Q&As

Can a landlord charge administration charges directly, for costs it incurs in relation to enforcing tenants covenants, where the right to manage company has failed to act?

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Produced in partnership with Desmond Kilcoyne
Published on LexisPSL on 14/03/2017

The following Property Q&A Produced in partnership with Desmond Kilcoyne provides comprehensive and up to date legal information covering:

  • Can a landlord charge administration charges directly, for costs it incurs in relation to enforcing tenants covenants, where the right to manage company has failed to act?

Under the right to manage (RTM) scheme set out in the Commonhold and Leasehold Reform Act 2002 (CLRA 2002), the landlord’s management functions are transferred to the RTM company and the tenant is liable to it, rather than the landlord, in respect of the tenant’s obligations under the lease (CLRA 2002, ss 96(2), 97(4)). See generally Practice Note: The right to manage as to the entitlement to exercise, and limits of, the RTM.

‘Management functions’ are functions with respect to services, repairs, maintenance, improvements, insurance and management (CLRA 2002, s 96(5)). Accordingly, the RTM company takes over from the landlord all arrangements for management (as defined), as they are formulated in any lease in the covenants and other terms. This includes the capacity to enforce the covenants etc (such as by taking action for any debt, damages or injunctive relief), but not the right to forfeit the lease (CLRA 2002, s 96(6)(b)).

As regards any tenant covenants which are not transferred (untransferred tenant covenants) to the RTM company, these are enforceable both by the person otherwise entitled to enforce them (eg the landlord/management company) and the RTM company (CLRA 2002, s 100(2)). However, again, the RTM c

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