The Supreme Court has held that a right to manage (RTM) company can still acquire the right to manage despite defects in the service of notices inviting participation.
The Supreme Court's decision in Avon Freeholds Ltd v Cresta Court E RTM Company Ltd [2026] clarifies the extent to which landlords can rely on procedural defects to challenge an RTM claim.
The RTM regime, introduced under the Commonhold and Leasehold Reform Act 2002 (the 2002 Act), allows qualifying leaseholders to take over the management of their building through an RTM company. Unlike fault-based remedies available to leaseholders, the RTM regime does not require leaseholders to establish any wrongdoing by the landlord. Broadly speaking, leaseholders of qualifying premises may acquire the right to manage provided the statutory eligibility requirements are satisfied and the prescribed procedure is followed.
We previously discussed the Upper Tribunal's decision in this case, which considered both the status of equitable leaseholders as qualifying tenants and the consequences of failing to serve a notice inviting participation ("NIP"). The Supreme Court has now considered the latter issue and significantly narrowed the grounds on which landlords may challenge RTM claims.
In general, procedural non-compliance relating to NIPs is addressed through the Tribunal's enforcement powers under section 107 of the 2002 Act, although the Supreme Court left open the possibility that a defect may still be relied upon by the person directly affected.
Background
Before serving a claim notice, an RTM company must serve a notice inviting participation ("NIP") on every qualifying tenant who is not already a member, or who has not agreed to become a member, of the RTM company.
The building in question comprised 20 flats. The RTM company served NIPs on all qualifying tenants it had identified but did not serve one on the occupier of Flat 17, Ms O'Connor, who was later found to be a qualifying tenant. Although Ms O'Connor never received a NIP, she subsequently became a member of the RTM company and supported the RTM claim.
The landlord served a counter-notice raising several objections but the only issue considered by the Supreme Court was whether the RTM company's failure to serve a NIP on Ms O'Connor before serving the claim notice rendered the claim invalid.
The landlord's position, which had been accepted by the Court of Appeal, was that compliance with the NIP requirements was a precondition to a valid claim notice. Because Ms O'Connor had not been served with a NIP, the RTM claim was said to be invalid.
Supreme Court's decision
The Supreme Court disagreed and upheld the Upper Tribunal's decision.
It rejected the "absolute void" theory. While there was a clear requirement to serve NIPs on qualifying tenants, the legislation did not expressly provide that a failure to do so would invalidate a subsequent claim notice. It noted that Parliament had expressly provided remedies for certain forms of non-compliance elsewhere in the statutory scheme but had not stated that a claim notice would automatically be void if a NIP was omitted.
The court then applied the approach established by the House of Lords in R v Soneji. Where a statute specifies a procedural requirement but is silent as to the consequences of non-compliance, the question is whether Parliament intended the failure to invalidate the relevant process. That requires consideration of both the statutory purpose and the practical consequences of non-compliance.
The court concluded that Parliament could not have intended that an RTM claim should automatically fail because of the omission. In this case, the tenant who had not received a NIP later joined the RTM company and supported the claim, meaning no prejudice had been caused to either the tenant or the landlord. The landlord was therefore not entitled to rely on the defect to defeat the claim through the counter-notice procedure.
Practical implications and wider context
The decision is likely to have significant implications for future RTM disputes.
RTM litigation has often focused on technical defects in the statutory process, including service errors, deficiencies in notices and failures to comply with statutory time limits. The judgment narrows the scope for landlords to rely on such procedural irregularities and is likely to shift the focus of future disputes towards substantive entitlement issues, such as whether the premises qualify for RTM and whether the statutory membership requirements have been satisfied.
The decision appears consistent with the wider direction of reform in this area.
The judgment also comes against the backdrop of the Leasehold and Freehold Reform Act 2024, which contains a number of reforms intended to expand access to RTM and make it easier for leaseholders to exercise management rights.
The Supreme Court has made clear that procedural missteps will not necessarily derail an RTM claim. For landlords, the key question will increasingly be whether an RTM company satisfies the statutory conditions for entitlement, rather than whether every procedural step has been carried out perfectly.
