By Jess Brittle, Senior Procurement Manager
When planning a programme of works, it’s easy to focus on budgets and finding the right contractor. But if your project involves leaseholders, there’s another consideration that can have a significant impact on your procurement: Section 20 of the Landlord and Tenant Act 1985.
Leave it too late and you could face delays or limit the costs you can recover from leaseholders. Plan for it early and it simply becomes part of the procurement process.
What is Section 20?
Section 20 sets out the consultation process landlords must follow before carrying out qualifying works or entering into long term agreements where leaseholders contribute towards the cost.
The consultation gives leaseholders the opportunity to comment on the proposed works and, in some cases, nominate contractors to be invited to tender. This helps improve communication and gives residents a voice in the process, while opening up opportunities for contractors who may not have otherwise been considered. If the correct process isn’t followed, the amount a landlord can recover from leaseholders may be capped, making compliance with Section 20 an important consideration when planning procurement.
Things to consider before you go to market
Build Section 20 into your programme
The consultation process includes statutory notice periods, so these should be factored into your procurement programme from the inception. This gives a realistic view of when a contract can be awarded and helps avoid delays later in the process.
Think about your route to market
Leaseholders can nominate contractors they would like to see invited to tender. If you’re using a framework, this can be difficult to accommodate because suppliers can’t usually be added once the framework is established.
A Dynamic Purchasing System (DPS) or Dynamic Market (DM) may offer greater flexibility, allowing suitable suppliers to join before the tender process begins while still providing access to a compliant route to market.
Make the consultation period count
The consultation doesn’t have to bring your procurement to a standstill. While notices are with leaseholders, there is still valuable work that can be done, from refining specifications and preparing tender documents, to planning evaluations and mobilisation. Making use of this time helps keep the overall programme moving.
Maintain a clear audit trail
Keep records of the consultation process alongside your procurement documentation. Having a clear audit trail will help demonstrate compliance and ensure the information needed for statutory notices is readily available.
Planning ahead makes all the difference
Section 20 shouldn’t be viewed as a barrier to procurement. With the right planning, it becomes another step in delivering a compliant procurement rather than a cause of delay. CHIC’s recent case study at Jardine Crescent, Coventry shows a shining example of how careful planning and resident engagement can provide improvements to residents homes with minimum disruption, while also avoiding delays.
At CHIC, we work with members to identify the most appropriate route to market for each project and develop procurement programmes that reflect the practical requirements of Section 20. By considering these requirements early, organisations can stay compliant while keeping projects on track.
If you need support navigating Section 20 requirements alongside your procurement process, CHIC’s in house member services team can help you identify the right route to market, develop realistic procurement programmes and ensure your project stays compliant from start to finish. Get in touch at [email protected].
