AllowedFirst-tier Tribunal (Property Chamber)·18 June 2025

First-tier Tribunal Decides Costs Under Right to Manage

Case No.

📌 In brief

The First-tier Tribunal ruled on the costs payable by a Right to Manage company to landlords or tenants after receiving a claim notice. The Tribunal found the costs reasonable despite arguments from the respondents.

⚖️ Legal holding

A RTM company is liable for reasonable costs incurred by a landlord or tenant in consequence of a claim notice given by the company.

Topics

costs determinationleasehold reformright to manage

Provisions

Commonhold and Leasehold Reform Act 2002 s.88(4)

📖 Technical summary

The Tribunal ruled on the costs payable under the Commonhold and Leasehold Reform Act 2002.

📜 Headnote Official document

The Tribunal determined the costs payable under section 88(4) of the Commonhold and Leasehold Reform Act 2002, dismissing the respondents' arguments that the costs were unreasonable due to alleged duplications in work.

📚 Full judgment Official document

OUTCOME: Allowed

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case Reference : MAN/30UF/LCP/2024/0001 - 0009

Property : [ADDRESS], [POSTCODE]

Applicant: [redacted] : [APPELLANT]

Respondents : [redacted]

Representatives : [NAME] & [NAME] of Application : Section 88(4) Commonhold and Leasehold Reform Act 2002, determination of costs payable

Tribunal Member

P. Barber (Tribunal Judge) [NAME] (Tribunal Member)

______________________________________________ DECISION AND REASONS ____________________________________ DECISION

The Tribunal determines the costs payable under section 88(4) of the 2002 Act in relation to each set of proceedings as follows:

MAN/30UF/LCP/2024/0001 £1452.85 MAN/30UF/LCP/2024/0002 £1452.85 MAN/30UF/LCP/2024/0003 £1452.85 MAN/30UF/LCP/2024/0004 £1542.85 MAN/30UF/LCP/2024/0005 £1542.85 MAN/30UF/LCP/2024/0006 £1452.85 MAN/30UF/LCP/2024/0007 £1782.85 MAN/30UF/LCP/2024/0008 £1782.85 MAN/30UF/LCP/2024/0009 £1782.85

REASONS

1. This is the decision on the claim to costs by the Applicant following the RTM claims notices dated 04 August 2021 and 24 April 2023 and relates to 9 claims notices on each occasion.

2. Section 88 of the Commonhold and Leasehold Reform Act 2002 provides as follows:

(1) A RTM company is liable for reasonable costs incurred by a person who is—

(a) landlord under a lease of the whole or any part of any premises,

(b) party to such a lease otherwise than as landlord or tenant, or

(c) a manager appointed under Part 2 of the 1987 Act to act in relation to the premises, or any premises containing or contained in the premises,

in consequence of a claim notice given by the company in relation to the premises.

(2) Any costs incurred by such a person in respect of professional services rendered to him by another are to be regarded as reasonable only if and to the extent that costs in respect of such services might reasonably be expected to have been incurred by him if the circumstances had been such that he was personally liable for all such costs.

(3) A RTM company is liable for any costs which such a person incurs as party to any proceedings under this Chapter before the appropriate tribunal only if the tribunal dismisses an application by the company

for a determination that it is entitled to acquire the right to manage the premises.

(4) Any question arising in relation to the amount of any costs payable by a RTM company shall, in default of agreement, be determined by the appropriate tribunal.

3. It is not in dispute that the circumstances for recovery of costs under the above statutory provisions arises in relation to each application. The Respondents contend, however, that the costs are not reasonable for the reasons set out in the response to the application dated 28 March 2024 and signed by Mr [NAME] in that much of the work claimed for is duplicated as there were 9 separate RTM companies all, ostensibly, arising out of the same set of circumstances and that accordingly “the suggested costs figure is far in excess of the cost of the time that the Solicitors would have taken to deal with the applications.” The Tribunal is also asked to take into consideration that it is not the “fault of the lessees that nine Companies have had to be formed to deal with the Right to Manage but it was necessary because a separate Company was required for each building.”

4. The Applicant’s Statement of Case dated 18 March 2024 sets out a detailed and comprehensive application for costs. No challenge has been brought as to the level of fee earner involved in the proceedings and we think that is rightly so. RTM proceedings are complex and (as is evident from the history of these applications) prone to mistakes and pitfalls and it is entirely appropriate and reasonable for work to be carried out by a Grade A fee earner, assisted as necessary, by a Grade D fee earner.

5. The hourly rate of £275 per hour for the Grade A fee earner and £150 per hour for the Grade D fee earner is consistent with industry rates and we note the terms of business set out in Exhibit 4 to the Applicant’s statement of case provides a clear account of the likely costs of the work and the rate and which those costs will be charged.

6. As to the costs themselves, we do not agree with the Respondents submission that the work is duplicated. The Applicant has countered this claim in paragraph 3 of its statement in reply confirming that no work has been duplicated and that if anything “overall costs have been reduced across the matters as costs of works undertaken jointly across matters have been split. The number of attendances across the matters were specifically lowered where costs savings applied in circumstances such as joint communications and reporting to the clients on matters.”

7. The Applicant further submits in its paragraph 4 that the “core work” – i.e. reviewing the claim notices, cross referencing the various leasehold titles with the claim notices and reviewing the supporting documentation in relation to each claim notice had to be completed in relation to each separate application and could not amount to duplication.

