AllowedFirst-tier Tribunal (Property Chamber)·19 April 2023

First-tier Tribunal Rules RTM Company Must Pay Landlord's Costs

Case No.

📌 In brief

The First-tier Tribunal ruled that a RTM company must pay reasonable costs to a landlord due to claim notices served under the Commonhold and Leasehold Reform Act 2002. The ruling was based on the costs incurred by the landlord in response to the claim notices.

⚖️ Legal holding

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

Topics

costsright-to-manage

Provisions

Commonhold and Leasehold Reform Act 2002 s.88

📖 Technical summary

The Tribunal determined that the Respondents are liable for the costs incurred by the Applicant due to the claim notices served by the Respondents.

📜 Headnote Official document

The Tribunal determined that the Respondents are liable for the costs incurred by the Applicant due to the claim notices served by the Respondents, under the Commonhold and Leasehold Reform Act 2002. The costs were assessed based on reasonable hourly rates and disbursements.

📚 Full judgment Official document

OUTCOME: Allowed

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : LON/00AF/LCP/2022/0016 LON/00AF/LCP/2022/0017

Property : 18 [ADDRESS] [POSTCODE] 16 [ADDRESS] [POSTCODE]

Applicant : [redacted] : [COMPANY] - [COUNSEL], In House Solicitor Respondents : [redacted] [COMPANY] [ADDRESS] (Beckenham) [COMPANY] : [NAME] of Application : For the determination of the Respondents’ liability to pay [NAME]’s RTM costs Tribunal Members : Tribunal Judge I [NAME] of Decision : 11 April 2023

DECISION

2 Introduction 1. The Applicant has made two applications under section 88(1) of the Commonhold and Leasehold Reform Act 2002 (as amended) (“the Act”) for a determination of the liability of the Respondents’ to pay its costs having exercised the right to manage in respect of 16 and 18 [ADDRESS] [POSTCODE] (“the properties”).

2. On or about 31 August 2022, the Respondents served identical claim notices on the Applicant to exercise the right to manage the properties. By a letter dated 12 September 2022, the claim notices were withdrawn by the Respondents.

3. It seems that on or about 12 October 2022, the Respondents served another claim notice in respect of each of the properties, which was met by a counter notice served by the Applicant on 23 November 2022. As the Tribunal understands it, these claim notices were not proceeded with by the Respondents also.

4. By two separate applications dated 4 November 2022, the Applicant applied for a determination of the costs the Respondents should pay pursuant to section 88 of the Act.

5. On 12 January 2023, the Tribunal issued identical directions in respect of each application.

6. Pursuant to paragraph 2 of the directions, the Applicant has provided a schedule of the costs claimed against the Respondents. The legal costs are identical in respect of each property in the sum of £1,575, save for disbursements.

7. The costs mirror the invoices dated 15 September and 23 November 2022 rendered by [APPELLANT] to the Applicant. The Applicant’s schedule of costs omits to include the VAT charged in those invoices. The inference to be drawn is that the Applicant is a [COMPANY] and is not entitled to claim VAT from the Respondents, as this can be reclaimed by it. The Tribunal, therefore, proceeds to assess the Applicant’s costs on the basis of the figures contained in the schedules of cost.

8. The work has been undertaken by an in house Solicitor, Mr [COUNSEL], employed by [COMPANY]. He is a Grade A fee earner and claims an hourly rate of £350 plus VAT.

9. The Respondents have not filed or served any statement of case or points of dispute in opposition to the applications.

3 Section 88 10. This provides:

“(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) …

in consequence of a claim notice given by the company in

relation to the premises.

(2) Any costs incurred by 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)…

(4)…”

Decision 11. Pursuant to the Tribunal’s directions, the determination of this application took place on 11 April 2023 and was based solely on the documentary evidence filed by the Applicant.

Grade of Fee Earner/Hourly Rate

12. The Tribunal was satisfied that it was appropriate for a Grade A fee earner to deal with the various claim notices that were served by Respondents because this is s highly technical area of law and requires a fee earner with the requisite knowledge and expertise.

