Avon Freeholds Limited v Cresta Court E RTM Company Limited

Under Chapter 1 of Part 2 of the Commonhold and Leasehold Reform Act 2002, failure to give every eligible qualifying tenant a notice of invitation to participate, or to wait 14 days before serving the claim notice, does not invalidate the claim notice. Sections 78(1) and 79(2) impose procedural requirements rather than substantive conditions of entitlement. A landlord cannot rely upon their breach in a counter-notice under section 84.

Where legislation does not state the consequences of procedural non-compliance, the court determines Parliament’s intention from the statutory purpose and context and from the consequences on the particular facts, including prejudice and injustice. The available sanction for breach of these notice requirements is discretionary enforcement under section 107.

Cresta Court E RTM Company Limited claimed the statutory right to manage a block of 20 flats owned by Avon Freeholds Limited. Before serving its claim notice, the RTM company failed to give one qualifying tenant a notice of invitation to participate. That tenant later joined the company and supported its claim. The landlord suffered no prejudice but contended that sections 78(1) and 79(2) of the Commonhold and Leasehold Reform Act 2002 made the claim notice void.

The First-tier Tribunal upheld the claim, and the Upper Tribunal agreed. The Court of Appeal, in [2025] EWCA Civ 1016, held that the omission rendered the claim notice a nullity. The central issue before the Supreme Court was whether non-compliance with sections 78(1) and 79(2) invalidated the claim notice or could found a landlord’s counter-notice disputing the RTM company’s entitlement.

1. Appeal allowed unanimously. Lord Briggs, with whom Lord Reed, Lord Stephens, Lady Rose and Lord Snowden agreed, held that the failure to comply with sections 78(1) and 79(2) of the Commonhold and Leasehold Reform Act 2002 did not invalidate the claim notice. The decision of the Upper Tribunal was restored.

2. The scheme distinguishes substantive entitlement conditions from procedural requirements. The substantive conditions are principally contained in sections 72–77 and 79(3)–(5). Sections 78(1) and 79(2) regulate the procedure for giving notices of invitation to participate and the timing of the claim notice. Accordingly, a counter-notice under section 84(2)(b) may allege failure to satisfy substantive entitlement conditions, but cannot rely upon non-compliance with sections 78(1) or 79(2).

3. Neither section 78(1) nor section 79(2) states that non-compliance invalidates a claim notice. Section 79(2) is a self-contained timing rule requiring a 14-day interval after the last required invitation. Its mandatory wording does not itself determine the consequences of breach. Parliament used express language about validity elsewhere, including sections 78(7) and 81(1), and provided a discretionary enforcement mechanism in section 107.

4. The principle in R v Soneji [2005] UKHL 49 therefore applied. The intended consequences of procedural non-compliance had to be inferred from the statutory purpose and context and from the particular facts, including prejudice or injustice. The invitation requirements protect eligible qualifying tenants, not landlords. Qualifying tenants cannot serve counter-notices, while an unaffected landlord should not receive a windfall power to defeat the statutory process. No relevant person was prejudiced here.

5. The contrary statement in paragraph 69 of A1 Properties (Sunderland) Ltd v Tudor Studios RTM Co Ltd [2024] UKSC 27 was not part of that decision’s ratio. It did not concern the provision then in issue, was unnecessary to the reasoning, had not been argued, and addressed a question expressly reserved for later decision. It was therefore not followed. The wider analysis in that case concerning prejudice, procedural windfalls and obstructive reliance upon harmless omissions supported the present conclusion.

6. The available sanction for breach of sections 78(1) or 79(2) is an application by an interested person under section 107. That provision permits the tribunal, in its discretion, to require the default to be remedied. In an appropriate case, such as a deliberate failure to send any invitations, relief could include requiring the claim process to begin again.

1. United Kingdom Supreme Court: Allowed the RTM company’s appeal in [2026] UKSC 31 and restored the decision of the Upper Tribunal.
2. Court of Appeal: In [2025] EWCA Civ 1016 , allowed the landlord’s appeal and held that the failure to give the qualifying tenant a notice of invitation to participate rendered the claim notice a nullity.
3. Upper Tribunal: Upheld the First-tier Tribunal’s determination that the RTM company’s claim was well-founded despite the procedural omission.
4. First-tier Tribunal: Determined that the RTM company was entitled to acquire the right to manage.