News story

Mediation service avoids big bills for lessees

The Leasehold Advisory service is offering an inexpensive way of resolving disputes between lessees and freeholders with a professional mediation service that is available for a token fee of just £100 from each party.

The alternative to mediation is often to become one of some 2000 cases a year that come before Leasehold Valuation Tribunals (LVTs), which are run by the Residential Property Tribunal Service (RPTS) and adjudicates on whether service charges, repair bills and other fees are reasonable. However, unlike normal courts, each party in an LVT case has to pay its own costs.

“While the expertise and wisdom shown by tribunal members in reaching good decisions is not in question, the sums in dispute can sometimes be dwarfed by the amount leaseholders end up paying in fees to lawyers, surveyors, engineers, accountants and other experts," says Nicholas Kissen, a senior legal adviser at the Leasehold Advisory Service.

"They can't know in advance how much these costs are going to be and they can find themselves up against a QC and other professionals employed by a freeholder with deep pockets and a money's-no-object attitude."

To make matters worse, Kissen says, freeholders have begun to include clauses in leases that give them the right to use the service charge to claw back any legal costs they incur as a result of an LVT case.

(News story added: 21 September 2009)