An RTM company can apply to the First-tier Tribunal for a determination under section 168(4) of the Commonhold and Leasehold Reform Act 2002 that a breach of covenant or condition has occurred. The application is part of the enforcement of covenants which can be made by the RTM company, the landlord or both under section 100(2).
In Eastpoint Block A RTM Company Ltd v Otubaga [2023] EWCA Civ 879; [2023] PLSCS 128, the appellant RTM company acquired the right to manage a block of flats situated in Thamesmead, London SE22. The respondent was a long leaseholder of a flat within the block.
In October 2021, the RTM company applied to the FTT for a determination under section 168(4) that the respondent was in breach of covenant by carrying out a business from his flat and by permitting his subtenant to cause a nuisance.
The FTT struck out the application for want of jurisdiction. The FTT found that the procedure under section 168(4) was a precondition of forfeiture, and under section 100(3) an RTM company could not exercise any right of re-entry or forfeiture.
The Upper Tribunal (Lands Chamber) upheld the FTT’s decision, but on differing grounds. It found that only a landlord could make an application under section 168(4). An RTM company was not a landlord for the purposes of that section. Further, only a landlord could forfeit a lease.
On appeal, the appellant argued that section 100(2) conferred on an RTM company the right to enforce untransferred tenant covenants “in the same manner” as they were enforceable by a landlord. Untransferred covenants were those outside the scope of section 96.
Further, section 100(3) did not act as a bar because it only related to the exercise by the RTM company of “any function of re-entry or forfeiture”. The Court of Appeal agreed.
Section 100(3) should be construed narrowly. Section 168(1) was concerned with paving the way for forfeiture, but an application to the FTT under section 168(4) was not, itself, a proceeding for forfeiture.
It could be a prelude to obtaining a judgment from the county court for an injunction or damages, or a charging order, or enabling the landlord to serve a notice under section 146 of the Law of Property Act 1925 and forfeit the lease.
A determination under section 168(4) was no more than a declaration that a breach had taken place and could not without more be enforced in the county court.
Elizabeth Dwomoh is a barrister at Lamb Chambers
