I managed, between going cross eyed with the blurred images and the later clearer images, to read the whole lease. The only reference to costs is the cost of serving a section 146 notice in respect of lack of repairs by the tenant.
If you are using this for holiday letting, and you are not doing it on an Assured Short hold Tenancy, for a minimum of six months, then you are not using it as a private dwelling house. I have had several of these cases recently. It is classed as temporary accommodation not a dwellinghouse.
I think the costs the solicitors are probably referring to are going to be there costs of dealing with the alleged holiday lettings rather than the costs of dealing with the bathroom andkitchen issue.
That apart, I really need to see the letter from the solicitor and if you are doing holiday letting, you would be well advised not to let this get to court.
Further, if you have a mortgage, you will be in breach of your mortgage conditions unless holiday letting is specific only allowed the terms of the mortgage. It would be as well to check with your lender because I would be very surprised if your lender would allow this even if you have a buy to let mortgage because with my to let mortgages, they generally insist that the properties are let on a Assured Short old Tenancy