In Lexham House RTM Co Ltd v European Investments & Development (Properties) Ltd [2019] UKUT 390 (LC); [2019] PLSCS 237 the Upper Tribunal (UT) had to determine whether notice given by the appellant RTM company, Lexham House RTM Company Ltd (Lexham), to the respondent freeholder, European Investments & Development Properties Ltd (EID), was valid. EID argued the notice was invalid because it had not been given to European Investments & Development (London) Ltd (EIDL), an intermediate landlord, in accordance with section 79(6)(a) of the Commonhold and Leasehold Reform Act 2002 (the 2002 Act).
Lexham House was a block of 24 flats in west London (the Premises). The lessees of three top-floor flats were granted easements for the use of the roof space above their flats. In 2015, EID granted EIDL a 999-year lease of the roof. The roof was demised to EIDL for development purposes. Pursuant to the terms of EIDL’s lease, the development purpose could not be realised whilst the easements subsisted. Further, EID remained responsible for repairing the roof until development occurred.
The First-tier Tribunal (FTT) found Lexham’s notice was invalid. In reaching its decision, the FTT distinguished the leading case on the consequences of a failure to serve a notice in accordance with section 79(6) of the 2002 Act: Elim Court RTM Co Ltd v Avon Freeholds Ltd [2017] EWCA Civ 89; [2017] PLSCS 46. The FTT found that EIDL’s interest was significantly more than that held by the intermediate landlord in Elim Court, who only held an interest in a single flat in a block of 40 flats and EIDL had management responsibilities in respect of the roof.
In allowing Lexham’s appeal, the UT found the FTT had erred in distinguishing Elim Court and that its analysis failed to accord with the reality of the situation. The UT noted that EIDL had a lease of the roof space over which the three top-floor flats had an easement, but EIDL had no practical involvement in the Premises at all. As between EIDL and EID, it was EID that was responsible for the repair of the roof and compliance with the covenants in the leases of the flat.
Relying upon the ratio of the Court of Appeal in Elim Court, the UT reiterated that in assessing whether the requirements of a statutory scheme had been complied with, “substantial compliance” would not do. One had to consider the intention of the legislature in prescribing a particular procedure in light of the statutory scheme as a whole. Where, for example, critical information was missing from a notice it would generally render the notice invalid; where what was missing was only of secondary importance, the notice may be valid.
The Court of Appeal in Elim Court, found that a failure to serve an intermediate landlord with a notice had to be analysed in the context of a right-to-manage scheme that was designed to afford a simple and cheap process of enabling RTM companies to acquire the right to manage. Accordingly, a failure to serve a notice on an intermediate landlord who had no management responsibilities did not invalidate the notice.
This case provides another salutary reminder to landlords that the failure of a RTM company to serve notice on an intermediate landlord with no management responsibilities does not necessarily invalidate notice of a claim.
Elizabeth Dwomoh is a barrister at Lamb Chambers
