Right to Manage Application Invalid, FTT Rules

The Commonhold and Leasehold Reform Act 2002 gives leaseholders the right, under certain conditions, to take over the management of the building they live in. When attempting to exercise this right, however, it is vital to comply with the requirements set out in the Act, as demonstrated by a recent case in which a Right to Manage (RTM) company failed to give the requisite notice to the freeholder.

The company applied to the First-tier Tribunal (FTT) for a determination that it was entitled to acquire the right to manage a house containing five flats on long leases. It had served the freeholder with a claim notice stating its intention to acquire the RTM under Section 79 of the Act. The notice, which was sent by post, was dated 17 November 2023, but the freeholder did not receive it until 29 November. It required any counternotice to be served by 17 December and gave the date for acquisition of the RTM as 17 March 2024.

The freeholder served a counternotice denying that the company was entitled to acquire the RTM. This was on the grounds that the date specified for giving a counternotice was not at least one month after the claim notice was given, as required by Section 80(6) of the Act, and the date specified for acquisition of the RTM was less than three months after that, contrary to Section 80(7). The freeholder also contended that the requirement under Section 79(5) of the Act that membership of the company include a number of qualifying tenants which was at least half the number of flats had not been met.

The FTT did not accept that evidence of a visit by the tenants to the freeholder's premises on 17 November 2023 was evidence that the claim notice had been served by hand on that date. The suggestion that there was no prejudice to the freeholder because it had served the counternotice on 14 December had 'missed the point', the FTT observed, because the counternotice had pointed out deficiencies in the claim notice.

The FTT concluded that the claim notice had not specified a date for giving a counternotice at least one month after it was served. The failure to comply with the requirement in Section 80(6) was a failure to provide mandatory information that prevented the claim from being valid. The notice had also failed to comply with Section 80(7).

Although that was sufficient to dismiss the application, the FTT also found that, when the claim notice was served, the company's membership had not included the number of qualifying tenants required under Section 79(5).