RTM Company Granted Right to Manage Premises

OUTCOME: Allowed

FIRST-TIER TRIBUNAL

PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case reference

HMCTS Code : CAM/00KA/LRM/2024/0602

P: PAPER REMOTE

Property : [ADDRESS] [POSTCODE]

Applicant :

[redacted]

Respondent: [redacted]

2.[RESPONDENT] : [COMPANY] (for [COMPANY])

Type of application : Application in relation to the denial of the Right to Manage (Commonhold and Leasehold Reform Act 2002)

Tribunal member(s) : Judge Wayte

Date : 8 July 2025

DECISION

(1) The tribunal determines that [COMPANY] were not entitled to serve a counter notice due to the failure to register their title at the time of service of the claim notice.

(2) The tribunal further determines that [NAME] were not the “duly authorised agents” of the [NAME] when purporting to serve a counter notice on their behalf and therefore their counter notice is invalid.

(3) In the absence of any valid counter notice, there is no dispute and the RTM takes effect under the 2002 Act as at 22 September 2024 (the acquisition date in the claim notice).

(4) In the absence of a dispute, the tribunal has no jurisdiction (or need) to make a determination on the RTM.

(5) The tribunal orders the second respondent to pay the applicant £110 in respect of their tribunal fees.

Background

1. This application was made under section 84(3) of the Commonhold and Leasehold Reform Act 2002 ("the Act") for a determination that, on the relevant date, the applicant [COMPANY] was entitled to acquire the Right to Manage premises known as [ADDRESS], [ADDRESS], Luton Lu1 3UD (“the premises”).

2. The freehold of the premises was owned by [NAME] [NAME] until they entered into a contract to sell it to [COMPANY] on 20 June 2023. The sale was completed on 8 November 2023 but, as at the date of service of the claim notices, the registered proprietors remained [NAME] [NAME]. It is not clear whether, if at all, the title has now been registered in [NAME]’s name.

3. By a claim notice dated 4 May 2024, the applicant gave notice that it intended to acquire the Right to Manage the premises on [NAME] [COMPANY], with copies to [NAME]’s solicitors [NAME] and their managing agents [COMPANY].

4. Two counter notices were sent on 21 June 2024. The first was from [NAME] solicitors, on behalf of [COMPANY] and the second was signed by [NAME] [NAME] of [RESPONDENT] as the “duly authorised agent of [RESPONDENT] [NAME] and [NAME] [RESPONDENT] [NAME]”. The objecti0ns were identical, alleging that the applicant had failed to establish compliance with sections 72(6), 79(6) and 78(2) of the Act.

5. The application included a statement and further particulars setting out the applicant’s response to the counternotices. The allegations of failure to comply were all refuted but the primary objection was that [COMPANY] had no standing due to their failure to register the transfer by the time the claim notices were served. The applicant also challenged the assertion that Mr [APPELLANT] was a duly authorised agent of [NAME] [NAME].

6. The tribunal wrote to [NAME] [NAME] Solicitors and [NAME] on 18 March 2025. The [NAME] were asked to confirm whether they had in fact authorised [NAME] as their agents and, if so, whether they wished to pursue the counter notice served on their behalf. No response has been received to that letter. [NAME] were asked whether they confirmed the counter notice served by them was withdrawn in the light of 159-167 Prince of [ADDRESS] Co v [NAME] [COMPANY] [2024] EWCA Civ 1544, which held that [NAME] [COMPANY] were not the “landlord” at the date of the claim notice as they did not hold a legal interest in the property, due to lack of registration of their purchase. [COUNSEL] replied that they were not instructed by [COMPANY], who were being represented by [COMPANY], their managing agents.

7. [NAME] replied with a witness statement signed by Mr [NAME], alleging that [COMPANY] were in fact authorised to act in relation to all matters relating to the property, attaching a copy of the contract and transfer for sale of the freehold. Alternatively, he argued that their relationship as agents for the [NAME] could be implied from the documents. On 31 March 2025 an application was made for an additional 10 days “to provide a comprehensive response”.

8. In the absence of any further information, on 15 April 2025 the tribunal issued directions for the determination of the application.

9. The respondents were to provide their response to the application by 8 May 2025. On 15 May 2025, the applicant made an application to debar both respondents for failure to comply with those directions. On 19 May 2025 and before that application could be considered by the tribunal, a Statement in Reply on behalf of [COMPANY] was received by the tribunal, allegedly in compliance with the directions. On 19 May 2025 the applicant sent their response and on 28 May 2025 the bundle for the determination.

10. For completeness, on 24 June 2025 the tribunal wrote to the parties to indicate that should it determine that neither counternotice was valid, there can be “no dispute about entitlement” and by section 90 of the 2002 Act the acquisition date would be the date specified in the claim notice, 22 September 2024. However, the jurisdiction of this tribunal under section 84 of the 2002 Act depends on the service of one or more counter notices objecting to the RTM. In the circumstances and under rule 9 of the 2013 Rules, if the tribunal determines that neither counternotice was valid, the tribunal must strike out the proceedings but before so doing, both parties are entitled to an opportunity to make representations and were given until 4 July 2025 to do so.

