Claimant Acquires Right to Manage Premises

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00AH/LRM/2024/0611 Property : [ADDRESS], Addiscombe CRO 6EY Applicant : [redacted] : [NAME] Respondent : [redacted] : [COMPANY] of [NAME] : Right to manage Tribunal member(s) : Judge Daley Date of decision : 29 April 2026

DECISION

Decisions of the Tribunal (1) The Tribunal determines that The Applicant has acquired the Right to manage pursuant to the Claim Notice. (2) The Tribunal determines that the claim notice was properly served on the Respondent at its registered office address, and that no issue was taken as to the service of the claim notice; (3) The Tribunal determines there was no requirement to serve a notice of invitation to participate.

2 (4) The Tribunal determines that the Applicant was on the relevant date entitled to acquire the right to manage the premises pursuant to section 84(5)(a) of the Act, and the Applicant will acquire such right within three months after this determination becomes final. The [NAME]

1. The [NAME] is for the right to manage [ADDRESS], Addiscombe CRO 6EY (“the premises”) under Part 2 of Chapter 1 of the Commonhold and Leasehold Reform Act 2002 ("the Act"). The Respondent freeholder has served a counter-notice asserting that the Applicant [COMPANY] was not on the relevant date entitled to acquire the right to manage.

2. A case management hearing was held, remotely by considering the papers, and Directions were given for the hearing of this matter. These directions set out the steps to be taken by the parties in preparation of the hearing and provided that-: “Unless a hearing is requested the tribunal will decide this [NAME] during the seven days commencing 19 May 2025 based on written representations.” 3. The Directions were subsequently amended on 25 March 2025, although the hearing dates remained the same, the dates were amended to provide additional time for the parties to comply.

4. On 20 May 2025, the Tribunal wrote to the parties, informing them that the hearing bundle was unopenable, and asking for copies of the [NAME] to register the company and the memorandum of associates showing the original subscribers, and asking whether the proceeding should be stayed in accordance with [COMPANY] v- [ADDRESS] E [COMPANY] (2024) UKUT 335.

5. On 2 June 2025, the hearing was stayed by the Tribunal, the claim was further stayed pending the outcome of an appeal to the Supreme court. Following the outcome of this case in the court of appeal. In response to a request from the Tribunal for both parties to set out their respective positions, both the applicant and the respondent confirmed that they wished to proceed with the hearing.

6. On 9.09.2025, the Applicants’ representative set out their understanding of the position, pursuant to the decision in the court of appeal case. On 3 October 2025, the Respondent wrote to the Tribunal that the Respondent’s in [RESPONDENT] –v- [RESPONDENT] had sought leave to appeal to the Supreme court and given this the position was not finalised.

7. On 20 March 2026, the solicitors acting for the Respondent wrote to the Tribunal by email indicating that they were no longer acting for the

3 respondent in these proceedings and asking the Tribunal to communicate directly with [COMPANY].

8. The matter was listed for a paper determination in the week beginning 13 April 2026.

9. There was no further [NAME] to stay this case, following the Respondent’s email correspondence dated 3 October 2025. The Tribunal decided that there was sufficient evidence before it and was satisfied that it was appropriate to deal with this case based on written representations.

The law 10. The relevant provisions of the Act are referred to in the decision below. The Facts 11. The background to this matter is as follows the premises is an off-street property which has been converted into three flats, flats A, B and C. On 11 September 2024, the applicant a [COMPANY] served a Claim Notice (“the Notice”) on the Respondent asserting the Right to Manage. The Notice included a Schedule setting out the members of the company and the [NAME]. Who were listed as [NAME] and [COMPANY]. All three of the [NAME] were members of the [COMPANY].

12. Following service of the Notice the Respondent’s solicitors wrote to the Applicants’ representative asking for a copy of the register of members and a copy of the notice of invitation to participate amongst other documents.

