Avon Freeholds Ltd v Regent Court RTM Ltd: Substantial Compliance in RTM claims

Freeholders are often reluctant to allow tenants to follow the right to manage process brought in under the Commonhold and Leasehold Reform Act 2002. This has resulted in many technical challenges to tenants attempts to invoke the right to manage procedure. The latest in these line of cases concerned Regent Court in Plymouth, which I think was also a retirement development.

The Right to Manage legislation was supposed to create a simple means of leaseholders exercising a right to take control of the management of their block. The process prescribed is broadly as follows:

1. Invitation notice sent to all qualifying leaseholders;
2. Notice of claim served on landlord by participating leaseholders;
3. Landlord’s counter-notice admitting or denying the claim;
4. Acquisition of management responsibilities by the Right to Manage Company or proceedings over the validity of the RTM claim.

In this case, the tenants got everything right up to service of their initial notice which didn’t allow for the correct time periods. This was recognised and a second notice was served remedying this error but without re-inviting all of the qualifying tenants to participate. The landlord then challenged the second notice on that basis.

The Upper Tribunal appreciated the landlords argument but found that the invitation stage was not fatal to he right to the right to manage process as no serious prejudice resulted from it. The upshot of this case could be a substantial compliance threshold is enough for an RTM claim to succeed even where there is a procedural defect.

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