11. Representations were received from the applicants on 1 July 2025. No response at all was received from or on behalf of [APPELLANT].

The Applicant’s case

12. The application included a detailed history, a photograph of the exterior of the premises, the [COMPANY] register of members, copies of all relevant notices and proof of their delivery.

13. The property is a purpose-built block of 12 self-contained apartments, all sold on long leases. The photograph provided further proof that the use of the building is residential.

14. 10 of the flats were members of the [COMPANY] on formation. Notices of Invitation to participate were therefore served on the qualifying leaseholders of the remaining flats 1 and 7 on 18 March 2024. On 29 April 2024 the leaseholder of Flat 7 ([COMPANY]) applied to be and was admitted as a member of the [COMPANY]. No response was received from Flat 1, the leaseholder is Luton Borough Council but a notice to participate was also served on [NAME].[APPELLANT] and a separate associated company.

15. The applicant was aware that the freehold had been sold to [APPELLANT] in or about November 2023 but a search of the Land Register in May 2024 showed that the transfer had not been registered. In those circumstances, on 8 May 2024, the Notice of Claim was served on the registered proprietors [RESPONDENT] and [NAME] but also [RESPONDENT] and their managing agents [COMPANY], on the basis that it was understood they had bought the freehold but registration was still pending. The notice provided for a response by 21 June 2024 and stated the intended date of acquisition as 22 September 2024.

16. On 13 May 2024, [NAME] solicitors, solicitors for [NAME], wrote to request all documentation supporting the application, which was provided but with a caveat expressed by the applicant’s representatives that they were not entitled to that information given the failure to register the transfer.

17. On 21 June 2024 two counter notices were served: one from [NAME] and the other from [NAME]. The notices were in identical terms and both claimed to be signed by duly authorised agents: [RESPONDENT] for [NAME] and [NAME] for [RESPONDENT] and [NAME]. Nothing was received from [NAME] [NAME] directly. Three grounds were raised for objection: that the premises did not qualify due to the non-residential proportion of the building (section 72(6)); an alleged failure to serve the claim notice on each person required to be served by section 79(6) and that the notice to participate did not contain the particulars prescribed by regulations in accordance with section 78(2). No further particulars of the objections have been provided to date.

18. In response to the objections, the application relied on the evidence provided to show that the property had no non-residential parts, the claim notice was served on all relevant parties, including the leaseholders and that the notice to participate did comply with the 2002 Act.

19. In any event, the application submitted that neither counter-notice was valid. [COMPANY] had no standing to serve a notice as they only held an equitable interest in the property prior to registration of their title, as established in the Prince of [ADDRESS] case, above. As to the claim that Mr [COUNSEL] was a “duly authorised” agent for [NAME] [COUNSEL], the applicant had written to [RESPONDENT] [NAME] to ask them whether he had been specifically authorised to serve a counter notice on their behalf and on 19 July 2024 “[NAME]” from the accounts department emailed back stating “No, they have not authorised Mr [NAME] to act on their behalf.”

20. The application also enclosed several FTT RTM decisions involving [COMPANY], where similar objections to the RTM had been found to be invalid and two cases where similar claims from Mr [COUNSEL] that he was appointed as an agent for the registered proprietors had been found to be untrue.

21. In those circumstances the applicant requested a determination that it had acquired the right to manage on 22 September 2024. An application was also made for the reimbursement of tribunal fees from [NAME].

22. The further representations were in effect a repeat of the applicant’s case as set out above, including reference to several other similar FTT decisions where a relationship of agency had been asserted by [COMPANY] but refuted by the alleged principal or found to be unproven by the tribunal.

[NAME]’s case

23. On 31 March 2025, Mr [NAME] provided a witness statement, signed with a statement of truth. Rather that clarifying his personal position as an alleged agent for the [NAME], he appeared to be arguing that [COMPANY] were their agents as “At all material times since November 2023 [NAME] [NAME] has (sic) left the entire control and management of the Property to [COMPANY]”. In particular, he referred to the exercise of the management functions under the lease and enclosed a copy of the contract which expressly recorded that management would pass to [COMPANY] from 20 June 2023 to completion. “Management” was defined in the contract as “the day to day running of the Property in collecting the ground rents, service charge, insurance rent and all other sums lawfully due from the Occupational Tenants as set out in the Occupational Leases.”

24. As an alternative to general agency based on conduct, Mr [NAME] argued that it was an implied term of the contract that [COMPANY] should act as a general agent for [NAME] [COUNSEL] in relation to all matters related to the Property including the receipt and service of notices under the 2002 Act. Mr [NAME] has not responded to the email from “[NAME]” referred to in paragraph 19 above.