8. We agree with these submissions and in our judgement the claim to costs in relation to the two claims notices is generally lower than might have been expected of a single claim by reason of the fact that “duplicated” work has been spread across the 9 applications. An example of the level of costs which might otherwise have been payable for a single application is provided in the decision of the Tribunal under reference LON/00AH/LCP/2022/0012 and provided by the Applicant.

9. A broad account of the work carried out is set out in paragraph 16 of the Applicants statement of case and includes the “usual” activities one might expect a competent and attentive solicitor to carry out such as reviewing the documents with close scrutiny of the Claim Notices; time spent on the preparation of the Counter Notices; attendances upon the parties/client etc. A detailed account of all of the work is set out in relation to each RTM company as exhibit 2 to the statement of case and is fully supported by reference to the various invoices billed and in our judgement the bills are generally unassailable.

10. We understand the point the Respondents make in relation to it not being their fault that 9 RTM companies were necessary, but this is really of little relevance to the issue of costs. In our judgement it is also not the fault of the Applicant that this was the case and does not take the matter one way or the other in relation to reasonableness.

11. No challenge has been made to the [COMPANY] fee of £100 plus VAT per claim notice and the work which the managing agent carried out, as set out in paragraphs 19 through to 21 of the Applicant’s statement of case seems to us, reasonable in the circumstances, such as checks in connection with regular services, placing insurers on notice, checking for ongoing insurance claims, and scheduled work and such-like.

12. It follows therefore that we are satisfied that the work carried out by the Solicitors instructed to act are reasonable costs which have not been duplicated and which were reasonably expected to have been incurred by the Applicant if he were personally liable for all such costs. As a result, the costs of the solicitors engaged in both sets of proceedings are payable by the RTM company in full as are the fees incurred by [COMPANY] in the sum of £100 plus VAT per claim notice.

13. Any party can appeal this decision to the Upper Tribunal. Guidance notes are attached on the process for doing so.

26 November 2024 Phillip Barber, Judge of the First-tier Tribunal

Annex – List of Respondents Flats 7 - 12, [NAME] (St Annes) [COMPANY]/30UF/LCP/2024/0001 Flats 12A - 18, [ADDRESS] (St Annes) [COMPANY]/30UF/LCP/2024/0002 Flats 19 - 24, [NAME] (St Annes) [COMPANY]/30UF/LCP/2024/0003 Flats 25 - 30, [ADDRESS] (St Annes) [COMPANY]/30UF/LCP/2024/0004 Flats 31 - 36, [ADDRESS] (St Annes) [COMPANY]/30UF/LCP/2024/0005 Flats 43 - 48, [ADDRESS] (St Annes) [COMPANY]/30UF/LCP/2024/0006 Flats 49 - 66, [ADDRESS] (St Annes) [COMPANY]/30UF/LCP/2024/0007 Flats 67 - 78, [ADDRESS] (St Annes) [COMPANY]/30UF/LCP/2024/0008 Flats 79 - 96, [ADDRESS] (St Annes) [COMPANY]/30UF/LCP/2024/0009

📊 How courts decide similar cases

Among 12 similar decisions in this collection:

Allowed10 cases

Allowed in Part1 case

First-tier Tribunal (Property Chamber) Tribunal Sets Costs and Service Charges for RTM Transfer

Dismissed1 case

First-tier Tribunal (Property Chamber) First-tier Tribunal: RTM Company Not Liable for Landlord's Costs

A snapshot of this collection — not a prediction of your case's outcome.

⚖️ What tends to weigh in cases like this

✅ Tends to be accepted

It was appropriate for a Grade A fee earner to handle the complex RTM proceedings.
The managing agent's fee of £100 plus VAT per claim notice was reasonable for the checks performed.

❌ Tends to be rejected

The argument that the work was duplicated across the nine applications was not accepted.

Patterns observed in similar cases in this collection — every case is unique.

❓ Frequently asked questions

What did this decision decide?

It decided the costs payable by a Right to Manage company to landlords or tenants after receiving a claim notice.

Who was involved?

The claimant, represented by solicitors, and the respondents, represented by solicitors.

How did the court decide, and why?

The court decided that the costs were reasonable, rejecting the respondents' arguments that the work was duplicated.

Which laws or rules were applied?

The Commonhold and Leasehold Reform Act 2002, specifically section 88(4).

What was the argument that mattered most?

The argument that the work was not duplicated and the costs were reasonable.

Was the decision for or against the person who brought the case?

The decision was for the person who brought the case.

What does this mean for someone in a similar situation?

Someone in a similar situation may be able to recover reasonable costs from a Right to Manage company.

What evidence or documents mattered?

Detailed accounts of the work carried out and the invoices billed.

Can a decision like this be appealed?

Yes, any party can appeal this decision to the Upper Tribunal.

Is it worth getting a solicitor for a case like this?

Yes, it is recommended to seek advice from a qualified solicitor for cases involving Right to Manage claims.

Official source: First-tier Tribunal (Property Chamber) — headnote and full judgment reproduced from the court's public records. View on the official source ↗Summary, holding, technical summary and questions: produced by Artificial Intelligence based on the official headnote and judgment. These are VadeLab’s own material and are not the work of the Court.This decision was issued by the First-tier Tribunal (Property Chamber) and is reproduced from its published records. VadeLab is not affiliated with, and this page is not endorsed by, that court or tribunal.