No7 – How managing agents/freeholders game the leasehold system – Section 20C, Landlord and Tenants Act 1985

Its arguably a stretch to say this is a way that managing agents/freeholder game the system but it is an excellent example of how the legislation is drafted to apparently protect leaseholders but is typical of the leasehold system with respect to leaseholders rights. It gives with one hand but takes back with the other.

When making an application to the First Tier Tribunal, applying for a section 20C order protects the applicant leaseholders from having to PERSONALLY cover the legal costs of the case. The assumption made by most leaseholders is that this prevents the freeholder/managing agent from claiming legal costs and therefore provides legal jeopardy to that party. This is only true if EVERY leaseholder is party to the section 20C order but this is rarely the case.

This principle was highlighted in Plantation Wharf Management Ltd v Fairman [2019], where the Upper Tribunal ruled that a leaseholder could not obtain a Section 20C order on behalf of all other leaseholders without their involvement.

So this still provides the freeholder/managing agent an avenue to collect their legal costs.