What is Section 20

What is Section 20

We are obligated to consult with you regarding your service charge when we know it’s going to go over a certain amount.

Landlords must serve a Section 20 notice to leaseholders when planning on entering a contract longer than 12 months, and where the required contribution from leaseholders is over £100 for a service.

Why is This Important?

Energy prices have been rising significantly in recent years, and unfortunately, they are expected to keep going up. Since the energy used in communal areas isn’t covered by the domestic price cap set by Ofgem, we have to buy it through the commercial market, which can be more expensive.

Getting the Best Price for Communal Energy

To keep costs as low as possible, we have to make quick decisions when buying energy, as prices can change quickly. Normally, we would consult with residents on these types of decisions, which usually takes about three months. However, because energy prices fluctuate so much, we can’t follow this usual consultation process without risking higher costs.

What We’re Doing

We asked the First-tier Tribunal Property Chamber (Residential Property) for permission to skip the typical consultation requirement (as outlined in Section 20 of the Landlord and Tenant Act 1985). This would allow us to act faster in purchasing energy at the best possible price for everyone.

Updates

The tribunal is progressing and we promised to share updates, which are below: 

Directions From FTT 28 Jan 25

On the 28th January 2025, the FTT sent us some instructions to follow. We have highlighted the main points below, but we've also provided the full letter from the FTT (Directions from FTT 28-01-2025.pdf [pdf] 5MB) too.

  • The FTT have looked over the case and given us some instructions. If we don't follow the instructions, our request could be stopped. 
  • If we write to the Tribunal, for any reason, we must also write to anyone else involved and post a copy on our website. 
  • We must write to each leaseholder by Friday 14th February 2025, either by email, hand delivery or first class post with specific details of the application, offering printed copies of details and any response to the application needs to be made by Friday 28th February 2025.
  • The final decision is likely to be uploaded to this site on or after Monday 10th March 2025. 
  • Any opposition to the application needs to be made by Friday 28th February. This is to be done via email to the tribunal and either by post or email to us. This should include copies of any documents which are relevant to the opposition. 
  • By Friday 7th March 2025, we must create a document with all the details of our application and any replies and provide this to the FTT and any leaseholders who have opposed the application. 
  • The tribunal will make a decision within 7 days from Monday 10th March 2025. 
  • Any party may request to the tribunal that a hearing should be held, provided that is made by Friday 7th March 2025. 
  • We are required to place a copy of the outcome on our website and details of your appeals rights within 7 days of receipt and keep it on here for three months. 

On the 13th February 2025, we carried out point 3 and wrote to each leaseholder. This letter is available for immediate download — Letter 2 - FTT Directions - 13.02.2025[pdf] 605KB.