The most recent ruling from the Upper Tribunal offers valuable insights into the application of the Building Safety Act 2022 concerning recoverable service charges. Specifically, it pertains to instances where there’s a request to bypass the section 20 consultation procedure for urgent major works.

Usually, if a freeholder landlord plans works that will cost a leaseholder more than £250, they must adhere to the consultation process outlined in section 20 of the Landlord and Tenant Act 1985 (LTA 1985). However, there’s an exception for urgent works, particularly those related to occupant safety, allowing landlords to apply to the First-tier Tribunal (FtT) for dispensation from the formalities. This exception now includes urgent works under the Building Safety Act 2022 (BSA 2022).

In the case of Adriatic Land 5 Ltd v Long Leaseholders at Hippersley Point [2023] UKUT 271 (LC), the landlord sought dispensation for urgent safety repairs at Hippersley Point. While unconditional dispensation was granted, a condition under section 20C restricted the recovery of application costs from service charges. Despite the landlord’s appeal and subsequent review, the First-tier Tribunal upheld this condition through a costs order, essentially preventing the recovery of application costs via service charges.

The appeal in the Upper Tribunal centered on two key points:

  1. Whether the FtT had the authority to impose a costs condition concerning service charges.
  2. The relevance of Paragraph 9 of Schedule 8 to the BSA 2022, which had just come into effect before the review decision.

The Upper Tribunal ruled that the FtT had erred in its decision by imposing the costs order without input from the involved parties. Furthermore, it emphasized that Paragraph 9 of Schedule 8 in the BSA 2022 outlined that leaseholders aren’t liable for service charge costs related to legal or professional services incurred due to relevant defects after June 28, 2022. This provision protects leaseholders from incurring costs for dispensation applications related to building safety works under the BSA 2022.

Essentially, this ruling signifies a shift in the liability for service charge costs incurred after June 28, 2022, exempting qualifying leaseholders from these expenses. It’s a critical consideration for landlords undertaking urgent property works, as it establishes a cut off for recoverable legal costs from service charges post-June 28, 2022.


If you have any concerns regarding the above, please feel free to contact our property department.