Residential landlord unable to claim costs for settling dispute via service charge

Residential landlords should take note of an Upper Tribunal (Lands Chamber) decision. The tribunal held that a landlord of a residential estate comprising three blocks of flats was not entitled to recover through the service charge the sums it paid to settle a dispute with a tenant or the legal costs incurred in securing the settlement.

The landlord had breached its repairing covenants under the lease and, after admitting liability, had failed to procure completion of the remedial works in a timely manner.