159 – 167 Prince of Wales Road RTM Company LTD v Assethold LTD

A “landlord under a lease” for the right-to-manage provisions of the Commonhold and Leasehold Reform Act 2002 is the holder of the legal estate. A purchaser of a registered freehold or headlease whose transfer has not been registered is merely an equitable owner. It is not a landlord for the notice and costs provisions, even if it manages the property in practice.

The prescribed scheme favours a simple and objectively ascertainable process. An estoppel by representation or convention also requires reliance caused or influenced by the alleged representation. A person who incurs costs in pursuing its own independently formed view of its status cannot establish that reliance merely because it was named as landlord in tribunal proceedings.

The appellant RTM company served a claim notice after the respondent had bought the freehold and headlease but before it had been registered as proprietor. The registered legal owners remained Millcastle entities. The respondent served a counter-notice and, after the RTM company withdrew its First-tier Tribunal application, sought costs.

The First-tier Tribunal held that the respondent was not a landlord and could not recover costs. The Upper Tribunal allowed its appeal on the basis that the RTM company was estopped from denying the respondent’s status, awarding costs and fees: [2023] UKUT 220 (LC).

The appeal concerned whether an unregistered equitable purchaser was a landlord under the statutory scheme, whether legal and equitable owners jointly constituted a landlord, and whether estoppel by representation or convention was established.

1. Appeal allowed unanimously. Assethold was not entitled to recover costs under section 88 of the Commonhold and Leasehold Reform Act 2002. The First-tier Tribunal had reached the correct result.

2. For sections 79(6) and 88(1), a “landlord under a lease” is the landlord as a matter of law. Since the freehold and headlease were registered estates, their transfers did not operate at law until registration under section 27(1) of the Land Registration Act 2002. Assethold therefore held no legal interest when the claim notice was served and was not a landlord.

3. The statutory context confirmed that construction. The management, approval and covenant functions transferred to an RTM company are functions held under the lease. Section 112(2) expressly extends “lease” to agreements for lease where the context permits, but does not similarly extend the concept to an agreement to transfer an existing registered interest. Section 112(5) concerns co-owners of the same interest. It cannot make legal and equitable owners jointly into a landlord.

4. The purpose identified in [2024] UKSC 27 supported a clear and workable rule. The prescribed notice process is intended to minimise obstructive challenges. RTM companies should generally be able to rely on the register rather than investigate unregistered equitable interests. A buyer can protect itself contractually during the registration gap.

5. No estoppel arose. Estoppel by representation requires a representation intended to induce conduct, reasonable reliance, and detriment. Estoppel by convention similarly requires an expressly shared assumption, responsibility for the other party’s reliance, actual reliance and resulting detriment. Assethold knew its own registration position, had represented itself to be freeholder, and chose to oppose the claim on its own view of its status. The RTM company’s tribunal application was a response to that opposition, not conduct inducing Assethold to incur costs.

6. The court did not decide whether the statutory costs jurisdiction could in principle be enlarged by estoppel. It explained that the estoppel observations in Benedictus v Jalaram were obiter, while its ratio concerned abuse of process.

• Court of Appeal (Civil Division): Allowed the RTM company’s appeal and held that Assethold could not recover costs under section 88 of the Commonhold and Leasehold Reform Act 2002.
• Upper Tribunal (Lands Chamber): Allowed Assethold’s appeal, found an estoppel, and awarded costs and tribunal fees: [2023] UKUT 220 (LC).
• First-tier Tribunal: Held that Assethold was not a landlord for the statutory costs regime and dismissed its costs application.