One of the most common questions leaseholders ask is: when does Section 20 actually apply? The answer comes down to a straightforward financial threshold known as the £250 rule. Understanding this rule is essential for any leaseholder, because it determines when your landlord is legally required to consult you — and what happens if they do not.
What Is the £250 Threshold?
Under the Landlord and Tenant Act 1985, a landlord must carry out a formal Section 20 consultation before undertaking any major works where the contribution from any single leaseholder exceeds £250.
This is a per leaseholder threshold — not the total cost of the works. So even if a building has 20 flats and the total works cost £20,000, Section 20 applies if any one leaseholder is being asked to pay more than £250. In practice, this means the Section 20 threshold is triggered by almost any significant building repair or improvement project.
Common Examples Where the £250 Rule Applies
The following types of works frequently trigger the Section 20 threshold:
- Roof repairs or replacement
- External decoration and rendering
- Lift replacement or major servicing
- Window or door replacement (communal areas)
- Major structural repairs
- Boiler or communal heating system replacement
- Car park resurfacing
Even works that seem routine can breach the £250 threshold once the costs are divided among a small number of leaseholders. A building with just four flats facing a £2,000 repair job would trigger Section 20 for each leaseholder.
Can a Landlord Split Works to Avoid the £250 Rule?
This is an important question — and the answer is: not legitimately. Deliberately splitting a single project into smaller contracts to bring each one under the £250 per-leaseholder threshold is known as contract splitting, and it is a procedural abuse that leaseholders can challenge.
The law looks at the substance of the works, not just the invoices. If works are clearly part of a single project, the full cost should be aggregated for the purposes of assessing whether Section 20 applies. If you suspect contract splitting, this can be raised with the First-tier Tribunal.
What Happens If the Landlord Ignores the £250 Rule?
If a landlord carries out major works without following the Section 20 consultation process, the consequences are significant. They are generally limited to recovering no more than £250 per leaseholder for those works — even if the actual works cost far more.
The landlord can apply to the First-tier Tribunal for dispensation from the consultation requirements. The Tribunal may grant this if it is satisfied that leaseholders suffered no prejudice from the failure to consult. However, dispensation is not automatic, and leaseholders can argue against it.
Does the £250 Rule Apply to Long-Term Agreements?
Section 20 has a separate threshold for qualifying long-term agreements — contracts lasting more than 12 months (such as maintenance contracts or insurance agreements). For these, the threshold is £100 per leaseholder per year, rather than the £250 single-works threshold.
This is a frequently overlooked area. If your landlord enters into long-term service agreements without the proper consultation, the same recovery restrictions apply.
Need help navigating a Section 20 notice? Contact us at section20.org.uk