New powers limit landlords recovering cost of litigation from leaseholders
At present the courts or tribunals can make an order limiting the ability to recover professional fees incurred at the...
At present the courts or tribunals can make an order limiting the ability to recover professional fees incurred at the court or tribunal through the service charges.
The power to make such an order can be found in s20C of the Landlord and Tenant Act 1985.
However, the lease may entitle the landlord to recover such professional fees directly from the leaseholder.
Under Section 131 of the Housing and Planning Act 2016 courts and tribunals will be given a discretionary power to limit the ability of a landlord to recover these fees from a leaseholder as an administration charge.
A leaseholder will be entitled to apply to the relevant court or tribunal for an order reducing or extinguishing their liability to pay such fees.
The relevant court or tribunal may make whatever order it considers to be just and equitable.
We await regulations bringing Section 131 into force.