RTM Company Ordered to Pay Landlord's Costs After Claim Notice

OUTCOME: Allowed

FIRST-TIER TRIBUNAL [NAME] (RESIDENTIAL PROPERTY) Case Reference : LON/00AC/LCP/2019/0007 Property : 105 [ADDRESS], [POSTCODE] Applicants : [redacted] : [COUNSEL] Solicitors Respondent : [redacted] : To determined costs to be paid under s.88(4) of the Commonhold and Leasehold Reform Act 2002 Tribunal Members : Judge Dickie Venue : 10 [ADDRESS] [POSTCODE] Date of Decision : 23 September 2019

DECISION

Summary of Decision

Solicitors’ fees of £1,195.80 (inclusive of VAT) and disbursements of £6.50 plus VAT, and management fees of £250 plus VAT are payable by the [COMPANY] to the Applicant under section 88(1).

The Respondent shall refund to the Applicant the Tribunal fee of £100.

The Law

Commonhold and Leasehold Reform Act 2002

S.88 Costs: general

(1) A [COMPANY] is liable for reasonable costs incurred by a person who is – (a) landlord under a lease of the whole or any part of 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 service 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 [COMPANY] is liable for any costs which such a person incurs as a party to proceedings under this Chapter before the appropriate tribunal only if the tribunal dismisses the [NAME] 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 [COMPANY] shall, in default of agreement, be determined by the appropriate tribunal.

The [NAME]

1. [NAME] has been made under section 88(4) of the Commonhold and Leasehold Reform Act 2002 (“the Act”) for a determination of the amount of costs payable by the Respondent [COMPANY] in consequence of the Claim Notice given by it to the Applicant landlord. Directions were issued by the Tribunal on 5 July 2019 for the determination of this [NAME] without a hearing. Neither party has requested an oral hearing and I have determined this matter on the papers.

2. The Right to Manage Claim Notice was served by the Respondent in these proceedings on 26 September 2018. On 31 October 2018 a Counter Notice pursuant to the Act was served by the Applicant. Thereafter an [NAME] was made to the First-tier Tribunal under section 84(3), following which the RTM was acquired after a determination of the Tribunal dated 26 March 2019.

3. There has been no agreement as to the statutory costs payable by the Respondent to the Applicant. The Applicant’s costs claimed in relation to the Claim Notice are: • Solicitors’ fees of £1,195,80 (inclusive of VAT) for time spent of 3 hours and 36 minutes at the rate of £275 per hour and includes disbursements of £6.50 plus VAT (postage) and • Management fees charged by the agent of £250 plus VAT.

4. I have before me the Applicant’s statement of case, reply and supporting documents. The Respondent has failed to comply with the direction of the Tribunal that it must file and serve its statement of case in response to this [NAME] by 16 August 2019. Indeed, there has been no response by the Respondent to the Tribunal in respect of this [NAME] at all. I am satisfied that the [NAME] and the Tribunal’s directions were correctly served on the Respondent at the address specified on the Claim Notice (being the address for service on the previous [NAME] made to the Tribunal).

5. I find that the Respondent is liable to pay to the Applicant reasonable costs in consequence of the Claim Notice pursuant to section 88(1). The test for reasonableness of any costs of professional services, as defined in section 88(2), is whether it may reasonably be expected that the landlord would incur the costs if personally liable for all of them.

6. A copy invoice and a breakdown of the solicitors’ fees have been produced to me. Having regard to the breakdown of activity carried out and the evidence before me of that activity, I accept these unchallenged costs as reasonable and payable. I accept that these were solicitors retained in respect of various matters by the Applicant and these are fees the Applicant would normally pay. The solicitor’s hourly rate at £275 per hour (Grade A in) is in my view not outside of the reasonable range for a specialist of that level.

7. In respect of the fees of the managing agent, [NAME], I have been provided with a copy of the managing agent’s agreement. I am satisfied that these charges are professional fees which were incurred by the Applicant for additional non-standard management tasks by the managing agent. I accept the position of the Applicant that these include liaison between the Applicant and the Applicant’s solicitor and the provision of assistance and information to all parties throughout the progress of claim, taking the necessary steps to coordinate the management response to the notice, and to advise the landlord on the impact upon services and anticipated repairs and funding. I find these charges are reasonable and recoverable by the Applicant from the Respondent.

8. I have considered the costs claimed and I find no reason to interfere with them and I allow them in full. Given the outcome of the proceedings, and that the Respondent has not participated or responded to correspondence

from the Applicant’s solicitors seeking agreement as to costs, I make the order sought pursuant to Rule 13(2) of The Tribunal Procedure (First-tier Tribunal) ([NAME]) Rules 2013 that the Respondent must also refund the [NAME] fee to the Applicant.

9. Payment to be made within 28 days.

Name: F. DICKIE Date: 23 September 2019

Rights of appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) ([NAME]) 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 [NAME] for permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case. The [NAME] for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the [NAME].

If the [NAME] is not made within the 28-day time limit, such [NAME] 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 reason(s) and decide whether to allow the [NAME] for permission to appeal to proceed, despite not being within the time limit.

The [NAME] 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 [NAME] the [NAME] is seeking.

If the tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal (Lands Chamber).