Recovering the Costs of Preparing s146 Notices

Where a leaseholder has breached the terms of their lease (other than non-payment of rent) the landlord can serve a notice under s.146 of the Landlord and Tenant Act 1925 giving a reasonable period of time for the leaseholder to respond regarding remedying the breach, if it is capable of being remedied. If the breach is not remedied in that time then the landlord can seek to forfeit the lease.

Such provisions were recently considered in the case of Barratt v Robinson. In that case the lessee applied for a determination of the correct sums she had to pay in respect of insurance as part of the service charges and a decision was made by the LVT accordingly. Her landlord then sought to recover the costs of the LVT proceedings (£6250) under the clause that enabled the landlord to recover costs in contemplation of proceedings for forfeiture or preparation of a s.146 notice.

Although a determination was a pre-requisite for serving a s.146 notice the issue in this case was whether there was any contemplation or anticipation of serving a s.146 notice. The Judge, on appeal, found that there was no evidence of the landlord contemplating proceedings, forfeiture or service of a s.146 notice. The LVT proceedings were brought by the lessee for a determination of the sums she had to pay. They were not brought by the landlord as a precursor to serving a s.146 notice.

The case highlights the importance of evidencing any intention to serve a s.146 or pursue forfeiture if the landlord is intending to look to recover the costs incurred in that process under the terms of the lease. Therefore, as a matter of good practice, such decisions should be recorded in writing at the time they are made so that reference can be made to this in future if challenges are raised.

P.S. This approach was confirmed in the recent Upper Tribunal decision of Willens v Influential Consultants Ltd.

For more information, please contact Neil Lawlor.


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