13. In reply, the Applicant stated that the Notice of Invitation was not applicable because all three of the [NAME] were members of the [COMPANY]. The register of guarantee for the company listed [NAME] –[NAME] and [NAME[NAME] [NAME] who was in fact the director of the company, [APPELLANT], the [NAME] for one of the flats.

The counter-notice 14. The Respondent served a counter notice. In its counter-notice, dated 22 October 2024, the Respondent raised the following issue that by virtue

4 of Section 78(1) of the Commonhold and Leasehold Reform Act 2002 the Applicant was not entitled to the right to manage the premises because the notice of invitation to participate was not given to each person as required by the section.

15. The notice did not comply with the requirements in Section 79(2) or provide the information required in Section 80(3) of the Act.

16. In the Respondent’s Statement of Case, the Respondent stated at paragraph 5 That the Applicant has failed to serve the [NAME] of flat 23C, [COMPANY] with a Notice Inviting Participation (NIP). In the Statement of Case the Respondent set out that the Applicant was subject to the requirements of the Companies Act 2006 for a person to be entered as a member of the company. The statement further submitted that [NAME] was not a member of the company contrary to the claims notice and given this they should have been given a copy of the notice of invitation to participate.

17. Following the lifting of the stay in this matter, both parties were invited to make submissions as set out above.

18. Having considered the hearing bundle which comprised 257 pages bundle, the tribunal made the following decision.

The Tribunal's decision 19. The Tribunal has considered the submissions of both parties.

20. The Tribunal finds the following facts, that at the time of registering the [COMPANY], the company directors were [NAME[NAME] and [NAME[NAME] [NAME]. [NAME[NAME] was also the director of the company [NAME]. The company [NAME], by virtue of being a party to the lease was the [NAME] in accordance with Section 75(2) of the Act. Although [NAME[NAME] was a director of [NAME], she was not the [NAME]. Given this she was not entitled to be a member of the [COMPANY].

21. Although it is not explicitly set out, the Tribunal finds that her inclusion was an error. Given this, the issue that the Tribunal had to consider was whether the [COMPANY] was required prior to [NAME] a claim was required to give notice to each person who was a [NAME], who neither was nor had agreed to become a member of the [COMPANY].

22. To fully understand the Tribunal’s decision, it is necessary to consider the case of [COMPANY] –v- [RESPONDENT]. In brief this was a case in which the Respondent [COMPANY] failed to serve a notice to participate on a [NAME], who although resident in the subject premises for some time was not registered in the land register.

23. The RTM in this case served a Notice of Claim on the Landlord, however at that stage the [NAME] had not been served with a notice to participate, neither was she a member of the [COMPANY]. Five days after the Notice was served the Tenant agreed to become a member of the RTM. [ADDRESS] of appeal in its decision stated that the language in Section 78(1) and 79(2) were mandatory, such that a failure to comply would defeat the Applicant RTM’s Right to Manage.

24. The Tribunal was referred in the Applicants updated submissions to Paragraph 9 of [COMPANY] –v- [COMPANY] In which it was stated that “ It is also common ground that the respondent did not give a participation notice to [The [NAME]] either within the period ending 14 days before the notice was given stipulated by Section 79(2)...if she had given that consent to become a member of the respondent, and if she had given that consent at least 14 days before the claim notice was served there would be no requirement to give her a participation notice at all...” 25. The Appeal Court decision referred to Section 79(2) “Which states that the claim notice must not be given, unless each person required to be given a Notice of Intention to Participate (NIP) has been given a NIP at least 14 days before the claim notice.

26. The issue was whether the NIP had been given to [NAME], 14 days prior to the service of the Notice or whether the requirement was not necessary as [NAME] was a member of the RTM or had agreed to become a member (Section 78 (1) b).

27. Within the bundle the Tribunal was provided with a certificate setting out details of a new appointment of a director of the RTM, the [NAME] for appointment was submitted on 15.04.2024, the date of the appointment was the 03.08.2024. This was the same date on which [NAME] was appointed. This was followed by the termination of [NAME] appointment as a director on 17.04.2025.

