Tenant Wins Case Against Unjustified Legal Costs

OUTCOME: Allowed

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00BJ/LAC/2025/0604 Property : 115 [ADDRESS] [POSTCODE] Applicant : [redacted] : I/P Respondent : [redacted] [RESPONDENT] : N/A Type of application : For the determination of the liability to pay an administration charge pursuant to Schedule 11 of the Commonhold and Leasehold Reform Act 2002 Tribunal members : Judge Tagliavini Mr Kevin Ridgeway MRICS Venue : 10 [ADDRESS] [POSTCODE] Date of decision : 22 July 2025

DECISION

2 Decisions of the tribunal (1) The tribunal determines that the sum of £1800 is not payable the applicant. (2) The tribunal determines that all further legal costs, charges or fees incurred as a consequence of or incidental to the charge of £1800 being charged are also not payable by the applicant. (3) The tribunal makes an order under section 20C of the Landlord and Tenant Act 1985so that none of the landlord’s costs of the tribunal proceedings may be passed to the [NAME] through any service charge. (4) The tribunal makes an order under para. 5A of Schedule 11 of Commonhold and Leasehold Reform Act 2002 so that none of the respondent’s legal costs of administration fees can be added to the applicant’s account. The application 1. The applicant seeks a determination pursuant to Schedule 11 to the Commonhold and Leasehold Reform Act 2002 (‘the 2002 Act’ as to the amount of administration charges payable by the applicant.

Background 2. The subject property at 115 [ADDRESS] [POSTCODE] is

a 2-bedroom flat in a purpose built block of flats. The applicant is the

long leaseholder pursuant to a lease made between [APPELLANT[COMPANY] and [NAME] (Blocks U X W V & V1) [COMPANY] and [NAME] dated 3 July 2002.

3. In her application form the applicant stated that legal fees of £1,800

were added to her account after there was a leak to the flat below hers as

a result of cracks to the stack pipe located between the applicant’s flat

and the affected flat below. Remedial works were carried out by the

respondent but the applicant was subsequently charged £1,800(inc VAT

in legal fees incurred by the respondent as set out in an invoice dated

31/01/2020 from [APPELLANT] to the respondent said to be

for:

[APPELLANT]

Re: [ADDRESS] – Trace and Access

For the period 17 January – 3 February 2020 - £1770

but say £1500 plus VAT…………………………………….£1800

3 4. The sum of £1800 was subsequently added to the applicant’s service

charges and administration fees of £228.00; £78.00, £168.00 and

£507.00 (legal costs) were added for ‘late payment.’

5. In a letter dated 11 August 2020 from the applicant’s solicitors [APPELLANT] [APPELLANT] the applicant was advised it had been her responsibility to

fix the leak that occurred although the applicant did not agree with this

assessment stating that it had occurred from a communal pipe that

remained the responsibility of the respondent as acknowledge in an

email to the applicant dated 19 August 2020 from [NAME]

(contractor) and repeated in an email from [APPELLANT] to the applicant

dated 24 June 2022.

6. Thereafter, the applicant sent numerous emails to the

respondent/managing agent seeking clarification of the £1800 legal

costs added to her account. An email dated 23 July 202o from

Comptons stated ‘the costs were for works done advising KFH*/your

landlord and preparing the necessary documentation.

*Kinleigh Folkard & Hayward

The hearing 7. Neither party requested an oral hearing and the tribunal determined the

application on the papers provided in the form of a 71 page digital

bundle. The tribunal has made the following determination. The tribunal’s decision 8. The tribunal determines the £1800 legal costs plus all further

administration and legal costs arising out of or incidental to these costs,

including but not limited to the sums of £228.00; £78.00, £168.00 and

£507.00, are not payable by the applicant. . Reasons for the tribunal’s decision 9. In reaching its decision the tribunal had regard to schedule 11 of the

2002 Act. The relevant parts of this state:

1(1)In this Part of this Schedule “administration charge” means

an amount payable by a tenant of a dwelling as part of or in

addition to the rent which is payable, directly or indirectly—

(a)for or in connection with the grant of approvals under his

lease, or applications for such approvals,

4

(b)for or in connection with the provision of information or

documents by or on behalf of the landlord or a person who is

party to his lease otherwise than as landlord or tenant,

(c)in respect of a failure by the tenant to make a payment by the

due date to the landlord or a person who is party to his lease

otherwise than as landlord or tenant, or

(d)in connection with a breach (or alleged breach) of a covenant

or condition in his lease.

