Readers with an interest in leasehold management will be aware of the long-running dispute in Avon Freeholds Ltd v Cresta Court E RTM Co Ltd where a freeholder challenged the validity of an RTM notice on the basis of a procedural irregularity.

Published: 28 August 2026
Author: Laura Kent

We now have the final word from the Supreme Court, confirming that a Right to Manage company can give a valid claim notice even where it has failed to serve a Notice of Participation on all qualifying tenants.

Background

The facts of the case are simple. Avon, the freeholder of Cresta Court, granted Ms O’Connor a long lease of Flat 17 on 17 April 2020. As is not uncommon, it was some time before the new lease was registered with HM Land Registry – with the consequence that, during the registration gap, there was no express mention of the lease on the freehold title (although there were pending applications for registration against the title, which were not investigated).

In the meantime, the RTM company was formed to acquire the right to manage a self-contained part of Cresta Court – including Flat 17.

Under s.78(1) of the Commonhold and Leasehold Reform Act 2002 (CLRA), at least 14 days before giving a claim to acquire the right to manage, an RTM company must first give notice (a notice of invitation to participate or NIP) to each person who, at the time the notice is given:

(a) is the qualifying tenant (QT) of a flat contained in the premises,

but

(b) neither is nor has agreed to become a member of the RTM company.

The NIP enables QTs who are not already part of the RTM company to make an informed choice about whether to join in the acquisition of the right to manage the premises in which their flat is located. QTs do not need to respond to the NIP.

In this case, the RTM failed to give notice on Ms O’Connor, because it had no record of her interest. It then gave Avon notice of its claim to acquire the right to manage.

Section 79(2) of the Act states that:

“The 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.” [our emphasis]

There was some dispute in the lower courts as to whether, as an equitable tenant during the registration gap, Ms O’Connor was a qualifying tenant under s.75 CLRA. It was determined by the courts that she was and therefore entitled to receive an NIP.

The remaining question, decided differently in each court, was therefore: did the procedural failure by the RTM company to give a NIP to every qualifying tenant mean that the claim notice couldn’t be validly given?

1)    The First-tier Tribunal decided that the claim could be validly given: because the RTM had no actual knowledge of the existence of Ms O’Connor’s lease, and had served NIPS on all other QTs.

2)    The Upper Tribunal agreed: but on the basis that the claim was neither wholly valid nor wholly invalid, but voidable at the instance of the tenant. Here, Ms O’Connor had subsequently given her consent to become a member of the RTM, but after notice of the claim was given to Avon.

3)    The COA decided that the claim notice was invalid: because it considered that the clear effect of s.79(2) CLRA was that a failure to give a NIP to all QTs meant the claim notice may not be given, and that such an interpretation didn’t give rise to any absurdity.

Supreme Court decision

The decision of the Supreme Court (SC), handed down yesterday, confirms that the RTM company’s failure to give Ms O’Connor a NIP did not invalidate its claim.

The SC was willing to take a more broadbrush approach, focussing on the interplay of the provisions of CLRA – an Act in which various other inaccuracies are expressly stated not to give rise to invalidity (for example incorrectly including persons who are not QTs).

The difference between the SC and COA decisions was the narrowness of their readings of s.79(2). The SC distinguished the obligation to give a NIP to all QTs (s.78(1)) from the separate obligation to leave 14 days before serving the claim in s.79(2).

The SC put particular weight on the overall purpose of the statutory scheme, noting that, if (as the COA held) the claim were a complete nullity for all purposes, the whole RTM process would fall down: the landlord would not be able to give a valid counter-notice because there was no valid claim, and the RTM company would not be able to invoke the FTT’s jurisdiction to resolve a dispute about its entitlement to acquire the right to manage – not least because entitlement must be shown at the ”relevant date”, which is the date that the claim notice is given.

Instead, following the UT decision, the Court relied on the Soneji principle: where there is no express statement of the consequences of a failure to comply with a statutory procedural requirement, the court must infer Parliament’s intentions.

On the facts of this case, the SC held that there was no basis for saying that the defaults in procedure caused Avon, Ms O’Connor or anyone else any prejudice. Maintaining a narrow interpretation would have enabled persons to defeat the transfer of the right to manage on strict procedural technicalities.

Comment

Interpretation of leasehold legislation is generally tilted in favour of qualifying tenants, in order to ensure that the process is just and fair towards what are often individuals seeking better management of the buildings in which their homes are located. Lord Briggs, giving the main judgment, describes invalidity as “taking a blunderbuss to a shooting gallery” [para 59], considering that giving discretion to the court whether to impose any sanction on minor procedural defaults would be more appropriate.

Limited importance was placed on the fact that Ms O’Connor later joined the RTM, but it is worth wondering whether there would have been a different decision if she had opposed or been neutral. As the SC decision notes however, the lateness of the addition of one member – or a decision by a member not to join – would do nothing to improve or weaken the RTM’s claim if the requisite number of QTs are in favour, as QTs have no statutory right to object.

For those of us at the front line, it also is worth noting Lord Briggs’s comments at para.35(v). It can be complicated to work out which parties are qualifying tenants, but limited weight was given to the “much ink [spilt] and time spent in advocacy” arguing over the ways in which one might determine the correct QTs. Whilst prospective applicants will still need to check the identity of relevant QTs before starting an RTM claim, the decision shows that a minor oversight is not fatal.

If you have any questions on right to manage claims, or residential leasehold management more widely, please contact Lucy Walsh, Legal Director.