Leasehold guidance
Does Section 20 Apply to Professional Fees?
Recent Tribunal decisions have clarified an important question for landlords, RTM Companies and Residents' Management Companies. Here's what it means for your building.
Speak to Our TeamShort answer
Section 20 consultation is triggered by the qualifying works themselves, not by the professional fees attached to them. Recent Tribunal decisions have generally treated a surveyor's or architect's fee for specifying and administering major works as a professional cost rather than “works to a building”.
Those fees still have to be reasonable and recoverable under the terms of the lease. But in most cases it is the underlying works, not the professional fee, that determines whether consultation is required.
What is Section 20?
Section 20 of the Landlord and Tenant Act 1985 requires landlords to consult leaseholders before carrying out qualifying works or entering into long-term contracts that affect service charges.
When it applies
Works costing any single leaseholder over £250, or long-term agreements over £100 per leaseholder per year.
How it works
A Notice of Intention, followed by a Notice of Estimates, with a 30 day response window at each stage.
Why it matters
Fail to consult and recovery is capped at the statutory thresholds - regardless of the actual cost.
More background: Section 20 Notice Explained. For smaller resident-managed blocks, we use tiered Section 20 administration fees based on the value of the works - see our block management pricing.
What Are Professional Fees?
Professional fees are charges paid to specialists who advise on, design or oversee works to your building - separately from the contractor who carries out the physical works.
Surveyor
Building and structural surveys, specifications and cost planning.
Engineer
Structural, mechanical or electrical engineering advice.
Architect
Design work, planning applications and building regulations.
Project Manager
Coordinating trades, programme and reporting to directors.
Fire Consultant
Fire risk assessments, remediation strategies and compliance.
Contract Administrator
Certifying payments, variations and completion under a building contract.
The Tribunal's Decision
Key finding in plain English
The First-tier Tribunal has confirmed the direction of travel that professional fees are treated differently to physical works when it comes to Section 20 consultation.
- Professional fees are generally not "works on a building" for Section 20 purposes - so appointing a surveyor or engineer does not, by itself, trigger consultation.
- They must still be reasonable and recoverable under the lease. The service charge clause has to permit the fee, and the amount has to be justifiable if challenged.
- The underlying works themselves still need Section 20 consultation once the £250 per leaseholder threshold is crossed.
What This Means in Practice
For Directors
- You can appoint a surveyor or engineer early to scope the works properly.
- Get professionals on board before quoting contractors - it protects the block.
- Keep engagement letters, comparable quotes and evidence of value delivered.
- Consult on the works themselves through a proper Section 20 process.
- Document decisions so you can defend them if leaseholders raise concerns.
For Leaseholders
- Independent professionals normally lead to fairer, better-defined works.
- You may not receive a Section 20 notice for the professional fees themselves.
- You can still challenge whether a fee is reasonable and permitted by the lease.
- Ask for the specification, tender comparison and appointment terms.
- Raise concerns early - well before contracts are signed with contractors.
Planning Major Works
A well-run major works project follows a clear sequence. Professional input up front leads to better tenders and fewer surprises later.
- 1Inspect Building
- 2Prepare Specification
- 3Appoint Professionals
- 4Section 20 Consultation
- 5Tender Contractors
- 6Carry Out Works
- 7Completion
How East Valley Properties Helps
Major Works Planning
Scoping, budgeting and phasing works programmes with reserve fund advice.
Section 20 Guidance
Notices of Intention, Estimates and Award managed to the statutory timetable.
Tender Management
Independent tender packs, contractor selection and transparent comparisons.
Contract Administration
Payment certificates, variations, retention and final accounts.
Leaseholder Communication
Clear updates so leaseholders understand scope, cost and timescale.
Compliance Support
Fire safety, building safety and lease-recovery checks throughout.
What does this mean in practice?
The question directors actually need answered is not whether a fee is technically qualifying expenditure, but how to consult in a way that no one can pick apart later.
If you are one of the rtm directors
- Consult on the works, and set out the professional fees clearly inside that consultation rather than treating them as a separate exercise.
- Get the surveyor appointed before the notice of intention goes out, so the specification and the estimates describe the same job.
- Show the fee basis in the estimates stage - percentage or fixed - so leaseholders can see what they are being asked to fund.
If you are one of the rmc directors
- Where a fee is close to the threshold on its own, consulting anyway is cheaper than arguing about it afterwards.
- Keep the appointment letters. If recovery is ever questioned, the scope document is the first thing anyone asks for.
If you are one of the freeholders
- Check the lease actually allows professional fees to be recovered before you commit to a consultant.
- Do not let a fee arrangement change mid-project without recording why.
If you are one of the leaseholders
- Ask for the fee to be shown as a separate line rather than buried in the works figure.
- Reasonableness applies to fees as well as to works. You can ask what the consultant is doing for the money.
Common mistakes
Assuming Section 20 always applies to professional fees
Consultation is triggered by the qualifying works. Whether a fee is caught depends on what it is for and how it is charged, not on its size alone.
Appointing the surveyor after the notice of intention
The specification then lags the consultation, and the estimates end up describing a different scope from the one leaseholders were consulted on.
Hiding the fee inside the works figure
It reads as concealment even when it is not. A separate, clearly stated fee attracts far fewer challenges.
Relying on a verbal fee agreement
Without a written scope and fee basis, a reasonableness challenge is difficult to answer years later.
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 are planning works and need to know when to start consulting and who to appoint first.
- You need a consultation timetable that fits the works programme rather than the other way round.
- You want the fee structure set out in a way that stands up to leaseholder scrutiny.
Take specialist legal advice when
- Consultation has already gone wrong and you are considering an application for dispensation.
- A leaseholder has formally challenged recovery of a fee.
- Your lease may not permit professional fees to be recovered at all.
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.
Primary sources
The official material behind this guide. We summarise it in plain English rather than reproducing it.
- Landlord and Tenant Act 1985, section 20 and section 20ZA (legislation.gov.uk)
The consultation requirement itself, and the Tribunal's power to dispense with it.
- Service Charges (Consultation Requirements) (England) Regulations 2003 (legislation.gov.uk)
The notice stages, timescales and content requirements for each type of consultation.
- Upper Tribunal (Lands Chamber) decisions (GOV.UK)
Read the decisions on qualifying expenditure directly rather than through commentary.
Frequently Asked Questions
Written 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.
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