First-tier Tribunal Grants Claimant Right to Manage Property

OUTCOME: Allowed

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Case Reference

Property

Applicant

Representative

:

:

:

:

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

CHI/43UE/LRM/2024/0006

[ADDRESS], [POSTCODE] (“the property”)

[RESPONDENT]

Respondent: [redacted]

(2)

[COMPANY]

10 [RESPONDENT] [COMPANY] of [NAME]

Tribunal Member

Date of Decision

:

:

:

:

(1) [NAME]

(2) [COMPANY]

(No Fault) Right to Manage, Chapter 1 of the

Commonhold and Leasehold Reform Act 2002

Tribunal Judge Lederman

30 December 2024

DECISION AND REASONS

© [NAME]

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DECISION

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Order : This [NAME] succeeds and the Applicant therefore acquires the right to manage the property as set out in section 90 of the Commonhold and Leasehold Reform Act 2002.

Reasons

The [NAME] and background

1

The Applicant seeks a determination that at the relevant date it was entitled to acquire the right to manage [ADDRESS], [POSTCODE] (“the property”) by [NAME] notice dated 18 March 2024.

2

By section 79(1) of the Commonhold and Leasehold Reform Act 2002 (“the CLRA”) the “relevant date” is the date of the claim notice. The claim notice was dated 15 December 2023 and is found at pages 34-37 (“the claim notice”).

3

The Tribunal issued directions on 26 September 2024 (“the Directions”). In the Directions, the Tribunal indicated this [NAME] was likely to be suitable for determination on the papers alone without an oral hearing in accordance with rule 31 of the Tribunal Procedure Rules 2013. The Tribunal has not received any objection to a determination of the claim on the papers.

4

The hearing bundle for determination of this [NAME] consists of 105 numbered pages. References to page numbers are to that bundle unless stated otherwise.

5

The Respondents’ objections to the claim setting out each aspect of its case were required by the Directions to be sent to the Applicant together with relevant documents and witness statements by 17th October 2024.

The parties

6

The Applicant is a management company established for the purpose of managing the property (“[COMPANY]”).

7

The [RESPONDENT] (“[NAME]”), is a company that according to its Statement of Case (paragraph 7) at pages 51-52 purchased the freehold to the property in March 2023. [NAME]’s position is, it is not a [NAME] of the freehold and it is at most, an entity which claims the right to be [NAME] as [NAME] of the freehold.

8

The [NAME] Respondent, 10 [RESPONDENT] (formerly known as [RESPONDENT] company number 9428279) was struck off from the [NAME] on 19 September 2023 and was dissolved on 26 September 2023: see the copy of the Final Gazette Notice at page 88. This means that any property of this company became bona vacantia on dissolution and vested in the [NAME] subject to restoration

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of the company to the register: section 1012 of the Companies Act 2006

(as amended).

9

The Tribunal has not been shown evidence that the [NAME] (whether by the Treasury Solicitor or otherwise) authorised any objections or counter notice on behalf of 10 [COMPANY]. No evidence of authority or explanation for this has been provided by either Respondent. Accordingly the Tribunal does not consider the purported counter notices dated 22 January 2024 sent by [COMPANY] or by [NAME] (it is not clear which), as “duly authorised agent of 10 [COMPANY]”, and as “duly authorised agent of [COMPANY] (at pages 41-45) were valid or duly authorised objections on behalf of that company.

10

The [NAME] Respondent has not filed any Respondents’ objections to the claim as the Directions required, ratified or adopted the two purported counter notices dated 22 January 2024. The Tribunal does not treat those documents as counter notices under section 84 of the CLRA. To all intents and purposes any objections which the [NAME] Respondent could have asserted were advanced by [NAME] or its agent [COMPANY].

The issues

11

These are described in a document entitled “Respondent’s Statement of Case” dated 17th October 2024 at pages 51 to 52. This was supported by a Statement of Truth signed by an [NAME] on behalf of [RESPONDENT] (“[NAME]”). The Respondent’s Statement of Case does not clarify which Respondent, it was served on behalf of. The Tribunal proceeds on the basis that the Statement of Case was served on behalf of [NAME] and not on behalf of any other entity. [NAME] have described themselves as agents for [NAME] in a Counter notice of 19 January 2024 at pages 39-40. [NAME] have not described themselves as an agent for any other entity.

Objection number 1

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[NAME] alleges that the claim notice was not served upon 10 [RESPONDENT] which at the date of the service was the landlord of the property [NAME] at the Land Registry and this did not comply with section 79(1) of CLRA. This is the effect of paragraphs 5-8 at page 51.

