New case law protects tenants who make minor procedural errors in ‘right to manage’ claims
The Supreme Court judgement in the case of A1 Properties v Tudor Studios Management Company should come as a relief to tenants considering ‘right to manage’ (RTM) claims and possibly lease extension and enfranchisement claims too.
When tenants commence RTM claims there is a host of statutory requirements which they need to comply with. These requirements are set out in legislation such as the Leasehold Reform Housing and Urban Development Act 1993, and the Commonhold and Leasehold Reform Act 2002.
In this case A1 Properties, which is an intermediate landlord on the tenants’ estate, tried to argue that the tenants’ RTM claim was invalid because the tenants failed to serve it with the ‘notice of claim’. This omission was a breach of the 1993 Act. A1 Properties sought to undo the RTM claim altogether, which would have required the tenants to relinquish management of their estate and start their claim over again, wasting significant time and costs.
But the Supreme Court decided that the tenants’ RTM claim shouldn’t be undone in this case. This was because the Court decided that A1 Properties had no management functions on this estate, and so A1 Properties had not been “significantly affected” by the tenants’ omission.
Previously, UK courts had ruled that a failure to comply with statutory requirements could invalidate the whole RTM claim. In the 2014 case of Natt v Osman the Court of Appeal decided that an omission in the tenants’ notice of claim invalidated the notice even where the landlord suffered no loss because the landlord was aware of the omission. At the time Natt v Osman was described as a harsh decision because it allowed landlords to confound tenants’ claims by picking up on minor procedural errors.
The case of A1 v Tudor should provide relief to tenants. Tenants and their legal advisors will still need to take care to comply with the statutory requirements, but a procedural error which doesn’t affect the landlord won’t invalidate the RTM claim.
This decision may also apply to similar matters, such as ‘enfranchisement’ claims (where tenants purchase the freehold to their block), or lease extension claims (where tenants extend their leases).
If you are a tenant interested in purchasing the freehold to your estate or taking control of the management of your estate or extending your lease, or if you are a Landlord on the receiving end of such claims Taylor Walton have a designated commercial property department with experienced solicitors that will be able to help you. To make contact with one of the team please send us your details via our online form.
Disclaimer: General Information Provided Only
Please note that the contents of this article are intended solely for general information purposes and should not be considered as legal advice. We cannot be held responsible for any loss resulting from actions or inactions taken based on this article.
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