The Supreme Court in Avon Freeholds v Cresta Court E RTM Company considered whether a landlord can resist a right to manage claim because one qualifying tenant was not sent a notice of invitation to participate.
Key facts
- Who: Leaseholders in blocks of flats, right to manage (RTM) companies, landlords and other parties to long leases
- From: Judgment given 27 August 2026
- Source: Avon Freeholds Limited v Cresta Court E RTM Company Limited [2026] UKSC 31
In Avon Freeholds Limited v Cresta Court E RTM Company Limited [2026] UKSC 31, the Supreme Court considered how the right to manage scheme in the Commonhold and Leasehold Reform Act 2002 deals with a procedural failure by an RTM company. Lord Briggs gave the judgment, with which Lord Reed, Lord Stephens, Lady Rose and Lord Snowden agreed. It was heard on 7 July 2026 and is an appeal from the Court of Appeal ([2025] EWCA Civ 1016).
Background
Avon Freeholds is the freeholder of 7–26 Cresta Court, Hanger Lane, London, which includes 20 flats. Cresta Court E RTM Co Ltd was formed by leaseholders to acquire the right to manage. It served its claim notice on 21 January 2022.
Before making a claim, an RTM company must give a notice of invitation to participate (NIP) to each qualifying tenant who is not, and has not agreed to become, a member. Section 79(2) says the claim notice may not be given unless each such person was given a NIP at least 14 days earlier.
One qualifying tenant was not given a NIP. She made no complaint and, shortly after the claim notice was served, decided to join the RTM company. Avon argued that the failure was fatal to the claim.
The question
Whether that failure meant the claim notice was void, so that the RTM company's claim could not succeed, where the tenant herself raised no objection.
Earlier decisions
The First-tier Tribunal and the Upper Tribunal upheld the RTM company's claim. The Court of Appeal accepted Avon's argument that the missing NIP made the claim notice void. Both the Upper Tribunal and the Court of Appeal relied closely on passages in the Supreme Court's earlier decision in A1 Properties (Sunderland) Ltd v Tudor Studios RTM Co Ltd [2024] UKSC 27. There, the existing management company and intermediate landlord objected that the claim notice had not been given to the intermediate landlord. The objection was dismissed mainly because, on the facts, neither objector had suffered any disadvantage from the breach.
How the scheme works
Only those entitled to be given the claim notice itself, such as landlords, may give a counter-notice. Qualifying tenants receive a copy of the claim notice but have no statutory right to object. A counter-notice either admits that the RTM company was entitled to acquire the right to manage or alleges, by reference to a specified provision of Chapter 1 of Part 2 of the Act, that it was not.
The Court said that "so entitled" in section 84(2)(b) means entitlement on the relevant date to acquire the right to manage the premises, a matter of substance rather than procedure. Objections based on the general merits or fairness of a transfer are not entertained.
What this means for leaseholders and landlords
The judgment sets out how the statutory process runs, from NIPs to claim notices, counter-notices and Tribunal applications. Only those entitled to be given the claim notice itself can serve a counter-notice, and an objection that the RTM company was not entitled to acquire the right to manage must rely on a specified provision of Chapter 1 of Part 2 of the 2002 Act, not on the general merits of a transfer. Qualifying tenants have no statutory right to object.
Sources
- Avon Freeholds Limited v Cresta Court E RTM Company Limited [2026] UKSC 31, Supreme Court, 27 August 2026