Right to Manage Application: Whether an RTM claim was invalid where claim notice was not served on intermediate landlord (A1 Properties (Sunderland) Ltd v Tudor Studios RTM Co. Ltd – 2023)

Where a Right to Manage claim notice was not served on an intermediate landlord at a development, was the RTM claim rendered invalid?

The background

A1 Properties (Sunderland) Ltd v Tudor Studios RTM Co. Ltd [2023] concerned a block of student accommodation, of which the appellant, A1 Properties, was an intermediate landlord but held no responsibilities for the building’s management. An RTM company was formed by qualifying leaseholders and the RTM claim notice given to the freeholder and management company, but not the appellant.

The management company served a counter-notice, stating that the RTM company had not complied with s.79(6) of the Commonhold and Leasehold Reform Act 2002 as a result of it not having served the claim notice on the appellant. The RTM company applied to the First-tier Tribunal for a determination as to whether RTM rights had been acquired, citing the decision in Elim Court RTM Company Limited v Avon Freeholds Limited [2017] that failure to serve notice on the appellant did not invalidate the RTM claim. The freeholder and management company were joined into the application, as well as the appellant.

The FTT concluded that the appellant’s absence of management responsibilities was a deciding factor, finding that the RTM company’s failure to serve notice on the appellant did not invalidate the claim. The appellant appealed.

The decision

The Upper Tribunal dismissed the appeal, finding that the RTM company’s failure to serve the claim notice on the appellant did not invalidate its claim to acquire rights to manage.

The failure to serve the notice in the present case had been an oversight. The UT referred to and applied Elim Court, finding that the reason for failure to serve the notice was not relevant in concluding whether RTM rights had been acquired. The outcome would remain the same regardless.

It was likely that those parties served with the claim notice would explore all potential opportunities to challenge the RTM claim, including the failure to serve notice on a relevant party. The claim was otherwise valid. Failure to serve notice on an intermediate landlord with no management responsibilities should only result in an invalid claim where no other challenge can be raised.

Failure to serve notice on the appellant was not fatal to the claim, and the reason for failure to serve was not relevant to the FTT’s decision.

Advice and action for landlords

This decision is one to be aware of for landlords in receipt of an RTM claim.

Where a party without management responsibilities is not served with the claim notice, this is not necessarily fatal to the RTM claim where the claim is otherwise properly prepared and served.