Recovery of landlord’s costs of enforcing tenant’s covenants

The following Property Disputes practice note provides comprehensive and up to date legal information covering:

  • Recovery of landlord’s costs of enforcing tenant’s covenants
  • Section 146 notice and LP(R)A 1938 counter-notice
  • Separate contractual provision for recovery of enforcement costs
  • Residential leases—costs of determination of amount of service or administration charge payable

Recovery of landlord’s costs of enforcing tenant’s covenants

Most leases contain a clause allowing for the recovery of costs of taking enforcement action against tenants, sometimes limited to costs ‘in contemplation of’ or ‘in relation to’ proceedings under sections 146–147 of the Law of Property Act 1925 (LPA 1925) or the Leasehold Property (Repairs) Act 1938 (LP(R)A 1938). A landlord cannot, however, assume that such a clause enables them to recover all their costs of enforcement.

The application of a cost recovery clause will depend on its particular interpretation in each case. The decisions below are therefore illustrative only and should be viewed in that context.

Section 146 notice and LP(R)A 1938 counter-notice

Where a right to forfeit arises because of disrepair and, following service of a LPA 1925, s 146 notice, the tenant serves a counter-notice under LP(R)A 1938, the landlord must seek the leave of the court to bring proceedings for forfeiture or to recover damages. It has been held (Agricullo v Yorkshire Housing) that once a counter-notice has been served, the landlord’s costs of negotiation to remedy the breach cannot be said to be in contemplation of nor in relation to proceedings under LPA 1925, s 146. The landlord cannot proceed without the leave of the court and until they apply for and obtain leave there are no proceedings with which the costs can be

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