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69 Marina v Oram and Ghoorun [2011]: Contractual Rights On Indemnity Basis

Where a contractual right exists (and the lease is a contract) this is often said to be on an indemnity basis meaning that the lessee covenants (promises) that all the Landlords reasonable costs are recoverable and not just the standard costs which a court normally allows “in or in contemplation of proceedings under s146 of the Law of Property Act 1925”. It was the scope of this type of covenant that fell to be considered by the Court of Appeal.

The Court held that the lessor could rely on that provision to recover the cost of a hearing before the LVT, to determine that a breach of covenant had occurred (pursuant to s168 of the Commonhold and Leasehold Reform Act 2002), because the LVT determination was a pre-condition to the service of a section 146 notice.

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