A1 Properties (Sunderland) Limited v Tudor Studios RTM Company Limited

Failure to serve a right-to-manage claim notice on an intermediate landlord does not necessarily invalidate the claim. Where the landlord has no management responsibilities, the omission will not invalidate the claim merely because the landlord was entitled to receive notice under Commonhold and Leasehold Reform Act 2002, section 79(6). The reason for the omission, including whether it was deliberate or inadvertent, is irrelevant. The relevant question is the legislative intention as to the consequence of non-compliance, assessed by factors including the importance of the omitted information, whether the requirement appears in primary or secondary legislation, and whether a fresh claim can immediately be made.

The respondent RTM company sought to acquire the right to manage a student accommodation building under Part 2 of the Commonhold and Leasehold Reform Act 2002. The appellant was an intermediate landlord of four communal areas, but had no management responsibilities. The claim notice was served on the freeholder and management company, but not on the appellant.

The First-tier Tribunal held that the omission did not invalidate the claim, applying Elim Court RTM Company Limited v Avon Freeholds Limited [2017] EWCA Civ 89. The appellant appealed, arguing that the larger extent of its leases, the absence of any attempt to serve it, and the alleged deliberate nature of the omission distinguished the case. The central issue was whether those matters required a different result.

1. The appeal was dismissed. The RTM company’s claim was not invalidated by its failure to serve the appellant with a claim notice.
2. The appellant was plainly a person entitled to receive the notice under section 79(6) of the Commonhold and Leasehold Reform Act 2002. That entitlement did not, however, determine the consequence of non-service.
3. Following the approach explained in Natt v Osman [2014] EWCA Civ 1520 and applied in Elim Court RTM Company Limited v Avon Freeholds Limited [2017] EWCA Civ 89, the issue was the legislative intention as to the effect of non-compliance. Relevant considerations included the importance of the omitted notice or information, whether the requirement was contained in primary or secondary legislation, and whether the RTM company could immediately begin again with a fresh claim.
4. Elim Court established that failure to serve an intermediate landlord with no management responsibilities did not invalidate the claim. The absence of management responsibilities was the critical feature. The appellant’s leases covered four communal areas rather than one flat, but that difference did not alter the analysis.
5. The reason for the failure to serve was irrelevant. The fact that service was not attempted, or that the omission may have been deliberate, did not distinguish the case. The absence of management functions meant that the appellant was not losing the primary right affected by the statutory procedure.
6. The FTT had erred in finding that the omission was inadvertent, because there was no evidential basis for that conclusion. That error did not affect the outcome. The FTT was also entitled to conclude that the appellant could not have advanced a successful counter-notice on the material issues.
7. The Tribunal distinguished the statutory context considered in Spire House RTM Company Limited v Eastern Pyramid Group Corpn SA [2021] EWCA Civ 1658, where the interpretation adopted made the withdrawal procedure workable. In the present context, the approach in Elim Court avoided pointless expenditure of time and resources.

• First-tier Tribunal (Property Chamber): held that the failure to serve the appellant with the claim notice did not invalidate the RTM company’s claim.
• Upper Tribunal (Lands Chamber): dismissed the appeal and upheld the substance of the FTT’s decision. The Tribunal corrected the FTT’s finding that the omission was inadvertent, but held that the error was immaterial.