Objection number 2

13

[NAME] alleges that the notices inviting participation did not accurately state the name of the landlord as sections 78(2)(d) and section 78(3) of the CLRA required. Reference is made to paragraph 4 of a Notice of Invitation to participate (“NIP”) dated 22 October 2023 at page 67 as follows:

“4. The names of the landlord and of the person (if any) who is party to a lease of the whole or any part of the premises otherwise than as landlord or tenant are EAGERSTATES LMITED of 5 [ADDRESS], [POSTCODE].”

4

[NAME] asserts [RESPONDENT] is the managing agent instructed by the landlord [NAME], so that this part of the NIP was incorrect in paragraph 11 on page 52.

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[NAME] contends “as 10 [COMPANY] remains to be the [NAME] freeholder (sic). The notice inviting participating fails to list 10 [RESPONDENT] as the landlord of the premises.” (sic) and “As such, the Respondent will contend that the notice inviting participation omitted details for either the equitable or legal landlord at paragraph 4 of the Notice Inviting Participation.”

15

The Applicant responded to each objection in a “Statement of Reply” on 29 October 2024 at pages 71 to 73. Among other things the Applicant referred to a service charge demand of 5th June 2023 addressed to Mr [APPELLANT] and Ms [APPELLANT] who together were a qualifying tenant of Flat 9 at the property at pages 90 to 92. This demand contained, what was described as a notice under sections 47 and 48 to the Landlord and Tenant Act 1987 (“the 1987 Act”). This notified the lessees that the landlord was [RESPONDENT] at 5 [ADDRESS] [POSTCODE] care of [COMPANY] PO Box 1369, London NW11 7 EH.

16

It is not disputed that the Applicant is an [COMPANY] which complies with the provisions of sections 74, 75, 76 and 79(5) of the CLRA. The Tribunal so finds.

Relevant background

17

The claim notice is addressed to [NAME] at 5 [ADDRESS] [POSTCODE] and care of [COMPANY] at 5 [ADDRESS] [POSTCODE] and PO Box 1369 London [POSTCODE].

18

An official copy of the land register of title SY 419374 as at 9th of October 2024 is found in the bundle at pages 59 – 65. The land and estate comprised in that title is described as freehold land being 8 – 10, [ADDRESS], Leatherhead KT22 HPZ. This is the address of the property given in the claim notice which is found at pages 34 to 36. No title plans are in evidence.

19

A copy of transfer (a [NAME]) dated 29 March 2023 shows the transferor as 10 [COMPANY] (company no 09428279). The [NAME] referred to titles numbered SY419374 and SY845642 and is exhibited to this Respondent’s statement of case at pages 54-57. There is no evidence or explanation what title number SY845642 refers to.

20

Signatures on behalf of [NAME] are omitted from the copy of the [NAME] at pages 56-57. The margin notes for panel 12 on page 56 of the [NAME] include the following instruction “The transferor must execute this transfer as a deed using the space opposite. If there is more than one transferor, all must execute. Forms of execution are given in Schedule 9 to the Land Registration Rules 2003. If the transfer contains transferee’s covenants or declarations or contains an [NAME] by the transferee (such as a restriction) it must also be executed by the transferee.” Panel 11 of the [NAME] included covenants by [NAME], meaning it had to execute the deeds as transferee.

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21

Panel 8 of the [NAME] recites that the transferor (10 [COMPANY]) has received from [NAME] £35,000 for the property.

22

[NAME] has been represented by [NAME]. [NAME] are very experienced in disputes relating to the right to manage under the CLRA. [NAME] featured as solicitors to the freeholder in the [ADDRESS] decision in the Court of Appeal at [2018] QB 571. [NAME] are also experienced participants in RTM disputes. Both would have been aware that the [NAME] exhibited at pages 54 - 57 did not contain the signatures on behalf of [NAME] and was not duly executed. It would have been clear to both that the absence of evidence of due execution of the [NAME] as a Deed and the delay in registration from March 2023, would bring into question the nature of the transaction and the reason for the delay in registration. A similar question about delay in registration of [NAME]’s title and its failure to provide a duly executed copy of a [NAME] or explanation in the context of an [COMPANY] arose in LON/00AG/LCP/2022/0011 ([COMPANY] v 159-167 [COMPANY]) issued on 11th January 2023. That decision was the subject of a Court of Appeal decision delivered on 13th December 2024 at [2024] EWCA Civ 1544. [NAME] acted for [NAME] in those proceedings.

23

The absence of a duly executed [NAME] means the Land Registry would be unlikely to register that transaction, without further evidence or explanation. The only information about this is found in paragraph 7 of [NAME]’s statement of case at page 51 where it was said “that registration of the transfer was not completed”. No correspondence with the land registry is exhibited. No explanation is given for the omission to provide an executed copy of the [NAME] or the delay in registration. No copy of the date of the [NAME] of registration is given.

