RTM: consequences of a failure to serve a notice inviting participation

A failure to serve a notice inviting participation on a qualifying tenant under section 78(1) of the Commonhold and Leasehold Reform Act 2002 invalidated a claim to acquire the right to manage. Pursuant to section 78(1), a right to manage company must serve a notice inviting participation on each person who is a qualifying tenant of a flat contained in the premises but has neither agreed to become a member nor is a member of the RTM company. Section 79(2) provides that a claim notice may not be given unless each person required to be given a notice of invitation to participate has been given such a notice at least 14 days before. In respect of the claim notice, section 80(3) provides that the claim notice must state the full name of each person who is both the qualifying tenant of a flat in the premises and a member of the RTM company. In Baron Estate Management Ltd v Wick Hall (Hove) RTM Co Ltd [2023] UKTT 62 (LC); [2023] PLSCS 49 an agent acting on behalf of the respondent RTM company served NIPs on all qualifying leaseholders whom it was aware were not already members. At trial, the respondent accepted that its agent failed to serve NIPs on a registered proprietor who was a joint leaseholder and two other qualifying tenants before the claim notice was served on 28 September 2021. The appellant also alleged that there was evidence before the First-tier Tribunal that the agent had failed to serve the claim notice on one of its members who was a qualifying tenant. The FTT determined that both failures were not fatal to the respondent’s claim. The UT acknowledged that it was bound to follow Avon Ground Rents Ltd v Canary Gateway (Block A) RTM Co Ltd [2020] UKUT 358 (LC) in which the UT determined that a failure to serve a NIP in accordance with section 78(1) rendered the claim notice invalid. The Act prescribed the consequences of non-compliance under section 79(2), accordingly there was no requirement to consider the statutory scheme as a whole to determine the same. The UT also determined that on the evidence before the FTT, it should have found that the respondent had failed to comply with section 80(3). The UT, however, refused to determine whether non-compliance invalidated the claim. Elizabeth Dwomoh is a barrister at Lamb Chambers