Landlords without management functions and the right to manage

When exercising the right to manage under the Commonhold and Leasehold Reform Act 2002, the failure of an RTM company to serve the claim notice on an intermediate landlord without management functions did not invalidate the claim. In A1 Properties (Sunderland) Ltd v Tudor Studios RTM Company Ltd [2023] UKUT 27 (LC), the Upper Tribunal (Lands Chamber) had to determine if the respondent RTM company had acquired the right to manage a block of student accommodation situated in Leicester. In breach of section 79(6), the RTM company had failed to serve a copy of the claim notice on the appellant, who was an intermediate landlord of parts of the building but had no management functions. Relying on Elim Court RTM Company Ltd v Avon Freeholds Ltd [2017] EWCA Civ 89, [2017] PLSCS 46, the First-tier Tribunal found that the failure to serve the notice on the appellant did not invalidate the claim and was inadvertent. In Natt v Osman [2013] EWCA Civ 584 and Elim Court, the Court of Appeal considered the effect of non-compliance in cases where a statute confers property or similar right on a private person, such as the right to manage. Whether there had been substantial compliance was irrelevant. The court had to construe the intention of the legislature as to the consequence of non-compliance: did it render the notice or other step in the proceedings invalid or not? In Elim Court, it was held that the failure to serve the claim notice on the intermediate landlord of a single flat without management functions did not invalidate the notice. The claim notice in that case was served but not at the company’s registered office. On appeal, the appellant sought to distinguish Elim Court by arguing that landlords without management functions were still entitled to receive the claim notice. Their rights under section 79(6) would be rendered illusory if the lack of management functions precluded them from objecting to non-service of the notice. Further, in the present case, the failure to serve the notice was not inadvertent. The UT found that the purpose of the claim notice was to inform everyone who had management functions that they may be about to lose the same. A failure to serve the claim notice on an intermediate landlord without any management functions did not invalidate the claim. Further, the reason for the failure to serve the notice was irrelevant. The appeal was dismissed. Elizabeth Dwomoh is a barrister at Lamb Chambers