Supreme Court Judgement That Gives Hope To RTM Companies And Leaseholders

In a significant ruling, the UK Supreme Court has determined that failing to serve a claim notice on an intermediate landlord does not automatically void a Right to Manage (RTM) claim by leaseholders. The case, A1 Properties (Sunderland) Ltd v Tudor Studios RTM Company Ltd [2024] UKSC 27, is a pivotal moment for leaseholders seeking control over their property management.

Case Background

Tudor Studios RTM Company Ltd, a company formed by leaseholders, sought to take over the management of their residential building under the Commonhold and Leasehold Reform Act 2002. A1 Properties, the building’s freeholder, contested the RTM claim, arguing that it was invalid due to the RTM company’s failure to serve a claim notice on an intermediate landlord, as mandated by the Act.

Key Issue

The primary issue before the Court was whether failing to notify an intermediate landlord—positioned between the freeholder and leaseholders—invalidated the RTM claim.

Supreme Court Decision

The Supreme Court ruled in favor of Tudor Studios RTM Company Ltd, deciding that the failure to serve notice on an intermediate landlord did not automatically disqualify the RTM claim. The Court adopted a purposive interpretation of the RTM provisions, emphasizing that leaseholders’ right to manage should not be impeded by strict adherence to procedural requirements.

Rationale

The Court highlighted that while serving notices is an essential procedural step, it should not become a technical obstacle that deprives leaseholders of their statutory rights. The judgment made clear that minor procedural lapses should not defeat the Act’s primary goal—to empower leaseholders.

Implications

This decision sets an important precedent, confirming that RTM claims should not be invalidated by minor procedural errors unless they cause significant prejudice to other parties involved. It reassures leaseholders that courts may overlook procedural mistakes if they do not fundamentally affect the rights of other stakeholders.

The ruling enhances the RTM framework by making it more accessible and practical for leaseholders, aligning with the legislative intent to strengthen leaseholder rights and promote management autonomy.

If you are an RTM company or a leaseholder facing challenges in exercising your rights, or if you are a group of leaseholders considering forming an RTM, our Property Disputes Team is here to help. Please don’t hesitate to reach out for assistance. You can contact us at 0330 822 3451 or request a callback.