28. The Tribunal has asked itself whether on the 28 August 2024, there was a requirement for the Applicant to serve a NIP? At that date all of the [NAME] were members of the [COMPANY], as both [NAME] and [NAME] had become members of the RTM on 3.08.24 more than 14 days before the Notice of Claim.

29. Given this the Tribunal finds that by virtue of Section 79(2). Each of the [NAME] has agreed to become a member of the [COMPANY]

6 prior to the Notice of Claim being served and that there was no requirement to serve a NIP on [NAME].

30. Having made its findings the Tribunal determines that the Applicant met the requirements to acquire the right to manage. Summary of Decision 31. Overall, the Tribunal determines that the Applicant was on the relevant date entitled to acquire the right to manage the premises pursuant to section 84(5)(a) of the Act.

32. Therefore, in accordance with section 90(4), within three months after this determination becomes final the Applicant will acquire the right to manage these premises. According to section 84(7): “(7) A determination on an [NAME] under subsection (3) becomes final— (a) if not appealed against, at the end of the period for bringing an appeal, or (b) if appealed against, at the time when the appeal (or any further appeal) is disposed of.”

Name:

Judge Daley

Date: 29 April 2026

Rights of appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, the tribunal is required to notify the parties about any right of appeal they may have. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written [NAME] for permission must be made to the First- tier Tribunal at the regional office which has been dealing with the case. The [NAME] for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the [NAME]. If the [NAME] is not made within the 28-day time limit, such [NAME] must include a request for an extension of time and the reason for not

7 complying with the 28-day time limit; the tribunal will then look at such reason(s) and decide whether to allow the [NAME] for permission to appeal to proceed, despite not being within the time limit. The [NAME] for permission to appeal must identify the decision of the tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal and state the result the party [NAME] the [NAME] is seeking. If the tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal (Lands Chamber).

Appendix One Section 71-79 The right to manage (1) This Chapter makes provision for the acquisition and exercise of rights in relation to the management of premises to which this Chapter applies by a company which, in accordance with this Chapter, may acquire and exercise those rights (referred to in this Chapter as a [COMPANY]). (2) The rights are to be acquired and exercised subject to and in accordance with this Chapter and are referred to in this Chapter as the right to manage. Premises to which Chapter applies (1) This Chapter applies to premises if— (a)they consist of a self-contained building or part of a building, with or without appurtenant property, (b)they contain two or more flats held by [NAME], and (c)the total number of flats held by such tenants is not less than two-thirds of the total number of flats contained in the premises. (2)A building is a self-contained building if it is structurally detached. (3)A part of a building is a self-contained part of the building if—(a)it constitutes a vertical division of the building, Section 74 [NAME] (1) This section specifies what is a [COMPANY]. (2)A company is a [COMPANY] in relation to premises if— (a)it is a private company limited by guarantee, and (b)its articles of association state] that its object, or one of its objects, is the acquisition and exercise of the right to manage the premises. (3) But a company is not a [COMPANY] if it is a [COMPANY] (within the meaning of Part 1). (4) And a company is not a [COMPANY] in relation to premises if another company is already a [COMPANY] in relation to the premises or to any premises containing or contained in the premises.

8 (5)If the freehold of any premises is conveyed or transferred to a company which is a [COMPANY] in relation to the premises, or any premises containing or contained in the premises, it ceases to be a [COMPANY] when the conveyance or transfer is executed.

