Are litigation costs a service charge?
Eversheds has reported that, whilst there is no hard rule that use of general words in a service charge clause prevents recovery of related legal costs, in order to be certain, an obligation to pay solicitors’ costs under the service charge provision should be clearly spelt out. If those solicitors’ costs are to include litigation costs then that should equally be made clear.
Remember that, even where the lease makes provision for recovery of costs as part of the service charge, this can be overridden by the provisions of s20C of the Landlord and Tenant Act 1985.
This was clarified in the recent case Sinclair Gardens Investments (Kensington) LTD v Avon Estates (London) LTD.
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