© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
In a decision that will undoubtedly be applauded by the property management industry, the Upper Tribunal (Lands Chamber) has found that a landlord may recover the fees of its managing agents, in connection with a claim, by leaseholders, to collectively acquire the freehold of a block, under Part 1, Chapter 1 of the Leasehold Reform, Housing & Urban Development Act 1993.
The case concerned a block of 63 flats (and four commercial units) in central London. The leaseholders in the block served a notice on the appellant freeholder pursuant to s.13 of the 1993 Act claiming the right collectively to acquire the freehold of the premises. The right was admitted, the terms of acquisition were negotiated, and in due course a contract for the sale of the premises was entered into and completed, and the freehold transferred to the leaseholders’ nominee purchaser.
Under s.33 of the 1993, the freeholder, and any other relevant landlord, is entitled to recover, from the nominee purchaser, any reasonable costs incurred by the freeholder (or other landlord) “of and incidental to”, a range of matters, including investigations reasonably undertaken in connection with the claim, any valuation of the freehold interest and the conveyance of the freehold to the nominee purchaser, among other items.
The nominee purchaser paid the appellant’s legal and valuation costs; however, the appellant also claimed to be entitled to the costs of its managing agents, which the nominee purchaser refused to pay.
It its decision, the First-tier Tribunal (Property Chamber) refused to order that any of the agent’s fees were recoverable. The freeholder applied for permission to appeal, and permission to appeal to the Upper Tribunal (Lands Chamber), which was granted by the Deputy President, Martin Rodger QC.
In its decision, the Upper Tribunal found (at Paragraph [11]) that:
“In my judgment the appellant’s criticisms of the F-tT decision are well founded. There is no reason in principle why costs incurred under s.33 should not include the costs of a professional agent, be they managing agent, valuer or solicitor. Indeed, subsection (2) envisages that this will be the case by referring specifically to costs incurred in respect of professional services. It goes on to prohibit the freeholder from recovering more than might reasonably be expected to have been incurred if he had been personally liable for the costs (the ‘paying party’ test). If a freeholder chooses to use agents to carry out work then it may recover those costs provided they relate to the matters set out in subsection (1)(a) to (e) and are reasonable which includes that they are such as might reasonably be expected to be incurred by him if he had been personally liable for them.”
The Upper Tribunal’s decision has clarified that, provided the costs are reasonable and properly incurred, managing agents’ fees are in fact recoverable.
Roger Hardwick, Head of Enfranchisement at Brethertons says: “We are delighted with this decision. It will be welcomed news to managing agents who assist their clients with enfranchisement claims. “
The full citation for this important decision is: Columbia House Properties (No. 3) Limited v Imperial Hall Freehold Limited [2015] UKUT 0045 (LC)