(b)the structure of the building is such that it could be redeveloped independently of the rest of the building, and(c)subsection (4) applies in relation to it. (4) This subsection applies in relation to a part of a building if the relevant services provided for occupiers of it—(a)are provided independently of the relevant services provided for occupiers of the rest of the building, or(b)could be so provided without involving the carrying out of works likely to result in a significant interruption in the provision of any relevant services for occupiers of the rest of the building. (5) Relevant services are services provided by means of pipes, cables or other fixed installations. Section 74 [NAME]: membership and regulations (1) The persons who are entitled to be members of a company which is a [COMPANY] in relation to premises are— (a)[NAME] of flats contained in the premises, and (b)from the date on which it acquires the right to manage (referred to in this Chapter as the “acquisition date”), landlords under leases of the whole or any part of the premises. (2) The appropriate national authority shall make regulations about the content and form of the [articles of association] of [NAME]. Section Notice inviting participation (1) [NAME] a claim to acquire the right to manage any premises, a [COMPANY] must give notice to each person who at the time when the notice isgiven— (a)is the [NAME] of a flat contained in the premises, but (b)neither is nor has agreed to become a member of the [COMPANY]. (2)A notice given under this section (referred to in this Chapter as a “notice of invitation to participate”) must— (a)state that the [COMPANY] intends to acquire the right to manage the premises, (b)state the names of the members of the [COMPANY], (c)invite the recipients of the notice to become members of the company, and (d)contain such other particulars (if any) as may be required to be contained in notices of invitation to participate by regulations made by the appropriate national authority.

9 (3)A notice of invitation to participate must also comply with such requirements (if any) about the form of notices of invitation to participate as may be prescribed by regulations so made. (4)A notice of invitation to participate must either— (a)be accompanied by a copy of the [[COMPANY]] of the [COMPANY], or (b)include a statement about inspection and copying of the [[COMPANY]] of the [COMPANY]. (5)A statement under subsection (4)(b) must— (a)specify a place (in England or Wales) at which the [[COMPANY]] may be inspected, (b)specify as the times at which they may be inspected periods of at least two hours on each of at least three days (including a Saturday or Sunday or both) within the seven days beginning with the day following that on which the notice is given, (c)specify a place (in England or Wales) at which, at any time within those seven days, a copy of the [[COMPANY]] may be ordered, and (d)specify a fee for the provision of an ordered copy, not exceeding the reasonable cost of providing it. (6)Where a notice given to a person includes a statement under subsection (4)(b), the notice is to be treated as not having been given to him if he is not allowed to undertake an inspection, or is not provided with a copy, in accordance with the statement. (7)A notice of invitation to participate is not invalidated by any inaccuracy in any of the particulars required by or by virtue of this section. Notice of claim to acquire right (1)A claim to acquire the right to manage any premises is made by giving notice of the claim (referred to in this Chapter as a “claim notice”); and in this Chapter the “relevant date”, in relation to any claim to acquire the right to manage, means the date on which notice of the claim is given. (2)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. (3)The claim notice must be given by a [COMPANY] which complies with subsection (4) or (5). (4)If on the relevant date there are only two [NAME] of flats contained in the premises, both must be members of the [COMPANY]. (5)In any other case, the membership of the [COMPANY] must on the relevant date include a number of [NAME] of flats contained in the premises which is not less than one-half of the total number of flats so contained. (6) The claim notice must be given to each person who on the relevant date is—

10 (a)landlord under a lease of the whole or any part of the premises, (b)party to such a lease otherwise than as landlord or tenant, or (c)a manager appointed under Part 2 of the Landlord and Tenant Act 1987 (c. 31) (referred to in this Part as “the 1987 Act”) to act in relation to the premises, or any premises containing or contained in the premises. (7) Subsection (6) does not require the claim notice to be given to a person who cannot be found or whose identity cannot be ascertained; but if this subsection means that the claim notice is not required to be given to anyone at all, section 85 applies. (8)A copy of the claim notice must be given to each person who on the relevant date is the [NAME] of a flat contained in the premises. (9)Where a manager has been appointed under Part 2 of the 1987 Act to act in relation to the premises, or any premises containing or contained in the premises, a copy of the claim notice must also be given to the .. tribunal or court by which he was appointed.