Five justices unanimously overturned the Court of Appeal’s decision and ruled in favour of the leaseholders of a block of 20 flats in west London’s Hangar Lane last week, in Avon Freeholds v Cresta Court E RTM Company [2026] UKSC 31.
The RTM, introduced by the Commonhold and Leasehold Reform Act 2002, gives leasehold property owners a right to take over management, repairs and insurance from the landlord. The leaseholders must set up an RTM company, of which the landlord has a right to be a member, and adhere to certain procedures such as giving a notice of invitation to participate (NIP) to all eligible leaseholders 14 days before serving their RTM claim.
In Avon Freeholds, the landlord argued the RTM claim notice was fatally compromised by the company’s failure to give a NIP to the leaseholder at Flat 17. The Court of Appeal agreed, despite the fact the leaseholder concerned subsequently joined the RTM company as a member.
Giving the main judgment, Lord Briggs referred to the intention of Parliament when drafting the 2002 Act, noting that individual leaseholders can do nothing to stop the RTM transfer even if notified in time. Therefore, ‘it seems completely inexplicable that the framers of the statutory scheme should... have legislated for exactly that outcome, at the behest of landlords and others for whose benefit the obligation was not imposed and who cannot have been prejudiced by the breach’.
Mark Foxcroft, partner at Devonshires, said: ‘The Court of Appeal’s decision created a powerful tool for landlords, as a single missed qualifying tenant could now invalidate an entire claim.
‘In reversing the Court of Appeal’s decision, the Supreme Court has also removed one of the few procedural weapons available to landlords in RTM disputes. The decision also reflects the practical reality that many RTM companies struggle to identify each and every qualifying tenant, especially when leases have only been recently granted, ownership structures are complex, or there are a large number of properties involved.’
Lauren Fraser, senior associate, Charles Russell Speechlys, said: ‘The scope for landlords to challenge right to manage claims on procedural grounds is now limited.
‘This has significant practical consequences, given the increased scope of the RTM regime under the Leasehold and Freehold Reform Act 2024 to include buildings with up to 50% commercial use. Entitlement will remain an important threshold determining whether or not a claim to acquire the right to manage leads to acquisition of the right to manage.’
