Landlord and Tenant Act 1985
A comprehensive guide to the Landlord and Tenant Act 1985 and how it protects leaseholders. Covering service charge rights, Section 20 consultation, the Section 20B 18-month rule, and your right to transparent accounting from your managing agent or freeholder.
The Landlord and Tenant Act 1985 is the most important piece of legislation governing service charges in residential leasehold properties in England and Wales. It establishes the legal framework that protects leaseholders from unreasonable charges, ensures transparency in how their money is spent, and provides clear routes for challenging charges that do not meet the required standards. Whether you own a flat in a small conversion or a large purpose-built block, this Act underpins your rights as a leaseholder.
At Block, we manage every development in strict accordance with the Landlord and Tenant Act 1985 and related legislation. Our approach to service charge management is built on full compliance, complete transparency, and a commitment to treating every leaseholder fairly. Understanding how this Act works is essential for any leaseholder who wants to hold their freeholder or managing agent to account.
What Does the Landlord and Tenant Act 1985 Cover?
The Landlord and Tenant Act 1985 contains several key provisions that directly affect how service charges are demanded, calculated, and challenged. The most significant sections for leaseholders are Sections 18 through 30, which deal specifically with service charges and the protections available to those who pay them. Here is an overview of the key areas covered by the Act:
Together, these provisions create a comprehensive framework that governs the financial relationship between leaseholders and their freeholder or managing agent. The Act applies to all residential leases where a service charge is payable, regardless of the size or type of the building.
Section 20: Consultation on Major Works
Section 20 of the Landlord and Tenant Act 1985 is one of the most significant protections available to leaseholders. It requires the freeholder or managing agent to consult with leaseholders before carrying out qualifying works where the cost to any individual leaseholder exceeds 250 pounds, or before entering into qualifying long-term agreements where the cost exceeds 100 pounds per leaseholder per year.
The Section 20 consultation process follows three stages. First, a notice of intention is served describing the proposed works and inviting leaseholders to make observations and nominate contractors. Second, estimates are obtained and shared with leaseholders, who have a further 30-day observation period. Third, if the lowest estimate or a leaseholder-nominated contractor is not selected, a notice of reasons must be served within 21 days.
If the Section 20 consultation process is not followed correctly, the amount recoverable from each leaseholder is capped at the relevant threshold, regardless of the actual cost. This is a powerful protection that ensures leaseholders cannot be presented with large bills without having been properly consulted. At Block, we manage every Section 20 consultation with meticulous attention to statutory compliance, protecting both the freeholder's right to recover costs and the leaseholder's right to be consulted.
Section 20B: The 18-Month Rule
Section 20B of the Landlord and Tenant Act 1985 provides an important time limit on service charge demands. A leaseholder is not liable to pay a service charge in respect of costs incurred more than 18 months before the demand is served, unless the leaseholder was notified in writing within the 18-month period that the costs had been incurred and that a contribution would be required.
This is a complete defence. If a freeholder or managing agent fails to demand payment or give written notice within 18 months of incurring the costs, the leaseholder has no obligation to pay. The Section 20B rule places a clear obligation on those managing the building to issue demands promptly and maintain accurate records of when costs were incurred.
At Block, our accounting systems are designed to ensure that all service charge demands are issued well within the 18-month window. We track every cost from the date it is incurred and generate timely demands so that our clients are never at risk of losing the ability to recover legitimate expenditure. For leaseholders, understanding Section 20B can provide a valuable defence against unexpected historic charges. If you have received a service charge demand for costs incurred more than 18 months ago, you should seek advice on whether the demand is enforceable.
Your Right to Information Under the Act
Sections 21 and 22 of the Landlord and Tenant Act 1985 give leaseholders important rights to access financial information about their service charges. Under Section 21, any leaseholder can request a written summary of the costs making up the service charge for the previous accounting period. The landlord must comply within one month of the request or within six months of the end of the accounting period, whichever is later.
Under Section 22, leaseholders have the right to inspect the accounts, receipts, and other documents supporting the summary of costs. This means you can examine the actual invoices and verify that the charges are accurate and reasonable. The landlord must make these documents available within one month of a written request. These transparency provisions are fundamental to the protections offered by the Landlord and Tenant Act 1985 and enable leaseholders to make informed decisions about whether to challenge service charges.
