Brady Solicitors’ property litigation experts explains the ramifications of a recent appeal case concerning the recovery of landlord’s costs.
Barratt v Robinson  UKUT 322 has provided useful guidance on when a landlord can recover costs incurred through Tribunal proceedings to determine the amount of a service charge or administration charge.
Barratt v Robinson considered a lease clause familiar to many landlords, namely a tenant’s obligation to pay the landlord’s costs incurred in the contemplation of any proceedings or the preparation of any possession notice under section 146 of the Law of Property Act 1925.
The Tribunal upheld the decision of the Court of Appeal in the 69 Marina case that a determination before the Tribunal is a pre-condition to the service of a notice under section 146.
Therefore, once service charge recovery proceedings have concluded, a landlord is ordinarily able to recover his costs, using a clause made in the terms above.
Nevertheless, the Tribunal in Barratt v Robinson made it clear that it is always necessary to consider the terms of the particular covenant and whether any relevant contemplation or anticipation existed in the circumstances of an individual case.
The outcome of Barratt v Robinson
Unfortunately for the landlord, the Tribunal was of the view that the tenant’s initial application for a determination of the sum she was liable to pay towards building insurance did not trigger any liability towards paying the landlord’s costs at the conclusion of the matter.
It could not be said that the landlord’s costs were in contemplation or anticipation of serving a section 146 notice.
Brady Solicitors’ advice
As a result of Barratt v Robinson, when responding to an application by a tenant, landlords need to think very carefully about the terms of their lease and the likelihood of recovering their costs.
On a practical note, at Brady Solicitors, we always recommend that you set out your intention to forfeit the lease when dealing with a defaulting leaseholder during the arrears recovery process.
Specialist property management solicitors
For help and advice from solicitors who are dedicated to the property management industry, contact Bradys on 0115 985 3450 or by email.