© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
In a collective claim, a Participation Agreement. will set out your obligations with the rest of the group bringing the claim. It will usually require regular payments throughout the continuance of the claim to fund the costs and also contribute a share of the purchase price (when ascertained). The Agreement should provide that you will not do anything to invalidate the claim. If you withdraw then you accept responsibility for your share of the costs.
In collective claims, - Section 28 (4) of the Leasehold Reform, Housing and Urban Development Act 1993 (“the Act”) provides that participating tenants are liable to the landlord for all costsincurred from the initial notice until the claim is withdrawn.
Liability for costs is “joint and several”.This means the landlord canrecover its costs from any participating tenant.
If one tenant is required to pay for the overall claim then a contribution from the other participating tenants can be sought under common law or the terms of the Participation Agreement..
Where one tenant withdraws thiscan reduce the numbers needed below the qualifying threshold.
Under these circumstances, the other tenants may require the withdrawing tenant to reimburse their wasted costs as well as his/her own. The Participation Agreement should provide what happens if the tenant withdraws and, that the withdrawing tenant only has to pay his own costs of withdrawal.
If there is no written Participation Agreement,ythe other tenants would have to argue there is an implied term of good faith that all participants will continue in the claim. In practice, given the costs involved, it is unlikely that the parties would want to litigate.
What can the withdrawing tenant do to reduce his/her liability?
The Leasehold Valuation Tribunal (LVT) has jurisdiction to decide the costs which the landlord can recover. Under Section 33 of the Act the landlord can only recover its reasonable costs.
The LVT has chosen to interpret these provisions quite narrowly and inconsistently. Tenants frequently argue that the landlords costs are unreasonable. .
Landlords cannot recover their costs of appearing before the LVT even when tenants make an absurd challenge!
This injustice should be reviewed. Tenants have the upper hand so when they withdraw they will be able to successfully challenge the landlords costs and should considerably reduce these. .
These principles also apply for individual lease extension claims.
Until the market stops falling, tenants will think twice before proceeding with their claim and are likely to continue to withdraw in large numbers. Perhaps the House of Lords decision in Sportelli may also make tenants think twice..
Tenants should take advice from their solicitors and surveyors to ensure that it is in their best interests to withdraw. Even in a falling market, the difference in premium now and twelve months hence may still be more, as the term decreases.