Management firm can add legal costs to service charge, court rules

The management company of a block of flats has been told it can add legal costs to its service charge which it incurred after a tenant made empty threats to take it to court.

 

Bretby Hall Management Company (BHMC), which manages 30 apartments within a former country house in Burton upon  Trent, racked up £11,000 in costs when it was threatened by tenant Christopher Pratt. 

 

Mr Pratt had made threats to begin several court proceedings for several years, but none were ever carried out. A first tier tribunal had ruled that the BMHC could not recover the costs under the lease.  

 

But an upper tribunal hearing overturned the decision and said that the management company was  entitled to include reasonable costs of intended legal proceedings. 

 

The Judge in Bretby Hall Management Company Ltd v Pratt [2017] UKUT 70 (LC) also ruled against Mr Pratt’s application that the costs should be excluded under Section 20C of the Landlord and Tenant Act, because this related only to the legal costs of actual proceedings.