Even though it is a “no-fault” based right, disputes over the statutory right to manage (“RTM”) are quite common. In Avon Ground Rents Limited v 51 Earls Court Square RTM Company Limited [2016] UKUT 22 (LC); [2018] PLSCS 18 the landlord appealed a decision of the First-tier Tribunal (FTT) that an RTM claim was valid. There was but one issue on appeal to be decided by the Upper Tribunal: is the respondent company a properly constituted RTM company? If the answer is “yes”, there was a valid claim; conversely, if the answer is in the negative, the claim was invalid. In this case the premises consisted of a building containing 13 flats all held on long leases.
The starting point in any RTM claim is that an RTM company must be incorporated. The memorandum and articles of association of any RTM company must comply with the regulations made under Part 2 of the Commonhold and Leasehold Reform Act 2002. One of the articles prescribed in the regulations reads “the premises” means [name and address]” which leaves the name and the address of the premises to be inserted. What could be simpler?
In this case, the name of the premises was given as “Flat 1-13, 51 Earls Court Square, London SW5 9DG”. (The name of the RTM company was given correctly). The landlords challenged the validity of the company as an RTM company. It argued that the reference to a “flat” referred to flats in the building and not the building itself. The address given did not include the common parts or the main structure of the building. The Act only applies to the whole of a building, not its parts.
Was the building properly described in the articles of association? The UT adopted the principle (after citing a number of authorities including Lewison: The Interpretation of Contracts) that if a document is in some way ambiguous, it should be interpreted so to give effect to the intentions of the parties. Applied to this appeal, any reasonable, informed reader would conclude that the intention was to acquire the right to manage. An informed reader reading the address “Flat 1-13, 51 Earls Court Square, London SW5 9DG” would exclude the possibility that the company had been established to acquire the right to manage a single flat. The only possible answer was that the name given was the address of the whole of the building.
The FTT therefore came to the right conclusion. The company was, therefore, a properly constituted RTM company which was entitled to give a claim notice asserting the RTM. The landlord’s appeal was dismissed.
James Driscoll is a solicitor and a writer
