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A short note on leasehold costs

By J

The UT(LC) has published an addendum to Daejan Properties Ltd v Griffin [2014] UKUT 206 (LC) (our note here). The substantive case was about historic neglect. In outline, the leaseholders had won in the FTT and the UT overturned the decision, The UT invited written submissions on s.20C, Landlord and Tenant Act 1985 and, in doing so, clearly wanted to give a bit of practical guidance to the FTT/LVT.

You’ll remember that, if a lease lets a landlord recover his legal costs as a service charge, then s.20C, Landlord and Tenant Act 1985 gives the court or Tribunal a discretionary power to disallow some or all of these costs if it is just and equitable to do so. The UT is very, very reluctant to lay down specific guidelines on how to approach the s.20C discretion, noting that the disputes to which it applies “come in a great variety of forms… [and]… it is impossible to lay down general rules… other than at the highest level of generality and even then only as factors to be taken into account.” ([115])

What was clear, however, was that s.20C need only be considered if there is actually a contractual right to the costs as a service charge; it follows that the Tribunal should first decide that question ([116]-[117]). Now, that is quite important, since practice varies considerably between Tribunals and, hopefully, that should now stop. The practical point (for both landlord and tenant lawyers) is to make sure you’ve identified your contractual right to costs (or why there is no such right) before the FTT/LVT hearing.

J is a barrister. He considers housing law to be the single greatest kind of law known to humankind and finds it very odd that so few people share this view.


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