The question before the Supreme Court was a narrow one: Does the failure to serve a participation notice on one qualifying tenant in a Right To Manage claim invalidate a claim notice served on the landlord?
The process when leaseholders wish to take over management of their building from their landlord is set out within the Commonhold and Leasehold Reform Act 2002 (CLRA 2002). As Lord Briggs sets out in the judgment handed down today, the legislation is in three parts – qualifying rules, the procedural code and thirdly, consequences that follow in relation to the transfer of rights.
One of the procedural steps is that the RTM company can claim the right to manage by giving a claim notice to relevant landlords having given, at least 14 days before (s79(1) CLRA 2002), a participation notice to anyone that is a qualifying tenant, but who is not (at that time) a member of the RTM company or someone who has already agreed to join (s78(1) CLRA 2002).
In this present case, the RTM company did not give a participation notice to one qualifying tenant as it was not clear who that person was due to a change in ownership. The landlord objected on the basis that failing to follow the procedure was fatal to the claim notice which was rendered invalid as a result. The Court of Appeal agreed that the words in the legislation are mandatory. A claim notice may not be given unless each person required to be given a participation notice has been given one at least 14 days beforehand.
In giving judgment, Lord Briggs said (at para. 54), “In my view section 79(2) is not about a sanction for breach of section 78(1) at all. It simply sets a 14-day time delay following the giving of the last [participation notice] to the eligible qualifying tenants…”.
Lord Briggs went on to say that given a landlord’s entitlement to object is in relation to qualification only, citing a defect in the procedural rules, “cannot be raised by way of objection…” (58).
RTMF, a leading RTM facilitator who has driven the RTM process for over a thousand buildings including Cresta Court, considers this a groundbreaking case as far as RTM companies are concerned. Their founder Dudley Joiner says, “Until now a failure to send a participation notice to just one leaseholder out of hundreds was deemed fatal to the claim. This decision changes that and massively reduces the arsenal for obstructive landlords”.
There are wider implications. As Lord Briggs states at para. 60 of the judgment, “I am not of course suggesting that Parliament cannot make compliance with matters of procedure a condition of entitlement to enforce a statutory right. Part II of the Landlord and Tenant Act 1954 is a notorious example where it has done exactly that… . But the question is always, has it done so in any particular case?”
Christian Fox says, “While the court is always reluctant to suggest a test, the answer to the question may lie at paragraph 76 of the judgment where Lord Briggs appears to consolidate analysis carried out in the earlier case of A1 properties[1] to consider whether a party might rely upon a procedural defect to claim invalidity under a statutory scheme. It will be interesting to see where else this analysis might apply.”
Winston and Christian would also like to acknowledge Justin Bates KC and Sophie Gibson of Landmark Chambers who impeccably represented the Respondents.
[1] A1 Properties (Sunderland) Ltd v Tudor Studios RTM Co Ltd [2024] UKSC 27.
