In the case of “Greening v Castlenau Mansions Limited” the Upper Tribunal had to decide whether the landlord could recover its legal costs through the service charges.
The flat owner was sued in the county court for over £11,000 service charge arrears plus interest. This included legal costs of around £4,600. The landlord argued that these costs were recoverable under the lease as it provided for the recovery of “all such surveyors, builders, architects, engineers, tradesmen, accountants or other professional persons as may be necessary or desirable for the proper maintenance safety and administration of the building”.
The case was transferred to the Leasehold Valuation Tribunal where the costs were allowed and the flat owner appealed. The Upper Tribunal allowed the appeal and found that the above clause did not extend to recovery of legal costs.
Points to note
The landlord may not be able to recover fees paid to solicitors and barristers unless there is clear wording in the lease permitting the recovery of legal costs through the service charges.
An obligation on the flat owner to pay towards professional fees may not be enough.
For further information and advice, contact Charles Goldthorpe on 01234 858000.
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