Significant Change to Right to Manage Case Law

Supreme Court judgment on A1 v Tudor dismisses appeal following ALEP’s intervention

In February the Association of Leasehold Enfranchisement Practitioners (ALEP) intervened in the landmark case of A1 Properties v Tudor Studios. The case was an appeal by an intermediate landlord (A1 Properties) which had not been served with a Right to Manage (RTM) claim notice by Tudor Studios Management Company Limited due to an ‘inadvertent’ omission.

A1 Properties, which has no management function, appealed to the Supreme Court on the basis that failure to serve an RTM claim notice on an intermediate landlord invalidated the transfer of management. However, the judgment, handed down on 16 August, dismissed the appeal.

This re-sets the approach of the courts to minor procedural errors on the complex requirements of property statutes. It also partly overrules 2015 guidance by the Court of Appeal in a previous case, Natt v Osman.

In dismissing the appeal, the Supreme Court accepted arguments advanced by ALEP that Natt v Osman, was inconsistent with the revised framework for assessing compliance with statutory requirements as the UKSC has determined that the decision in Natt v Osman should be qualified such that landlords are not afforded unwarranted opportunities for obstruction of the transfer of the right to manage who they themselves have not been significantly affected by any particular omission with legislative requirements.

The Supreme Court has held that to impose on an RTM company an obligation to re-start the process of an RTM claim if it happens to omit to comply with any procedural requirement would tend to undermine to an unwarranted degree the ability of tenants and RTM companies to pursue the remedy in respect of problems regarding the management of their building which Parliament intended should be available to them. It is only where a landlord or other stakeholder can show that it has lost a right to assert an objection which has substantive force in the context of the legislative scheme that it may be inferred that the transfer of the right to manage should be voidable and capable of being set aside by the person affected.

RTM legislation is a complicated area of landlord and tenant law. ALEP members are familiar with navigating it, but there are many traps for the unwary, as the huge body of case law demonstrates.

ALEP, a not-for-profit organisation representing leasehold enfranchisement professionals, intervened to seek clarification of (and potentially changes to) the law in relation to the service of notices. Importantly, this comes as the previous government’s 2024 Leasehold and Freehold Reform Act comes into effect and as the new Labour government’s Leasehold and Commonhold Reform Bill is being drafted.

ALEP had a significant role in the appeal decision. Specifically, the Supreme Court took the unusual step of allowing ALEP to make oral submissions. Lord Justice Briggs credited the “scholarly and helpful intervention” of ALEP and the “carefully prepared and very helpful submissions on this difficult piece of legislation” made on ALEP’s behalf.

Mark Chick, Partner of Bishop & Sewell LLP acted pro bono for ALEP, as did barristers Philip Rainey KC and Mark Loveday of Tanfield Chambers.

Mark Chick – Partner, Bishop & Sewell LLP and a director of ALEP commented, “The law relating to notices continues to cause difficulty, particularly where mandatory procedures laid down by Parliament are not followed. The question that the courts have had to grapple with over the years is what the consequences of that non-compliance should be. The case of A1 v Tudor provides a thorough review of the law in this area and provides greater clarity in that the courts will now look to the consequences of any non-compliance, and in particular the extent of the prejudice to any party affected by that non-compliance.”

Mark Loveday, barrister at Tanfield chambers, said, “This is a significant decision which simplifies the work of enfranchisement and RTM professionals and their clients. ALEP’s intervention was timely”.

John Midgley – Partner, Seddons Solicitors and a director of ALEP said, “This decision provides clarity and will be welcomed advisors looking to serve notices in what can be big and complex exercises where the scope for procedural errors exists.”

The judgment is available here.