24

The significance of this is as follows. [NAME] in effect invites the Tribunal to treat the official copy of the land register as conclusive evidence of the [NAME] of the property at the date of the claim notice on 15th December 2023. The transfer of the freehold of the property to [NAME] does not operate in law until it is [NAME] by virtue of section 27(1) of the Land Registration Act 2002 (“the 2002 Act”). A transfer is a disposition that must be completed by registration (section 27(2) of the 2002 Act). During the ‘registration gap’ (the period between completion and registration) [NAME] only has equitable rights as against the transferor formerly 10 [COMPANY], and now the [NAME].

25

The Tribunal is unable to draw the inference that the official copy of the register is conclusive of the identity of [NAME] of the property as at the date of the claim notice on 15th December 2023. The unusual features described above, the incomplete information about the transfer and the registration of the [NAME] all suggest that the circumstances surrounding this transaction and its registration have not been fully explained to the Tribunal or to the Applicant. The payment of £35,000.00 by [NAME] to 10 [APPELLANT] and the service of a notice under sections 47 and 48 of the 1987 Act describing [NAME] as landlord in June 2023 give rise to the inference that [NAME] might become a legal owner with priority over the title of the transferor or the [NAME] as at 15th December 2023, when

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registration is completed

.

26

One possibility is that an [NAME] to register the transfer has been made to the Land Registry but has not being finally determined. This might mean that when the [NAME] to register the [NAME] has been determined, [NAME] will be found to have been the [NAME] of the freehold as from the date of that priority search [NAME] - see section 74(b) of the CLRA. This might explain why [NAME] thought itself entitled to serve a notice under sections 47 and 48 of the 1987 Act as it considered itself as a transferee entitled to be [NAME] as the [NAME] under section 24 of the 2002 Act.

27

The available evidence does not enable the Tribunal to reach any concluded findings about the reasons why the [NAME] has not been [NAME] at this stage, and the Tribunal does not do so.

The identity of the relevant landlord at the relevant date

28

The relevant parts of section 79(6) of the CLRA provide:

“The claim notice must be given to each person who on the relevant date is—

(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, ”

Conclusion objection number 1

29

For the reasons given above the Tribunal is unable to accept the assertion that 10 [COMPANY] should be treated as the [NAME] of the freehold of the property at the date of the claim notice on 15th December 2023. [NAME] has failed to discharge the evidential burden of showing that the copy of the land register is conclusive evidence of the [NAME] of that interest at that date in the unusual circumstances, particularly when a similar delays in registration in [NAME]’s transactions have been the subject of concern.

30

If [NAME] is correct in its assertion that 10 [RESPONDENT] is the landlord that should have been served with the claim notice, or the [NAME] who may have taken its property as bona vacantia, [NAME] does not have standing to raise the objection. That objection can only be taken by 10 [COMPANY] or the [NAME]: see [COMPANY] (Sunderland) [COMPANY] v [NAME] Co [COMPANY] [2024] 3 W.L.R. 601 at 626-627 (“A1 Properties”).

31

In any event no substantive objection to the exercise of the right to manage by the Applicant has been identified which 10 [APPELLANT] could have asserted so the [NAME] does not fail for that reason as well: [COMPANY]” - see [2024] 3 W.L.R. 601 at 627. On [NAME]’s case, it is an equitable owner of the freehold entitled to

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registration as [NAME] of the freehold.

and would have been expected to advance any objection to the entitlement or qualifying conditions for the Applicant to exercise the right to manage. It has not done so.

Objection number 2 analysis

32

A notice of invitation to participate (“NIP”) must satisfy a number of formal requirements identified in section 78 of the CLRA and Right to Manage (Prescribed Particulars and Forms) (England) Regulations 2010 (SI 2010/85) (as amended) (“the 2010 Regulations”).

33

Section 78(7) of the CLRA provides “ 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.”

34

The material parts of Regulation 3 provide:

3.— Additional content of notice of invitation to participate

(1) A notice of invitation to participate shall contain, in addition to the statements and information referred to in section 78(2)(a) to (c) of the 2002 Act (notice inviting participation), the particulars mentioned in paragraph (2).

(2) The particulars referred to in paragraph (1) are—

………………………….

(b) the names of the landlord and any third party;”

35

[NAME] alleges paragraph 4 of the NIP at page 67 incorrectly “lists” the landlord as [RESPONDENT]. That paragraph reads:

4. The names of the landlord and of the person (if any) who is party to a lease of the whole or any part of the premises otherwise than as landlord or tenant are EAGERSTATES LMITED of 5 [ADDRESS], [POSTCODE].

36

The reference to [RESPONDENT] as the landlord or other person who is a party to the Lease is an error in the particulars which does not invalidate the claim notice by virtue of section 78(7) of the CLRA.

