We are planning major works and our surveyor's fees are significant. Do surveyor and project management fees count for Section 20 purposes, or is consultation only needed on the building contract?
There is no unconditional yes or no. Section 20 applies to qualifying works and to qualifying long term agreements once the relevant thresholds are met, and professional fees can fall into either category or neither. Fees for specifying, tendering and administering major works are usually treated as part of the cost of those works, which affects both the threshold calculation and the consultation notices. A professional appointment lasting more than twelve months may be a qualifying long term agreement in its own right. A standalone one-off survey often is neither. The lease also governs whether the fee is recoverable at all.
Section 20 of the Landlord and Tenant Act 1985 requires consultation in two situations: qualifying works where any one leaseholder's contribution would exceed the relevant threshold, and qualifying long term agreements of more than twelve months where a leaseholder's annual contribution would exceed the relevant threshold. Professional fees can fall inside either, both, or neither, depending on what the fee is actually for.
The question to ask is not "are surveyor's fees caught?" but "what is this fee part of, and how long does the appointment last?".
A one-off survey or report. A standalone condition survey or a single report, commissioned on its own and not part of a works programme, is often simply a service charge cost. It is not automatically a qualifying long term agreement because it does not last more than twelve months, and if there are no associated works it is not part of the cost of qualifying works.
Fees directly associated with qualifying works. Where a surveyor specifies, tenders, contract-administers and certifies a major works programme, those fees are usually treated as part of the cost of the works for the purpose of calculating each leaseholder's contribution. That matters twice over: it can push the project over the threshold, and it affects the figures shown in the consultation notices.
A professional appointment lasting more than twelve months. A retained consultant, a multi-year framework, or a rolling appointment can be a qualifying long term agreement in its own right, and consultation may be needed on the appointment even where each year's cost looks modest.
Ordinary managing agent fees. The routine management fee is generally treated differently from project fees, though the terms and duration of the management agreement itself can raise a separate qualifying long term agreement question. A specific additional fee for administering a section 20 consultation, or for supervising the works, is more likely to be associated with the works.
Whether a professional fee is recoverable at all depends on the lease. Some leases expressly permit professional and surveyor's fees; others are narrower. A fee that is properly consulted on can still be irrecoverable if the lease does not allow it, and a fee the lease allows can still be limited if consultation was required and not carried out.
Tribunal decisions in this area turn on the facts, and the consequence of getting it wrong is significant: without valid consultation or dispensation, the amount recoverable from each leaseholder can be capped at the statutory limit, leaving the shortfall with the landlord or the company. Where there is genuine doubt, the practical answer is usually to consult, or to apply for dispensation, rather than to rely on an argument that consultation was unnecessary.
Our detailed guide on Section 20 and professional fees works through the analysis, and section 20 consultation support covers running the process itself.
Getting the consultation route right matters most when professional fees form part of a larger project. We handle that process for clients as part of our RTM company management service.
The safe working assumption on a significant project is that professional fees associated with the works form part of the consultation picture.
Consulting on the building contract but not the fees
If the fees form part of the cost of the works, leaving them out understates the estimates and can undermine the consultation.
Assuming a retained consultant is outside Section 20
An appointment running beyond twelve months can be a qualifying long term agreement even where annual costs look small.
Splitting works to stay under the threshold
Artificially dividing a single programme is a well-recognised problem and is unlikely to succeed if challenged.
Relying on the statute and ignoring the lease
Consultation does not make a cost recoverable if the lease does not permit that category of expenditure.
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.
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.
The official material behind this guide. We summarise it in plain English rather than reproducing it.
The consultation requirement for qualifying works and qualifying long term agreements.
Definitions and the Tribunal''s power to dispense with consultation.
The prescribed consultation procedures and thresholds.
We run consultations properly, from the notice of intention through to the statement of estimates, so recoverable costs are not put at risk.
Answered by Romain Maillard - Director, East Valley Properties
Romain manages residential blocks and estates for RTM companies, residents' management companies, share of freehold developments and freeholders across East London and Essex.
Published · Updated
This answer has been anonymised. Personal details, addresses and company names have been removed. Guidance is general and does not replace advice from a solicitor or surveyor on your specific block. East Valley Properties is a managing agent, not a firm of solicitors or legal advisers.
Whether you're an RTM Director, RMC Director, Freeholder or Leaseholder, our experienced block management team is here to help.
If your question could help other property owners, we may publish an anonymised version of the answer in our Knowledge Centre.
Book a free consultation with East Valley Properties to discuss your building, service charges, compliance or managing agent requirements.