(2)…

(3)In this Part of this Schedule “variable administration charge”

means an administration charge payable by a tenant which is

neither—

(a)specified in his lease, nor

(b)calculated in accordance with a formula specified in his lease.

(4)…

3(1)Any party to a lease of a dwelling may apply to the

appropriate tribunal for an order varying the lease in such

manner as is specified in the application on the grounds that—

(a)any administration charge specified in the lease is

unreasonable, ...

(b)any formula specified in the lease in accordance with which

any administration charge is calculated is unreasonable, or

(c)an administration charge specified in the lease is not payable

because of paragraph 2A.

(2)…

5(1)An application may be made to the appropriate

tribunal for a determination whether an administration charge

is payable and, if it is, as to—

(a)the person by whom it is payable,

(b)the person to whom it is payable,

5

(c)the amount which is payable,

(d)the date at or by which it is payable, and

(e)the manner in which it is payable.

5A(1)A tenant of a dwelling in England may apply to the relevant

court or tribunal for an order reducing or extinguishing the

tenant's liability to pay a particular administration charge in

respect of litigation costs.

(2)The relevant court or tribunal may make whatever order on

the application it considers to be just and equitable.

(3)In this paragraph—

(a)“litigation costs” means costs incurred, or to be incurred, by

the landlord in connection with proceedings of a kind mentioned

in the table, and

(b)“the relevant court or tribunal” means the court or tribunal

mentioned in the table in relation to those proceedings. 10. Despite the tribunal’s directions dated 27 February 2025, the tribunal

finds the respondent has failed to provide any or any reasonable

explanation for the legal costs of £1800 that have been added to the

applicant’s service charge account. The tribunal also finds the

respondent has failed to provide any explanation or justification for its

use of solicitors to trace and access the leak that occurred from a

communal pipe and the addition of further administration charges and

legal costs to the applicant’s service charge account or point to the

clauses of the lease on which it relies for the addition of these charges

and costs. 11. The tribunal finds the lease at clause 2(5) provides an obligation on [NAME] pay solicitor’s costs incidental to forfeiture proceedings pursuant

to ss 146 and 147 of the Law of Property Act 1985. However, the tribunal

finds that clause is irrelevant to the respondent’s claim for legal costs of

£1800 for tracing and accessing a leak. 12. Clause 2(12)(b) of the lease requires [NAME]:

To pay and indemnify the [NAME] against all costs and expenses

including (without prejudice to the generality of the foregoing)

Solicitors’ costs and Surveyors’ fees in respect of or incidental to

any advice sought or any action reasonably contemplated or

taken by or behalf of the [NAME] in order to prevent or

6

procure the remedying of any breach or non performance by [NAME] of any of the covenant conditions or agreements herein

and on the part of [NAME] to be observed and performed 13. The tribunal finds:

(i) The respondent has expressly admitted in writing the leak was

from a communal pipe and not the responsibility of the applicant.

(ii) The applicant was not in breach of her lease.

(iii) The use of solicitors by the respondent to trace and access the leak

is unexplained.

(iv) No witness statement was provided by the respondent to explain

why it disagreed with the applicant’s application.

(v) The applicant is not liable to pay the respondent’s legal costs of

£1800 or any and all late payment fees, legal costs or other

charges arising out of or incidental to these costs of £1800.

(vi) The legal costs and administration charges and late payment fees

are excessive and unreasonable. 14. Further, the tribunal notes the applicant’s complaint that she has

allegedly been ‘locked out’ of her service charge account and is unable to

pay current service charges, thereby putting her at risk of a late

payment fee. Although not part of this application, the tribunal

hopes that no further charges are unnecessarily added to the applicant’s

account by reason of her being prevented from making current payments

of service charges (as alleged), thereby avoiding the need for a

further application to this tribunal. Application under s.20C L&T 1985/para 5A of Sch. 11 pf the 2002 Act 15. Having made the determinations above the tribunal considers that it

reasonable and appropriate that no further costs, charges or fees

incurred by the respondent in respect of this application are added to the

service charges of the [NAME] in the block or to the applicant’s service

charge account.

Name: Judge Tagliavini Date: 22 July 2022

7 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 ([NAME]), 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 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 ([NAME]).