Block management: 30 questions on Section 20, service charge demands, accounts and arrears, answered

Question 1

When is Section 20 consultation required?

Accepted Answer

For qualifying works, when any one leaseholder's contribution would be more than £250; for a qualifying long-term agreement (over 12 months), more than £100 a year. A £48,000 roof job shared equally by 24 flats is £2,000 each, so consultation is required.

Question 2

What happens if Section 20 consultation is skipped?

Accepted Answer

Each leaseholder's contribution to the works is capped at £250 unless the tribunal grants dispensation. On a £48,000 job across 24 flats the recoverable sum falls to £6,000, leaving £42,000 with the landlord or the residents' management company.

Question 3

How long is each stage of Section 20 consultation?

Accepted Answer

Each consultation period is 30 days beginning with the date of the notice, so the notice date is day one. A notice of intention dated 6 October 2026 closes for observations on 4 November, not 5 November; a statement of estimates issued on 5 November closes on 4 December. Allow time for posting on top.

Question 4

What is the 18-month rule for service charges?

Accepted Answer

A cost incurred more than 18 months before it is demanded cannot be recovered, unless within those 18 months the leaseholder was told in writing that the cost had been incurred and that they would be asked to pay. Of the four statutory tests of a demand, this is the only one that loses the money for good; the others make the sum not due until the demand is served correctly.

Question 5

What makes a service charge demand valid?

Accepted Answer

It must carry the landlord's name and address, an address in England or Wales for service of notices, the prescribed summary of rights and obligations, and it must be within the 18-month rule. Without the first three the sum is not due, or can be withheld, until the demand is re-served correctly.

Question 6

Do service charge accounts have to be audited?

Accepted Answer

The statute does not say audit. Section 21 of the 1985 Act requires, on a leaseholder's request, a summary of costs certified by a qualified accountant as a fair summary sufficiently supported by accounts, receipts and other documents, and only where the charges are payable by the tenants of more than four dwellings. The lease may require more, and the lease is read first.

Question 7

When are service charge accounts due?

Accepted Answer

The lease sets the date; the statute sets the back-stops. For a year ending 31 March, the first costs of the year must be demanded or notified by 30 September the following year under the 18-month rule, and a requested section 21 summary is due within six months of the year end. Accounts out by 30 September satisfy both.

Question 8

Can a lease be forfeited for service charge arrears?

Accepted Answer

Not for £350 or less unless some of it has been outstanding for more than three years, and not at all until the service charge has been admitted by the leaseholder or determined by a tribunal or court. An arrears letter that threatens forfeiture before either limit is met is the first thing a leaseholder's solicitor will raise.

Question 9

What is a higher-risk building?

Accepted Answer

In occupation, a building at least 18 metres high or with at least 7 storeys that contains at least two residential units. It must be registered with the Building Safety Regulator and have a safety case report and a resident engagement strategy. A lower building of at least 11 metres or 5 storeys is a relevant building for the leaseholder cost protections but owes the Regulator none of those.

Question 10

How much of the Leasehold and Freehold Reform Act 2024 is in force?

Accepted Answer

As at 1 October 2026 we count three commencement orders: building-safety amendments on 31 October 2024, the end of the two-year ownership rule for enfranchisement and lease extension on 31 January 2025, and the right to manage changes on 3 March 2025. The service charge provisions in Part 4 were not yet in force on that date.

Question 11

What does block management software cost?

Accepted Answer

On per-unit rates published on 1 October 2026, for 1,200 units: Blocks Online's block management module comes to £3,360 a year and Arthur's Standard plan to £21,600 a year. Dwellant shows starting prices of £2.99 to £4.99 a unit without saying for what period. Propman and MRI Qube PM publish no price. The published figures cover different amounts of the job, so compare the module lists as well.

Question 12

Can AI help run a block management office?

Accepted Answer

With the dated, rule-bound administration: Section 20 timetables, demand checks before posting, the service charge year calendar, arrears letters at the right stage and contractor chasing. It should not decide what is recoverable or sign off accounts; a property manager or accountant does. Overlyft can set up an AI assistant that is built for that work.

Question 13

Which blocks of flats in England need Residential PEEPs, and since when?

Accepted Answer

Since 6 April 2026, the Fire Safety (Residential Evacuation Plans) (England) Regulations 2025 apply to blocks with two or more homes that are at least 18 metres or seven storeys, and to blocks over 11 metres with a simultaneous evacuation strategy. The responsible person must identify residents who need help to evacuate, offer each an assessment and prepare a building evacuation plan.

Question 14

How often do fire doors have to be checked in a block of flats?

Accepted Answer

In England, in blocks above 11 metres, communal fire doors must be checked at least every 3 months and flat entrance doors at least every 12 months on a best endeavours basis, under regulation 10 of the Fire Safety (England) Regulations 2022. A 40-flat block with 12 communal doors needs 88 checks a year. Keep a record of every attempt to gain access.

Question 15

Do block managers in England need a Level 4 qualification?

Accepted Answer

Not on 1 October 2026: no law requires one. On 29 September 2026 the government said property agents will need a licence and appropriate qualifications, without a level or date. Its July 2025 consultation proposed Level 4 with a 36-month transition. The Property Institute's Level 2, 3 and 4 leasehold courses cost £249, £449 and £549, which is £1,247 in all.

Question 16

How much does it cost to apply for dispensation from Section 20 consultation?

