Right to Manage Claims: Incomplete applications and attempts to rectify

Incomplete applications and attempts to rectify

The background

Robert Court RTM Company Ltd v The Lough’s Property Management Ltd [2019] concerned a claim for the right to manage served by RTM Company Robert Court on the freeholder of the subject development. The claim was contested by the freeholder’s counter-notice. Under the Commonhold and Leasehold Reform Act 2002, the RTM Company could make an application to the First-Tier Tribunal (Property Chamber) (“FTT”) in which the RTM Company sought a determination that it was entitled to acquire the right to manage. Such application would have to be made within 2 months of the date of service of the counter-notice.

The RTM Company made an application to the FTT but it was incomplete as it did not indicate the kind of application being made on the application form. Copies of the Claim Notice and Counter-Notice were also missing. After being returned twice by the FTT, a completed application was eventually submitted outside of the 2-month period. The freeholder argued that the application had been made out of time, and, rather than making a determination as to the RTM claim, the FTT went on to consider whether the application had been made out of time.

The RTM Company was successful, the FTT concluding that the incomplete application was not fatal to the RTM claim, and the freeholder appealed.

The decision

The Upper Tribunal allowed the freeholder’s appeal, finding that the RTM Company’s initial application was unclear and did not therefore constitute an application under s.84(3) of the 2002 Act.

The minimum requirements for the application were only satisfied after the agreed 2-month period had expired, therefore deeming the application out of time.

With regards to costs, the UT commented (on an obiter basis) that the RTM Company was only liable for the freeholder’s costs until such date as the claim is deemed to have been withdrawn. This was held to be the date that the 2-month period expired. As such, the RTM Company was only liable for the freeholder’s costs until that point, and not for any costs relating to the subsequent litigation.

Advice and action for landlords

Reassuring for landlords in its decision relating to the application, Robert Court affirms the statutory position in the 2002 Act that, if an application is incomplete such that it cannot be determined what the application relates to, it will only be determined to be complete once all missing information is delivered. If the completed information is returned outside of a deadline, the application will be deemed to have been made out of time which will be fatal to an RTM claim.

Regarding costs however, the freeholder’s position in this case in opposing the validity of the application meant that it had to accept it was responsible for the majority of its own costs.