The Upper Tribunal (Lands Chamber) allowed a landlord's appeal, holding that the 3 March 2025 repeal of sections 88 and 89 of the 2002 Act did not remove costs liability that had already accrued.
Key facts
- Who: Landlords, right to manage (RTM) companies and their members where an RTM claim was withdrawn before 3 March 2025 and the landlord's costs are disputed
- From: 28 August 2026 (judgment date)
- Source: City and Country Properties Limited v BC Court RTM Company Limited [2026] UKUT 339 (LC)
Background
Before 3 March 2025, sections 88 and 89 of the Commonhold and Leasehold Reform Act 2002 made an RTM company, and its current and former members, liable for a landlord's reasonable non-litigation costs incurred because of a claim notice, up to the point the notice was withdrawn. Section 50 of the Leasehold and Freehold Reform Act 2024 omitted those sections and inserted sections 87A and 87B. Under the new rules, an RTM company is liable for costs after withdrawal only if it has acted unreasonably. Section 50 came into force on 3 March 2025 without any transitional regulations.
The case concerned Bishopric Court in Horsham, a building of 55 flats. On 1 August 2024 the RTM company gave the freeholder, City and Country Properties Ltd, a claim notice. The company had not served notices on the two head leaseholders. Its representative confirmed withdrawal of the claim on 5 September 2024. The landlord said its costs were £3,247.20, made up of legal fees of £1,950 plus VAT and Land Registry fees of £756 plus VAT. It applied to the First-tier Tribunal, Property Chamber (FTT) on 15 January 2025.
The question
Did the repeal, which took effect before the FTT decided the application, remove the landlord's accrued right to costs? The FTT, in a decision published on 25 September 2025, said yes. It applied the new section 87B and found no unreasonable conduct, so it ordered no costs.
The decision
Martin Rodger KC, Deputy Chamber President, allowed the appeal on this issue. The RTM company did not take part in the appeal.
The reasoning
The Tribunal relied on the presumption that legislation does not alter the legal consequences of past events unless a contrary intention appears. Section 16 of the Interpretation Act 1978 provides that a repeal does not, unless a contrary intention appears, affect any right or liability accrued under the repealed provision.
It found nothing in section 50 of the 2024 Act to show an intention to take away accrued rights. The FTT had been wrong to treat the absence of transitional provisions as pointing the other way, because no saving provision was needed to preserve accrued rights and liabilities. The Tribunal also rejected the FTT's other reasons: sections 20CA and 20J of the Landlord and Tenant Act 1985 gave no clue to Parliament's intention on this point, and the fact that the landlord knew of the Bill carried no weight, since a landlord cannot control when an RTM company makes a claim.
A second issue concerned the FTT's finding that VAT and Land Registry fees would not be payable even if the landlord was entitled to costs in principle. The question was whether the FTT acted fairly in deciding that without giving the landlord a chance to address it. The FTT had refused permission to appeal on that issue, and the landlord sought permission from the Upper Tribunal.
What this means for landlords and RTM companies
The Tribunal held that the repeal of sections 88 and 89 did not affect a costs liability that had already accrued when an RTM claim notice was withdrawn before 3 March 2025. The new "unreasonable conduct" test in section 87B therefore did not remove that liability in this case.
Anyone with a similar dispute may wish to check the dates on which the claim notice was given and withdrawn, and the documents showing the costs claimed.
Sources
- City and Country Properties Limited v BC Court RTM Company Limited [2026] UKUT 339 (LC), Upper Tribunal (Lands Chamber), 28 August 2026