Accepted Answer

The application goes to the First-tier Tribunal on form Leasehold 5 and costs £200 to issue plus £300 if a hearing is listed, on fees in force from 13 July 2026. On a £48,000 roof job across 24 equal shares, that £500 stands against the £42,000 the £250 cap would otherwise leave with the client.

Question 17

How long does a landlord have to let a leaseholder inspect service charge invoices?

Accepted Answer

Under section 22 of the Landlord and Tenant Act 1985, a leaseholder has six months from obtaining the cost summary to ask in writing. The landlord must make the documents available within one month of the request and keep them available for two months. Inspection is free. Failing without reasonable excuse is an offence with a fine of up to £2,500.

Question 18

What must an outgoing managing agent hand over when a block changes agent, and by when?

Accepted Answer

No statute lists it. The RICS Service Charge Residential Management Code, 4th edition, asks for an interim payment ready for day one where funding allows, and a full and final reconciliation with any remaining monies within three months of termination. Right to manage is different: information is due within 28 days of a notice.

Question 19

Can a managing agent use ChatGPT to write leaseholder letters and Section 20 notices?

Accepted Answer

Yes for drafting leaseholder replies and covering letters, on a business plan whose terms keep the firm's content out of model training: ChatGPT Business was listed at £15 a seat a month on 1 October 2026. Not for the Section 20 notice itself. Its contents and 30-day dates come from the 2003 Regulations, and a failed consultation caps recovery at £250 a flat.

Question 20

When do directors of a residents' management company have to verify their identity with Companies House?

Accepted Answer

Directors in post before 18 November 2025 must be verified by the time their company files its next confirmation statement in the 12-month transitional period, which ends on 17 November 2026. The company cannot file unless every director is verified. Verification is free through GOV.UK One Login, and acting as a director unverified after the company's deadline is an offence.

Question 21

Who is liable for service charge arrears when a leasehold flat is sold?

Accepted Answer

Sums that fell due before completion stay the seller's debt; sums that fall due afterwards are the buyer's. Under a lease granted on or after 1 January 1996, the Landlord and Tenant (Covenants) Act 1995 releases the seller from the tenant covenants from the assignment, and the buyer has no liability for any time before it.

Question 22

How long does a landlord have to serve a section 17 notice on a former leaseholder for unpaid service charges?

Accepted Answer

Six months beginning with the date the charge became due. A charge due on 1 April 2027 needs a notice served by 30 September 2027. The notice must be on Form 1 of the 1995 Notices Regulations or substantially to the same effect, and the claim is capped at the sum it states unless it warned that the figure might be found to be higher.

Question 23

Can a leaseholder demand to see six years of service charge invoices under section 22?

Accepted Answer

No. Section 22 of the Landlord and Tenant Act 1985 covers the documents supporting one cost summary, which means one accounting year, and the request must be made within six months of obtaining that summary. Earlier years can still be reached through tribunal directions in a section 27A application, or offered voluntarily if the landlord agrees.

Question 24

What does a fire door check in a block of flats have to cover?

Accepted Answer

The government fact sheet on regulation 10 says the minimum is an inspection for obvious damage or issues, and that a specialist should not be needed. Look at five things: altered or damaged glazing or grilles; gaps, seals and hinges; whether the closer shuts the door; whether it closes into the whole frame; and visible damage to the door or closer.

Question 25

How much does it cost to take a leaseholder to the county court for unpaid service charges in 2026?

Accepted Answer

The fee to issue depends on the amount claimed with interest: £80 for £1,000.01 to £1,500, £115 up to £3,000, £205 up to £5,000 and £455 up to £10,000, on the fees GOV.UK showed on 1 October 2026. A defended small claim adds a hearing fee of £27 to £346. A £2,400 claim taken to a hearing costs £296 in court fees.

Question 26

How long does a right to manage claim take from the claim notice to the takeover?

Accepted Answer

At least four months. The Commonhold and Leasehold Reform Act 2002 requires the claim notice to allow not less than one month for counter-notices and to set an acquisition date at least three months after that. A claim notice given on 19 October 2026 cannot take effect before 19 February 2027. A disputed claim waits for the tribunal, then three months more.

Question 27

Can a landlord put its legal costs on the service charge?

Accepted Answer

Only where the lease allows it, and a leaseholder can apply under section 20C of the Landlord and Tenant Act 1985 for an order keeping the costs out. In Kensquare v Boakye in 2021 the Court of Appeal held that a clause covering professional advisers for the management of the building did not reach litigation costs. The 2024 Act's replacement rule is not in force on 1 October 2026.

Question 28

Who pays the landlord's costs when leaseholders claim the right to manage?

Accepted Answer

The landlord, in an ordinary claim. Since 3 March 2025 the RTM company and its members are not liable for costs anyone else incurs because of a claim notice, and a lease term saying otherwise has no effect. The tribunal can order the company to pay only where the claim notice is withdrawn or ceases to have effect and the company acted unreasonably.

Question 29

Does the £250 Section 20 threshold include VAT?

Accepted Answer

Yes. The test is run on the cost including VAT, because that is what the leaseholder pays, and on the largest single share under the leases, not the average. A job that sits under the line before VAT can be over it once VAT is added. Where the largest share is 4.5%, works costing more than £5,555.56 need Section 20 consultation first.

Question 30

What should a managing agent do if the service charge accounts are going to be late?

Accepted Answer

Send every leaseholder a section 20B(2) letter before any cost in the year is 18 months old. The letter says costs have been incurred and a contribution will be required, and it does not need a figure. Without it, a cost incurred more than 18 months before the demand is lost. The RICS code expects accounts within six months of the year end.