The First-tier Tribunal (Property Chamber) is a no-costs jurisdiction by default. But that only concerns costs between the parties. Most residential leases give the landlord a contractual right to add its own legal costs to the service charge — so a leaseholder who "wins" a service charge case can still be billed the landlord's £30–£80k of legal costs the year after.
Section 20C of the Landlord and Tenant Act 1985 is the fix. It lets the tribunal order that the landlord's costs of proceedings shall not be included in any service charge.
What to ask for
Include this in your application (or by separate written application after the hearing but before judgment):
"The Applicant seeks an order under section 20C of the Landlord and Tenant Act 1985 that all or any of the costs incurred by the Respondent in these proceedings shall not be regarded as relevant costs to be taken into account in determining the amount of any service charge payable by the Applicant or any other person specified in the application."
Ask for it on behalf of all leaseholders, not just yourself, or the landlord can charge the balance around you.
The test
The test under s.20C(3) is what is just and equitable in the circumstances. Leading authority: Tenants of Langford Court v Doren Ltd [2001] LRLR 27 — the tribunal has a wide discretion. Common factors:
- Success/failure at the hearing.
- The reasonableness of the leaseholder's conduct.
- Whether the landlord could have avoided litigation.
- The impact on other leaseholders not before the tribunal.
You do not need to have "won" every point — reasonably conducted leaseholders who lose on most issues have still secured s.20C orders.
Paragraph 5A Schedule 11 CLRA 2002
s.20C only stops costs coming back as a service charge. Many leases also allow recovery as an administration charge — often for "in relation to any breach or alleged breach of covenant". The parallel remedy is paragraph 5A of Schedule 11 to the Commonhold and Leasehold Reform Act 2002, which lets the tribunal reduce or extinguish liability for the landlord's admin-charge costs.
Always ask for both. Missing paragraph 5A is a frequent mistake.
Section 20C for landlords
Landlords should assume s.20C will be applied for and price litigation accordingly. Where a landlord expects to be paid its costs by the service charge fund it should be prepared to justify each cost line at the hearing on the Willow Court factors: proportionality, necessity, and whether the leaseholder ought reasonably to have conceded.
Rule 13 wasted costs
Independent of s.20C, rule 13 of the FTT Rules 2013 allows costs where a party has acted unreasonably in bringing, defending or conducting the proceedings. This is a high bar (see Willow Court Management Co v Alexander [2016] UKUT 290 (LC)) but is the counterweight for parties who abuse the no-costs regime.
Related
- [How to challenge service charges at the FTT](/guides/how-to-challenge-service-charges-at-the-first-tier-tribunal)
- [Paragraph 5A Schedule 11 CLRA — administration charge costs](/guides/paragraph-5a-schedule-11-clra-costs-order-explained)
Frequently asked questions
When should I apply for a s.20C order?＋
Include it in your original application. If you forgot, apply in writing after the hearing but before the decision — the tribunal usually accepts late applications on this narrow point.
Do I get a s.20C order automatically if I win?＋
No — it is discretionary. Winning strongly weighs in favour, but ask for the order expressly.
Does s.20C apply to appeals?＋
Yes — separate s.20C orders should be sought at each stage: FTT, Upper Tribunal and Court of Appeal.
Can the landlord recover costs another way if s.20C is granted?＋
Potentially through an administration charge under the lease — hence the parallel paragraph 5A CLRA application.
Do I need to prove financial hardship?＋
No. The test is 'just and equitable', not means-based.
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