Landlords Face Costs in Disputes

The general principle that ‘the loser pays the costs of the winner’ does not apply to disputes brought before the Leasehold Valuation Tribunal (LVT). The maximum amount the LVT can require the loser to pay is £500, and only then in exceptional circumstances.

Given that cases brought before the LVT can often last a considerable time, it is normally a good idea for a professional landlord to avoid an appearance before the Tribunal unless it is absolutely necessary. This is particularly so where the dispute concerns a property that has been professionally managed, as there will be additional fees incurred for landlords to prepare their evidence and attend the hearing. Where the landlord is successful, the costs incurred in the course of the proceedings are often prevented from being passed on by way of service charges as the tenant or tenants who bring the action can apply for an order to prevent this happening. However, such an order will only stop the costs being passed on to the lessee(s) bringing the action, not to any other tenants.

However, if the lease allows it, the landlord’s costs may be recoverable if a tenant has breached a covenant in the lease. Because of the likelihood that a tenant may seek an order to prevent the recovery of costs, a negotiated rather than a litigated solution to the dispute is often advisable.