A recent decision of the Upper Tribunal (Lands Chamber)*, concerning an appeal from the First Tier Tribunal’s decision about service charges and legal costs, has very usefully analysed the previous law and set out and confirmed the position on whether legal costs can be recovered from tenants under leases.
The key points are to correctly identify, and then interpret the relevant provisions in the lease, where, typically, there may be several clauses which refer to various kinds of expenditure and which may or may not include specific references to legal costs incurred by the Building’s owner or management.
Legal costs may be for advice on the management of a building, for recovery of rent and service charge arrears; the legal costs of proceedings against third parties, such as tenants, or neighbouring building owners, negligent builders, or insurance companies which refuse to pay out insurance claims for the building.
The issue under appeal was whether one of the clauses enabled the landlord to recover any legal costs, broadly under a provision relating to the costs of management.
The Judge, Elizabeth Cooke, reviewed 7 leading cases on the subject, and set out her reasoning for her conclusion that, on the wording of the particular clause, and also considering other clauses where various landlord costs might be recoverable, that none of the claimed legal costs making up a disputed bill of over £55,000 were recoverable through service charges payable by the tenants.
[There is a right of appeal on any point of law, to the Court of Appeal.]
[* Triplark Limited -v- Martin Howard (and 55 others) [2025] UKUT 232(LC))