Right to Buy Leaseholders and Section 20

Why Right to Buy leaseholders have a protection others don’t

When a council tenant exercises their Right to Buy, they receive a Section 125 offer notice setting out the purchase terms - including estimates of specified service charge liabilities, generally covering estimated contributions towards relevant repair works and, where applicable, improvement works, over the initial period after the sale completes (generally the first five years of the lease). Because that estimate is something the buyer relied on when deciding to purchase, Parliament built in a specific protection: statutory rules restrict the amounts that can be recovered for works covered by those estimates during the initial period, subject to the applicable inflation allowance and the detailed statutory provisions.

The legal basis

This protection comes from paragraph 16B of Schedule 6 to the Housing Act 1985. It sits alongside, not instead of, the ordinary Section 20 consultation framework - a Right to Buy leaseholder within the initial period can potentially have both the ordinary consultation questions and this specific estimate-based protection relevant to the same bill.

What it does and doesn’t cover

• It can apply to estimated contributions for relevant repairs and, under related provisions, certain improvement works - it doesn’t place a general cap on every category of service charge (day-to-day management costs, for example, sit outside it)
• It applies during the initial period after the purchase completed - generally the first five years of the lease - not indefinitely
• It depends on what your own Section 125 notice actually estimated - a document specific to your purchase, not a generic figure

Working out whether a specific bill falls inside or outside this protection needs your original Section 125 estimate and the completion date of your purchase - detail this guide, and an automated tool, can’t verify independently. It only flags that the protection may be relevant and what documents would let you (or a solicitor) check it properly.

What to gather if this might apply to you

• Your original Section 125 offer notice, including its repair and improvement-cost estimates
• The completion date of your Right to Buy purchase
• The current repair demand, itemised if possible

A pattern many ex-council leaseholders recognise

This protection exists because Right to Buy leaseholders are a genuinely distinct group - buyers who relied on an estimate given to them by the very landlord now billing them. If Section 20 notices at your property feel like a recurring theme rather than a one-off, our guide on ex-council leaseholders and repeat Section 20 bills covers why that pattern is so common, and how to start keeping a proper record.