13. As to the hourly rate of £350 claimed by Mr [NAME], the Tribunal found this to be excessive and, therefore, unreasonable. The Tribunal determined that that an hourly rate of £282 per hour was reasonable based on the current guidelines for solicitors’ hourly rates for work carried out by a Solicitor located in the London 3 area. The costs allowed as being reasonably incurred are allowed at this rate.

Costs Incurred

14. It is important to note that the claim notices served by the Respondents raised exactly the same legal and factual issues in relation to the properties. It follows, that the Tribunal was satisfied that the Applicant is not entitled to separately claim costs for both properties, save for

4 disbursements. This represents a duplication of costs and cannot be said to have been reasonably incurred. Therefore, all of the costs claimed in respect of [ADDRESS] are disallowed, save for the disbursement of £9. The Tribunal was satisfied that the attendances claimed in respect of [ADDRESS] were sufficient to cover any additional time incurred for the minor amendments to any letters of documents already prepared in respect of [ADDRESS].

15. As to the costs incurred in relation to [ADDRESS], the 1-hour attendance claimed for the claim notice served on 12 October 2022 is reduced by 30 minutes because the review of the title documents from the Land Registry and Companies House had already been incurred and this represents duplication in work. This item is reduced to £141.

16. Accordingly, the costs allowed as being reasonably incurred in relation to [ADDRESS] using an hourly rate of £282 is £1,128 plus the disbursement of £36. In relation to [ADDRESS], only the disbursement of £9 is allowed.

17. The total sum of £1,173 is to be paid by the Respondents within 28 days from this decision being issued to the parties.

Fees

18. As the applications have been successful, the Tribunal orders the Respondents to also reimburse the Applicant the sum of £200 within 28 days from issue of this decision, being the fees it has paid to have the applications issued.

Name: Tribunal Judge I [NAME]: 11 April 2023

Rights of appeal By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, the tribunal is required to notify the parties about any right of appeal they may have. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written application for permission must be made to the First-tier Tribunal at the regional office, which has been dealing with the case. The application for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the person making the application. If the application is not made within the 28-day time limit, such application must include a request for an extension of time and the reason for not complying with the 28-day time limit; the tribunal will then look at such

5 reason(s) and decide whether to allow the application for permission to appeal to proceed, despite not being within the time limit. The application for permission to appeal must identify the decision of the tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal and state the result the party making the application is seeking. If the tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).

📊 How courts decide similar cases

Among 12 similar decisions in this collection:

Allowed10 cases

Allowed in Part2 cases

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

The landlord was entitled to claim costs for professional services because the right to manage company is liable for reasonable costs incurred by a landlord.
It was appropriate for a Grade A fee earner to handle the case due to the technical nature of the law.
The landlord was entitled to reimbursement for the application fees because the applications were successful.

❌ Tends to be rejected

The claimed hourly rate of £350 for the solicitor was considered too high and unreasonable.
The landlord could not claim separate costs for both properties because the claim notices raised the same legal and factual issues, representing a duplication of costs.
The full 1-hour attendance claimed for the second claim notice was reduced because some work, like reviewing title documents, had already been done.

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

❓ Frequently asked questions

What did this decision decide?

The decision determined that the RTM company must pay the landlord's costs due to claim notices served under the Commonhold and Leasehold Reform Act 2002.

Who was involved?

The case involved a landlord and a RTM company.

How did the court decide, and why?

The court decided that the RTM company must pay the landlord's costs because the claim notices served by the RTM company triggered the costs under the Act.

Which laws or rules were applied?

The Commonhold and Leasehold Reform Act 2002, specifically section 88, was applied.

What was the argument that mattered most?

The argument that mattered most was that the costs incurred by the landlord were reasonable and directly related to the claim notices served by the RTM company.

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

The decision was for the person who brought the case, the landlord.

What does this mean for someone in a similar situation?

Someone in a similar situation can seek reimbursement for reasonable costs incurred due to claim notices served by a RTM company.

What evidence or documents mattered?

The evidence included the claim notices served by the RTM company and the costs incurred by the landlord in response to those notices.

Can a decision like this be appealed?

Yes, a decision like this can be appealed to the Upper Tribunal (Lands Chamber).

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

It is recommended to get a solicitor for a case like this to ensure proper representation and understanding of the legal requirements.

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.