Does the managing agent's fee for Section 20 work go to the leaseholders?

Yes, the major works management fee (typically 8-12% of project value) is a service charge cost. It should be disclosed in the original management proposal so leaseholders know what to expect.

Can the freeholder consult instead of the RTM?

No. Once management functions transfer, the RTM company is the responsible party for consultation on works it commissions.

Section 20 for RTM Companies: Who Consults, Who Approves and How

Key takeaway

Once an RTM company acquires the right to manage, it takes on the consultation duty in place of the landlord. The RTM company serves the notices, considers observations, deals with nominations and bears the consequences of getting it wrong - recovery capped at 250 pounds per leaseholder for qualifying works. Directors approve the decisions; the managing agent runs the process. Two points catch RTM boards out: long-term agreements over 100 pounds per leaseholder per year also require consultation, and inherited contracts from the previous manager may need consulting on again.

Once an RTM company takes over management, it is the RTM company - not the freeholder - that has to consult leaseholders under Section 20 before major works. The duty is on the directors; the managing agent runs the process on their behalf.

Who serves the notices?

The RTM company is the landlord for the purposes of Section 20 management functions. Notices are served in its name. Directors should approve the scope, contractor shortlist and the final award.

Director approval points

Approve the works scope before the Notice of Intention is served
Approve the shortlist of contractors invited to estimate
Approve the final contractor selection at Notice of Award stage
Approve any variations during the works that materially change cost

Common mistakes in RTM-run Section 20s

Directors approving things informally that should be minuted
Failing to obtain estimates from leaseholder-nominated contractors
Not consulting on long-term agreements (Type 1 vs Type 2 consultations)
Treating major works fees as included in the standard management fee when they are not

Reporting to leaseholders

Beyond the statutory notices, RTM directors who go a step further - a plain-English summary, a Q&A session, regular email updates during the works - almost always see a smoother project and fewer disputes.

Running an RTM that is about to start major works?

We support RTM companies through Section 20 consultations, contractor management and the leaseholder communication that goes with it. Get in touch before you draft the first notice.

Speak to our team about your block

We manage residential blocks and estates across Romford and East London. If this article raised a question about your specific situation, send it across - we will give you a straightforward, plain-English answer.

Request a free block review Speak to our team

Related services & guides

Section 20 topic hub What does an RTM company actually do?Right to Manage support RTM handover and management support How to run a major works project Full block management service

When to seek professional advice

Most questions on this topic are management questions rather than legal ones, and the two are worth separating. A managing agent can tell you how something works day to day and what it will cost. A solicitor tells you what your rights are and how a Tribunal is likely to view them.

Speak to a managing agent when

You need the consultation run properly - notices drafted, estimates obtained and observations logged.
You want the scope and specification tested before the works go out to tender.
You are budgeting for major works and need a reserve fund and payment plan that works for the block.

Request a free block review

Take specialist legal advice when

You need to apply to the Tribunal for dispensation.
A leaseholder is formally challenging the reasonableness of the costs.
The lease wording on recovery of the works is genuinely unclear or disputed.

East Valley Properties provides management expertise, not legal advice. Where a matter turns on the wording of your lease or on formal proceedings, we will say so and work alongside your solicitor.