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Landlord and Tenant – Court Urges Simplification of ‘Right to Manage’ Rules

Procedures that have to be followed by flat tenants in order to wrest managerial control of their premises from freeholders are replete with traps for the unwary and, as one Court of Appeal case clearly showed, such a course should never be attempted without expert legal advice.

The case concerned a right to manage company that had been formed with a view to taking over management of a block of 40 flats. Pursuant to procedures laid down by the Leasehold Reform Act 2002, the company had served notices on qualifying tenants inviting them to participate in the process.

In resisting the company’s application, the freeholder pointed to procedural flaws in the notices. Tenants had not been offered facilities to inspect the company’s articles of association on a Saturday or a Sunday and no notice had been served on an intermediate landlord of one of the flats. Those arguments prevailed before the Upper Tribunal and the company’s bid to take over management was thwarted.

In upholding the company’s appeal against that ruling, however, the Court found that the notices were not invalidated by shortcomings that were purely procedural. The Court noted the melancholy fact that whenever Parliament lays down a detailed procedure for exercising a statutory right, people commonly get the procedure wrong.

This was the third time that the company had sought to take over management and the Court urged the Government to simplify the procedures in order to reduce the potential for challenge by obstructive landlords. Otherwise, objections based on technical points of no significant consequence would continue to bedevil the acquisition of the right to manage.

Elim Court RTM Company Limited v Avon Freeholds Limited. Case Number: C3/2014/4028