37

[COMPANY] v 13-24 [COMPANY] [2013] UKUT 603 concerned an NIP which incorrectly gave details of the previous landlord and consequently failed to comply with the requirements of section 78(2)(d) of the CLRA. The Upper Tribunal held that the notice of invitation to participate was invalid. HH Judge Huskinson reasoned at [13]:

“… a distinction must be drawn between a failure to provide the required particulars and an inaccuracy in the statement of the particulars, see the analysis of the Upper Tribunal (George Bartlett QC, President) in [COMPANY] v 14 [COMPANY] [2012] UKUT 262 (LC) agreeing and adopting the approach of this

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Tribunal (Her Honour Judge Walden-Smith) in [NAME] v [ADDRESS] [2011] UKUT 379 (LC). In my judgment a failure to give the name of the landlord (or to give an entirely incorrect name for the landlord) constitutes a failure to provide the required particulars rather than an inaccuracy in the statement of the particulars. Accordingly I conclude that the [NIP] was not saved by section 78(7) from being invalid.”

38

That finding was reached in the context of the NIP giving the name of an earlier landlord rather than the correct landlord. The Tribunal does not read that decision as requiring this Tribunal to ignore the fact that the notice under sections 47 and 48 of the 1987 Act given in the service charge demand of June 2023 contained no less than 2 references to [COMPANY]. The reference in the NIP to [COMPANY] was an inaccuracy where there was an attempt to provide the particulars required.

39

The test for “inaccuracy” formulated by the Court of Appeal in [NAME] v [NAME] of [NAME] [1985] 2 E.G.L.R. 151. in the context of the Leasehold Reform Act 1967 is of assistance:

“Looking at the facts as they were and what was stated in the notice, can this fairly be said to be an inaccuracy, or is it simply a notice which does not on a fair view relate to the facts? Where we draw the line I do not know, and doubt that it is in anybody’s interests that I should attempt to draw that line. Many cases will answer the question themselves on their own facts.”

40

If contrary to the determination of the Tribunal above, [NAME] has shown that 10 [RESPONDENT] was the landlord at the date of the NIP, that was an error in the particulars which does not invalidate the claim notice by virtue of section 78(7) of the CLRA.

41

Separately for the reasons given below, the approach of the Upper Tribunal in 13-24 [COMPANY] decision has now been overtaken by the guidance given in [COMPANY].

Conclusion objection 2

42

The reference to [COMPANY] and the failure to refer to 10 [RESPONDENT] as the landlord in the NIP were inaccuracies which did not invalidate the claim notice by virtue of section 78(7) of the CLRA.

43

The reference to [COMPANY] and the failure to refer to 10 [RESPONDENT] as the landlord in the NIP were at most breaches of section 78 of the CLRA and the 2010 Regulations which by themselves were not fatal to the validity of the [NAME] by analogy with [COMPANY] [2024] 3 W.L.R. 601 at 625 -666 paragraph [85].

44

No substantive objection to the exercise of the right to manage by the Applicant has been identified which 10 [APPELLANT] could have asserted. The [NAME] does not fail for that reason as well: [COMPANY]” - see [2024] 3 W.L.R. 601 at 627. On [NAME]’s case, it is an equitable owner entitled to registration as [NAME] of the freehold. [NAME] would have been expected to advance any objection to the

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entitlement or qualifying conditions for the Applicant to exercise the

right to manage. It has not done so.

The legal effect of the errors alleged by [NAME]

45

This part of the Tribunal’s reasons, proceeds on the basis that [NAME] is correct to contend that at the date of the claim notice the landlord for the purpose of the section 79(6) of the CLRA was 10 [COMPANY] or the [NAME], so that the claim notice was not served on the landlord as section 79(6) of the CLRA requires.

46

This objection could only be taken by 10 [COMPANY] or the [NAME]: [COMPANY] [2024] 3 W.L.R. 601 at 626 -628 paragraph [87-92].

47

For either objection to succeed a substantive objection to the exercise of the right to manage scheme by the Applicant must be identified which 10 [APPELLANT] (or the [NAME]) could have asserted: [COMPANY]” - see [2024] 3 W.L.R. 601 at 627, paragraph [91]. None has been asserted by or on behalf of [NAME], which appears to be the stakeholder with the primary financial interest in drawing attention to such an objection. Accordingly if the breaches of section 78 and 79 of the CLRA alleged by [NAME] are made out, they do not have the effect of invalidating the [NAME] made by the Applicant.

H Lederman Tribunal Judge

30 December 2024

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RIGHTS OF APPEAL 1. 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 [NAME] which has been dealing with the case.

2. The [NAME] for permission to appeal must arrive at the [NAME] within 28 days after the Tribunal sends written reasons for the decision to the [NAME].

3. 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 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.

4. 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.