Subject matter: Service charges and landlords’ costs
P sued J & I for arrears of service charges. The LVT held all bar one modest charge reasonable and recoverable but that the lease did not recovery of legal costs through the service charge; if wrong, the LVT would exercise its Section 20C Landlord & Tenant Act 1985 discretion to reduce the costs by one-third because of, inter alia, repeated over-budgeting. P maintained that the over-budget was explicable and that the budget was reasonable.
(1) Even though the lease did not expressly refer to the cost of lawyers or litigation, it was clear and unambiguous that all lessees were liable, via the service charge, to subsidise P's costs of suing defaulting tenants.
(2) Budgeting was neither easy nor precise and the LVT should be very clear that consistent over-budgeting had taken place in a way that was not excusable before putting any significant weight on it.
(3) The possibility that a lessee-owned management company / landlord might become insolvent in the event of an adverse costs order deserves to be given weight but the amount of weight is a matter for the LVT in the first instance.
Alexander Bastin acted for Plantation Wharf Management Company Ltd in the Upper Tribunal (Lands Chamber).
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