Tenant's Cost Application Denied: Landlord Can Recover Costs Through Service Charges

OUTCOME: Dismissed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : LON/00AG/LDC/2025/0767 Property : 5-8 [APPELLANT], 97 [APPELLANT], London [POSTCODE] Applicant: [redacted]

Respondents :

[redacted] Property Type of [NAME] :

[NAME] supplemental to an [NAME] by the landlord for dispensation from the consultation requirements in respect of major works

Tribunal Members :

Judge P [NAME] of decision : 28 November 2025

DECISION ON SECTION 20C [NAME] of the tribunal The tribunal makes no order under section 20C of the Landlord and Tenant Act 1985 in respect of the costs incurred, or to be incurred, by the Applicant in connection with these proceedings.

2 The background 1. This [NAME] is supplemental to an [NAME] (the “[NAME]”) made by the Applicant pursuant to section 20ZA Landlord and Tenant Act 1985. In the [NAME] the Applicant applied for dispensation from compliance with the relevant statutory consultation requirements in respect of certain major works.

2. The tribunal’s decision in respect of the [NAME] is dated 5 November 2025 (“the Original Decision”). The tribunal agreed unconditionally to dispense with the relevant statutory consultation requirements for the reasons set out in the Original Decision. [NAME] 3. [NAME] [NAME], the leaseholder of Flat 6A and the only one of the Respondents to have opposed the [NAME] for dispensation, has made a cost [NAME] under section 20C of the Landlord and Tenant Act 1985 (a “Section 20C [NAME]”).

4. The relevant parts of Section 20C of the Landlord and Tenant Act 1985 read as follows: “(1) A tenant may make an [NAME] for an order that all or any of the costs incurred, or to be incurred, by the landlord in connection with proceedings before … the First-tier Tribunal … are not to be regarded as relevant costs to be taken into account in determining the amount of any service charge payable by the tenant … . (3) The … tribunal … may make such order on the [NAME] as it considers just and equitable in the circumstances.” 5. Therefore, a Section 20C [NAME] in the context of these proceedings is essentially an [NAME] that the Applicant be prohibited from charging to leaseholders through the service charge any of the costs incurred by it within these proceedings.

6. Ms [NAME] has not made detailed submissions in support of her Section 20C [NAME], although she is nevertheless entitled to have it considered. Tribunal’s analysis of Section 20C [NAME]

7. As noted above, in relation to a Section 20C [NAME] the tribunal “may make such order on the [NAME] as it considers just and equitable in the circumstances”, and therefore the order is a discretionary one.

3 8. In the Upper Tribunal decision in The Tenants of [ADDRESS] v [COMPANY] (LRX/37/2000), His Honour Judge Michael Rich QC stated as follows: “There is no automatic expectation of an Order under s.20C in favour of a successful tenant, although a landlord who has behaved improperly or unreasonably cannot normally expect to recover his costs of defending such conduct. In my judgement the primary consideration that the LVT [the tribunal] should keep in mind is that the power to make an order under s.20C should be used only in order to ensure that the right to claim costs as part of the service charge is not used in circumstances that make its use unjust… . [The purpose of] section 20C … is to give an opportunity to ensure fair treatment as between landlord and tenant, in circumstances where even although costs have been reasonably and properly incurred by the landlord, it would be unjust that the tenants or some particular tenant should have to pay them. Oppressive and, even more, unreasonable behaviour however is not found solely amongst landlords. Section 20C is a power to deprive a landlord of a property right. If the landlord has abused its rights or used them oppressively that is a salutary power, which may be used with justice and equity; but those entrusted with the discretion given by s. 20C should be cautious to ensure that it is not itself turned into an instrument of oppression.” 9. In the Upper Tribunal case of SCMMLA ([COMPANY], re [ADDRESS], and [ADDRESS] [2014] UKUT 58(LC), [COUNSEL] QC stated that “an order under section 20C interferes with the parties’ contractual rights and obligations and for that reason ought not to be made lightly or as a matter of course”.

10. Applying the above principles to the facts of this case, it is clearly the case that the Applicant landlord was wholly successful in respect of the [NAME]. It applied for dispensation and was granted that dispensation unconditionally. There is therefore no good reason to interfere with the parties’ contractual rights and obligations in this case by [NAME] an order prohibiting the Applicant landlord from recovering all or part of its costs through the service charge.

11. There are also two other factors of relevance in this case. First of all, there is no basis for concluding that the Applicant landlord has conducted these proceedings in an improper or unreasonable manner. Secondly, the Applicant landlord is a [COMPANY] with no funds of its own and no ground rent coming in. It is therefore wholly reliant on the service charges, and it would therefore be particularly unfair in this case to expect it to shoulder the cost burden itself instead of recovering its costs through the service charge.

12.

Accordingly, we consider it just and equitable in all the circumstances to refuse to make a Section 20C Order in this case.

4

Name: Judge P Korn Date: 28 November 2025

RIGHTS OF APPEAL

A. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber) a written [NAME] for permission must be made to the First-tier Tribunal at the regional office dealing with the case.

B. 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].

C. If the [NAME] is not made within the 28 day time limit, such [NAME] must include a request for extension of time and the reason for not complying with the 28 day time limit; the Tribunal will then look at such reason and decide whether to allow the [NAME] for permission to appeal to proceed despite not being within the time limit.

D. 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.