25. In addition to that witness statement, a Statement in Reply on behalf of [COMPANY] was received on 19 May 2025.

26. The statement claimed that [COMPANY] had standing to serve a counter-notice as the “de facto” landlord. Two authorities were quoted: Curzon v Wolstenholme [2015] UKUT 82 (LC), which was said to allow “for the entitled party to act as a landlord” and [COMPANY] v Abdel-Mahmoud [2018] EWCA Civ 1102 which was said to confirm that “management functions suffice”.

27. The Curzon case concerned a different statute (the Leasehold Reform and Urban Development Act 1993) and the status of an initial notice by participating tenants to buy the freehold. The 1993 Act enables that notice to be protected by an entry on the Land Register. In this case there had been no registration and the freeholder sought to defeat the claim by transferring the freehold to his wife, before having it transferred back to him. Perhaps unsurprisingly on these facts, the Upper Tribunal upheld the FTT decision that the notice remained effective. However, the UT decision was overturned by the Court of Appeal, reference [2017] EWCA Civ 1098, which held that the notice ceased to have effect on transfer.

28. Similarly, [APPELLANT] concerns a different Act – the Landlord and Tenant Act 1985. The question was whether a management agreement was a Qualifying Long Term Agreement requiring consultation under section 20. That turned on the agreement between the agents and the freeholder, which was found to persist beyond 12 months and therefore require consultation.

29. The statement sought to argue that [COMPANY] had authority from the [NAME] under the contract and therefore their counter-notice was valid. Alternatively, it was alleged that [NAME] acted as their agent in common law, citing Freeman & Lockyer v [COMPANY] ([NAME]) [COMPANY] [1964] 2 QB in support. That case concerns UK company law and deals with whether a company may be bound by the acts of a single director. Diplock LJ noted that in the absence of actual authority, a contract may still be enforced if an agent had authority to enter contracts of a different but similar kind. Reference was also made to a decision of the Bournemouth County Court, however that is not a decision of record and has therefore been disregarded.

30. As to particulars of non-compliance, the statement repeated the assertion of failure to comply but only stated that the premises were not properly defined. It was also alleged that the Applicant had failed to provide evidence supporting eligibility or relevant company documentation. Finally, a claim was made that [NAME] had been bypassed.

31. In the circumstances the tribunal should determine that the Applicant had not acquired the Right to Manage and dismiss the application.

The applicant’s Reply

32. In response, the applicant pointed out that evidence had been provided from [NAME] [NAME] refuting [NAME]’s claim to be acting as their agents. All relevant information was provided to [NAME] back in June 2024 and there is no requirement for plans under the 2002 Act. The Claim Notice gave the proper address of the Property and there has been no dispute about that to date. The applicant stated that “In our opinion, the Statement is entirely baseless, fundamentally flawed and a misguided version of the legislation.”

The tribunal’s decisions and reasons

33. Although the Upper Tribunal has previously acknowledged a respondent’s right to put the applicant to proof, this case is a further example of [NAME] exercising that “right” in an unreasonable manner. The applicant has been put to a great deal of additional cost in refuting arguments as to agency, which the respondent has failed to establish as set out below. In particular, Mr [NAME] claim to be “a duly authorised agent” of [NAME] [NAME] has been refuted by Mr [NAME] company and it would appear that he has since dropped that argument to focus on the alleged status of [NAME] as actual or implied agents.

34. Whereas it is obviously correct that the contract allowed [NAME] to exercise management functions from exchange to completion, that provision hardly provides evidence that [NAME] had authority from the [NAME] to serve a counter notice following completion. In order to have that authority, [NAME] simply needed to register their title, which they failed to do. The “authorities” referred to in the unattributed statement take the argument no further. I should add that several citations were incorrect, appeal decisions were overlooked and the relevance of the cases was questionable.

35. In those circumstances, I determine that neither [NAME] nor Mr [APPELLANT] were entitled to serve a counter notice. The Applicant has demonstrated that they met the requirements of the 2002 Act and in any event, in the absence of a valid counter notice there can be “no dispute about entitlement”. By section 90 of the 2002 Act the acquisition date is the date specified in that notice, 22 September 2024.

36. However, the jurisdiction of this tribunal under section 84 of the 2002 Act depends on the service of one or more counter notices objecting to the RTM. In the circumstances and under rule 9 of the 2013 Rules, the tribunal must strike out the proceedings.

37. [NAME] and their agent Mr [NAME] have failed to establish that they were entitled to serve their counter notices or to provide any explanation for the delay in registering [NAME]’s title. In those circumstances the tribunal considers it is appropriate to exercise the tribunal’s discretion under Rule 13(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 to order them to reimburse the application fee of £110.

Name: Judge Wayte Date: 8 July 2025

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 application for permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case.

The application for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the person making the application.

If the application is not made within the 28-day time limit, such application 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 application for permission to appeal to proceed, despite not being within the time limit.

The application 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 making the application is seeking.

If the tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).