A recent case involving a Bishop & Sewell client who is the freeholder of a block of flats, has highlighted the potential costs and inconvenience, which can be avoided if managing agents keep open the channels of communication with their tenants. It might also be an eye-opener for tenants wanting to sue their freeholder and their managing agents and they might think again.
Bishop & Sewell acted for a freehold company who found themselves on the receiving end of an application by a number of lessees who were challenging the reasonableness of the service charges. Our client had instructed managing agents to deal with the day to day management of the site. The matter was heard on several days amounting to around a total hearing length of ten days with significant legal costs being incurred by the landlord.
As it transpired, the application was withdrawn at a very late stage and part way through the substantive hearing. The small number of tenants who made the application achieved very little except to incur legal costs and to expend considerable time in dealing with this matter as well as the time spent attending the hearing to give evidence.
The landlord has the benefit of a clause in the leases which entitles it to claim its legal costs through the service charge and therefore the costs will no doubt fall to be paid by all the tenants, not just those who brought the action.
One has to consider why the applicants felt it necessary to make an application to the LVT. It became apparent from the tenant’s oral evidence that they were dissatisfied with the services of the managing agents. They perceived:
I am a solicitor who deals with many managing agents. I find that it can sometimes be very difficult to speak to them under most conditions and even more so when a urgent issue arises. It is likely that in the situation above the tenants were frustrated at not having their queries dealt with. They seem to have felt that the only way they could have their voices heard was to make an application to the LVT. It is clear that this could have been avoided.
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It seems likely that this matter arose as a result of the tenants’ frustrations. Had they been able to contact the managing agents more easily and achieve timely responses, an application to the LVT may have been avoided.
About The Author
Karen Bright is Member of Bishop & Sewell LLP and head of the Dispute Resolution & Insolvency team. She specialises in Landlord & Tenant litigation in the Leasehold Valuation Tribunals and County Courts. Karen acts for both landlords and tenants in the forfeiture of leases, injunctions, nuisance, recovery of service charges and rent, and possession work.