Recovery of Legal Costs Under a Residential Lease

Landlords (or managing agents) may, from time to time, have to deal with a tenant who fails to pay service charges in accordance with their lease. This failure is a breach by the tenant of their lease. In order to recover the unpaid charges from a tenant, it may be necessary for the landlord (or managing agent) to instruct solicitors to commence proceedings against the tenant.

Most leases contain a clause that, should a tenant breach the terms of their lease, the tenant will be liable for the landlord’s costs and expenses incurred in connection with the said breach. Costs and expenses includes legal costs. The wording of the lease will take priority over court rules so it is very important to check the clauses thoroughly. Should this provision be included in the lease, a landlord is entitled to recover their legal costs from the tenant where they are successful in their claim.

If the landlord issues a claim against the tenant for the unpaid service charges in the County Court, the landlord will also claim their legal costs in accordance with the terms of the lease. These costs will be assessed by the Court at the conclusion of the trial.

What if the claim is less than £10,000?  A claim for less than £10,000 will be a small claim. It is usual in a small claims matter that a landlord will only recover fixed costs from the tenant when they are successful. These fixed costs are determined by the Court and will most likely only be a small fraction of the costs incurred by the landlord if they have instructed solicitors.

It is imperative to review the lease before commencing proceedings to ensure that the landlord is entitled to recover legal costs (and interest) under the lease itself. It is also imperative to request an assessment of costs and a Costs Order at the conclusion of proceedings.

Remember, if a landlord’s claim is unsuccessful, they will not be able to recover their costs even if the lease contains a clause entitling them to costs.

We have extensive experience assisting landlords with recovering unpaid charges, their legal costs and dealing with possession / forfeiture proceedings. We are able to review the lease to determine a landlord’s entitlement to costs and interest and advise you of the best course of action to recover unpaid charges from a tenant. Thereafter, we can act on your behalf to bring proceedings against a tenant and ensure that you recover your legal costs at the conclusion of the claim.

If you require information or assistance regarding the recovery of legal costs, unpaid charges or possession / forfeiture proceedings, please do not hesitate to contact us at debtrecovery@woodfines.co.uk

 

Natasha Stroud