Tenant Ordered to Pay Legal Fees Incurred by Landlord

OUTCOME: Dismissed

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00BJ/LAC/2023/0010 Property : Flat 3 & 4 [ADDRESS] [POSTCODE] Applicant : [redacted] : [COUNSEL] Respondent : [redacted] : [COMPANY] of [NAME] : [NAME] for a determination of payability/reasonableness of administration charge Tribunal member : Judge Tagliavini Venue : 10 [ADDRESS] [POSTCODE] Date of decision : 4 October 2023

DECISION

2

The tribunal’s summary decision (1) The tribunal finds the respondent’s legal fees incurred in the period 06/03/2023 to 29/03/2023 in the sum of £516.60 (plus VAT) are reasonable and payable by the applicant. (2) The tribunal does not make an order under whether an order under paragraph 5A of Schedule 11 to the 2002 Act.

(3) The tribunal does not make an order for reimbursement of [NAME]/ hearing fees.

The [NAME] 1. The applicant seeks a determination under Schedule 11 to the Commonhold and Leasehold Reform Act 2002 as to whether administration charges are payable

2. The [NAME] also seeks an order to reduce or extinguish the tenant’s liability to pay an administration charge in respect of litigation costs, under paragraph 5A of Schedule 11 to the Commonhold and Leasehold Reform Act 2002.

Background

3. The dispute between the parties arises from the leaseholder applicant’s alleged failure to comply with the terms of the single long lease dated 23 March 1993, which requires the [NAME] to be notified of the sub-letting of the subject premises which comprise two flats in a purpose built block. The applicant disputes the payability and/or reasonableness of the legal costs incurred by the respondent in the sum of £758.76 (including VAT) during the process of seeking the applicant’s compliance with the lease terms. The applicant asserts these sums are not payable under the terms of the lease and/or are unreasonable.

The issues

3. The tribunal has identified the following issues to be determined:

(i) The reasonableness and payability of administrative charges for legal costs demanded by [NAME] on behalf of the respondent in 2023 totalling £758.76

(ii) whether an order under paragraph 5A of Schedule 11 to the 2002 Act should be made

3

(iii) whether an order for reimbursement of [NAME]/ hearing fees should be made

The hearing 4. As neither party requested an oral hearing the [NAME] was determined on the documents provided in a hearing bundle of 245 (electronic) pages.

5. The applicant relied upon a Statement of Case dated 6 June 2023 and a detailed Reply dated 2 August 2023. The respondent relied upon its Response dated 10 July 2023 and a witness statement of [APPELLANT] dated 7 July 2023. The applicant asserted the sum(s) demanded were unreasonable and/or were not within clause 3(10) of the lease. The respondent asserted the sums were reasonable and within the terms of the lease. The tribunal’s decision 6. The tribunal finds the respondent’s legal fees incurred in the period 06/03/2023 to 29/03/2023 in the sum of £516.60 (plus VAT) are reasonable and payable by the applicant. The tribunal’s reasons 8. The clauses of the lease the parties rely upon are as follows:

Clause 3(8)(d) Not to underlet the Demised Premises or a permitted part unless and underlease shall contain provisions similar in all respects but with any necessary modifications to those contained in Clause 4 hereof and the Fourth and Fifth Schedules hereto as the [NAME] may decide and any derivative underlease shall contain a prohibition against all dealing other than with the whole of the premises thereby demised and provisions similar but with any necessary modifications to those contained in this sub- clause.

Clause 3(9) Within fourteen days next after any subletting charging by way of legal mortgage parting with possession or devolution of the Demised Premises or any permitted part to give written notice thereof to the [NAME]’s Solicitors and to produce to them a certified copy of every instrument effecting or evidencing the

4 same and to pay to the [NAME]’s Solicitors a fee of Twenty Pounds (exclusive of Value Added Tax or any other tax payable thereon) or such other reasonable sum as the [NAME]’s solicitors shall determine for the registration of such notice.

Clause 3(10) To pay to the [NAME] all costs charges and expenses (including solicitors’ counsels’ and surveyors’ costs and fees) incurred by the [NAME] in or in contemplation of an proceedings in respect of this Lease under Sections 146 and 147 of the Law of Property Act 1925 notwithstanding that forfeiture is avoided otherwise than by relief granted by the Court.

9. The tribunal finds the letter dated 22 March 2023 from the respondent to the applicant clearly set out the consequences of continuing to fail to comply with terms of the lease. Consequently, the tribunal finds the legal costs that followed as a result of the correspondence between the parties and with the respondent client were incurred in contemplation of forfeiture proceedings and are therefore recoverable under the terms of the lease.

10. The sums demanded by the respondent are itemised in an invoice No 3187 and range from £36.90 (plus VAT) to £184.50 (plus VAT) and incurred during the period 07/11/2022 to 29/03/2022 for letter/emails between the properties and between the respondent and its legal adviser.

11. The tribunal find the applicant was in breach of the terms of lease in the period relevant to this [NAME] from 20/02/2023 to 30/03/2023 at which time compliance with the lease terms was made and formal notification of the sub-letting of Flats 3 and 4 was given and the requisite fee subsequently paid by the applicant.

12. The tribunal find [NAME] were first instructed in this matter on 22 March 2023 when it sent its first letter advising of the alleged breach to the applicant. Although the level of fee earner is not expressly identified by the respondent, the tribunal finds the individual sums claimed by the respondent during the period 22/03/2022 to 29/03/2023 are, on the balance of probabilities, both reasonable and reasonably incurred in light of the applicant’s delay in complying with the terms of its lease; [NAME] v London Borough Council [2017] EWCA Civ 45.

13. In conclusion the tribunal finds administration charges (legal costs) in the sum of £516.60 (plus VAT) are reasonable and payable by the applicant.

5 14. In light of the tribunal’s decision and reasons above, the tribunal does not make an order under paragraph 5 of Schedule 11 of the Commonhold and Leasehold Reform Act 2002 and declines to make an order for the reimbursement of the applicant’s [NAME]/hearing fee(s).

Name: Judge Tagliavini

Date: 4 October 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 [NAME] for permission must be made to the First- tier Tribunal at the [NAME] which has been dealing with the case. The [NAME] should be made on Form RP PTA available at https://www.gov.uk/government/publications/form-rp-pta-[NAME]-for- permission-to-appeal-a-decision-to-the-upper-tribunal-lands-chamber The [NAME] for permission to appeal must arrive at the [NAME] 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).