If you are concerned about the service charges levied on your property, exercising your rights under Sections 21 and 22 is an essential first step. Our service charge management approach at Block provides leaseholders with fully itemised accounts as standard, meaning the information you need is always readily available without the need for formal requests.
How the Act Protects Leaseholders
The Landlord and Tenant Act 1985 provides leaseholders with a comprehensive set of protections. When combined with the leaseholder rights established by other legislation, such as the Commonhold and Leasehold Reform Act 2002 and the Leasehold and Freehold Reform Act 2024, the overall framework gives leaseholders substantial power to hold their freeholder and managing agent accountable. The key protections under the 1985 Act include:
If you believe your service charges are unreasonable or that the correct procedures have not been followed, you have several options. You can raise the matter with your managing agent, apply to the First-tier Tribunal for a formal determination under Section 27A, or pursue a service charge dispute through the appropriate channels. Understanding these protections under the Landlord and Tenant Act 1985 is the first step towards ensuring your rights are upheld.
Frequently Asked Questions About the Landlord and Tenant Act 1985
What does the Landlord and Tenant Act 1985 cover?
The Landlord and Tenant Act 1985 covers a wide range of protections for leaseholders and tenants in England and Wales. Its most important provisions relate to service charges, including requirements that charges be reasonably incurred and that work be carried out to a reasonable standard. The Act also establishes the Section 20 consultation process for qualifying works and long-term agreements, the Section 20B 18-month time limit on service charge demands, and the right to request a summary of service charge costs and inspect supporting documents. It is the principal piece of legislation governing the relationship between landlords and leaseholders in residential leasehold properties.
What is Section 20 of the Landlord and Tenant Act 1985?
Section 20 of the Landlord and Tenant Act 1985 requires landlords and managing agents to consult with leaseholders before carrying out qualifying works where the cost to any individual leaseholder exceeds 250 pounds, or before entering into qualifying long-term agreements where the cost exceeds 100 pounds per leaseholder per year. The consultation involves a three-stage process: a notice of intention, a notification of estimates allowing leaseholders to nominate contractors, and a notification of the final award. If the consultation process is not followed, the amount recoverable from each leaseholder is capped at the relevant threshold.
What is the 18-month rule under Section 20B?
Section 20B of the Landlord and Tenant Act 1985 provides that a leaseholder is not liable to pay a service charge for costs incurred more than 18 months before the demand is served, unless the leaseholder was notified in writing within the 18-month period that the costs had been incurred and that they would be required to contribute. This is a complete defence and prevents landlords and managing agents from issuing unexpected historic service charge demands. If the demand is served outside the 18-month window without prior written notification, the leaseholder has no obligation to pay.
Can leaseholders challenge service charges under the 1985 Act?
Yes. Under Section 19 of the Landlord and Tenant Act 1985, service charges are only payable to the extent that they are reasonably incurred and that the work or services are of a reasonable standard. If a leaseholder believes charges are unreasonable, they can apply to the First-tier Tribunal (Property Chamber) under Section 27A for a determination. The tribunal can assess whether costs were reasonable, whether the standard of work justifies the charges, and whether the correct procedures were followed. Leaseholders do not need a solicitor to make an application.
What information can leaseholders request under the Act?
Under Section 21 of the Landlord and Tenant Act 1985, leaseholders can request a written summary of the costs making up the service charge for the previous accounting period. The landlord must comply within one month of the request or within six months of the end of the accounting period, whichever is later. Under Section 22, leaseholders also have the right to inspect the accounts, receipts, and other documents supporting the summary. These rights ensure transparency and allow leaseholders to verify that charges are accurate and reasonable.
How does the Landlord and Tenant Act 1985 protect leaseholders?
The Landlord and Tenant Act 1985 protects leaseholders through several key mechanisms. Service charges must be reasonable in amount and standard under Section 19. Leaseholders must be consulted before major expenditure under Section 20. Demands must be issued within 18 months of costs being incurred under Section 20B. Leaseholders have the right to request cost summaries under Section 21 and inspect supporting documents under Section 22. The Act also provides access to the First-tier Tribunal under Section 27A for independent determination of disputes. Together, these provisions give leaseholders substantial protection against unreasonable or opaque charges.
Need Help Understanding Your Rights Under the 1985 Act?
Our experienced team manages every building in full compliance with the Landlord and Tenant Act 1985. Whether you need guidance on Section 20 consultation, service charge transparency, or your leaseholder rights, speak with us today.