leaseholder exceeds £100 per year.

The consultation process for qualifying works typically has three stages:

1. Notice of Intention (Stage 1). The freeholder serves a notice describing the proposed works and inviting leaseholders to make observations and nominate contractors. There is a minimum 30-day consultation period.
2. Statement of Estimates (Stage 2). The freeholder obtains at least two estimates (including from any contractor nominated by leaseholders) and serves a notice setting out the estimates. There is another 30-day consultation period.
3. Notification of Award (Stage 3). If the freeholder does not select the lowest estimate, they must provide a statement explaining why within 21 days of entering into the contract.

The entire process can take several months. During this time, the scope and cost of the works crystallise, and leaseholders gain clarity about what they will be asked to pay.

What obligations transfer to the buyer?

The question of who pays for major works when a property changes hands is one of the most common issues in leasehold conveyancing. The answer depends on timing:

Completed works with a demand already served

If the major works are complete and a demand for payment has been served on you (the seller) before completion of the sale, you are generally liable for that demand. This is because the obligation arose during your period of ownership. Your solicitor will usually arrange for the amount to be deducted from the sale proceeds at completion.

Completed works with no demand yet served

If the works are complete but the managing agent has not yet issued a demand, the position is more nuanced. Under most leases, the obligation to pay follows the leaseholder at the time the demand is made. This means the buyer could receive a bill for works that were carried out during the seller's ownership. In practice, solicitors typically negotiate an arrangement at completion — either a retention from the sale proceeds or a contractual undertaking — to ensure the cost is fairly apportioned.

Works in progress

When works are underway at the time of the sale, costs are typically apportioned between seller and buyer based on the completion date. The seller pays for the portion of works attributable to their period of ownership, and the buyer pays for the remainder. This apportionment should be agreed between solicitors before exchange of contracts and documented in thecompletion statement.

Planned works (Section 20 consultation started but works not begun)

If a Section 20 consultation has been started but the works have not yet commenced, the buyer will inherit the obligation as the new leaseholder. However, the buyer's solicitor will want full details of the consultation, the estimated costs, and the proposed timeline. The buyer may seek a price reduction to reflect the anticipated cost, or they may ask for a retention from the sale proceeds.

How major works affect buyer appetite

There is no avoiding the fact that major works can make a property harder to sell. Here is how they affect buyer behaviour:

• Fear of unknown costs. If the final cost of the works has not been confirmed, buyers worry about a bill that could be larger than anticipated. Providing the Section 20 estimates and the managing agent's projected budget helps address this.
• Mortgage lender concerns. Lenders may ask for confirmation that the building is adequately insured during the works, that the works will not adversely affect the building's value, and that the cost per flat is manageable. In extreme cases, lenders may decline to lend until the works are complete.
• Visual impact. Scaffolding, construction noise, and restricted access can put buyers off during viewings. This is a practical issue that can extend your marketing period.
• Negotiation leverage. Buyers will use major works as a negotiating point, often seeking a price reduction that more than covers their anticipated share of the costs.

That said, not all buyers are deterred. Some see major works positively: the building will be in better condition after completion, and the works may add value in the medium term. If you are selling a leasehold flat during major works, framing the works as an investment in the building's future can help.

Liability for completed vs planned works

The distinction between completed and planned works is important because it affects who is liable and how solicitors handle the conveyancing:

The buyer's right to challenge charges

Under section 27A of the Landlord and Tenant Act 1985, any leaseholder can apply to the First-tier Tribunal (Property Chamber) to determine whether a service charge (including major works charges) is reasonable. This right is not time-limited in the way many people assume — a buyer can challenge charges that were incurred before they acquired the lease.

For sellers, this means that if you have paid major works charges that you believe were unreasonable, the buyer inherits the right to challenge them (though any refund would go to the current leaseholder). It also means that buyers may be less concerned about inheriting major works costs if they know they have the right to challenge them after purchase.

Similarly, if the Section 20 consultation process was not properly followed, the buyer can use this as grounds to limit the amount payable to £250 per qualifying work. This can be a significant protection for buyers in buildings where the managing agent's compliance with the consultation requirements is questionable.

Practical advice for selling during major works

1. Gather all Section 20 documentation. Collect every notice, estimate, and communication related to the major works. Your solicitor will need these, and providing them upfront prevents delays from additional enquiries.
2. Get clarity from the managing agent. Ask your managing agent for a written statement of the estimated cost per flat, the expected timeline, and the current reserve fund balance. If interim demands have been served, confirm which have been paid and which are outstanding.
3. Complete the TA7 thoroughly. The LPE1 form and the TA7 both ask about major works. Answer these questions comprehensively. Do not leave blank answers or provide vague responses — this will only generate more enquiries.
4. Discuss apportionment with your solicitor early. Before you accept an offer, understand how major works costs will be handled at completion. Your solicitor can advise on whether a retention, an undertaking, or a price adjustment is the most appropriate approach.
5. Be realistic about pricing. If significant major works are underway or imminent, buyers will factor this into their offer. Pricing your property to reflect the known or anticipated costs will attract more interest than holding out for a higher price and having every offer come in below expectations.
6. Consider timing. If the works are due to complete within a few months, it may be worth waiting until they are finished before listing. A building wrapped in scaffolding is harder to market than one that has just been freshly redecorated, and the completed works may increase the property's value.
7. Check the consultation compliance. If you have any concerns that the Section 20 process was not properly followed, raise this with your solicitor. If there was a procedural failure, it may limit the amount payable, which could be a selling point for buyers. For more detail, see our guide on Section 20 notices when selling a flat.

What to tell your estate agent

Your estate agent should be aware of any major works so they can manage buyer expectations from the outset. Provide them with:

• A summary of the works (what is being done and why).
• The estimated cost per flat and how it is being funded (reserve fund, supplementary charge, or a combination).
• The expected timeline (start date, duration, and expected completion).
• Any positive framing — for example, that the building will have a new roof or freshly decorated exterior when the works are complete.

An agent who can confidently discuss the major works with prospective buyers will be far more effective than one who is caught off guard by questions during viewings.

Sources

• Landlord and Tenant Act 1985, section 20 (limitation of service charges: consultation requirements) — legislation.gov.uk
• Landlord and Tenant Act 1985, section 27A (liability to pay service charges: jurisdiction) — legislation.gov.uk
• Commonhold and Leasehold Reform Act 2002, section 151 (consultation requirements) — legislation.gov.uk
• Service Charges (Consultation Requirements) (England) Regulations 2003 (SI 2003/1987) — legislation.gov.uk
• Leasehold and Freehold Reform Act 2024 — legislation.gov.uk
• LEASE (Leasehold Advisory Service / Leasehold Knowledge Partnership) — lease-advice.org
• First-tier Tribunal (Property Chamber) — guidance on service charge disputes, gov.uk
• Law Society — Leasehold Property Enquiries (LPE1) form
• Royal Institution of Chartered Surveyors (RICS) — Service charge residential management code, 3rd edition
• Association of Residential Managing Agents (ARMA) — guidance on Section 20 consultation, arma.org.uk

Frequently asked questions