Supreme Court clarifies Right to Manage rules for leaseholders

The Supreme Court has clarified important Right to Manage rules for leaseholders. It ruled that landlords cannot rely on certain failures relating to the notice inviting participation to defeat an otherwise qualifying claim.

The unanimous judgment, handed down on 27 August 2026, concerned an RTM company set up by leaseholders at Cresta Court in London. It is the Supreme Court’s second significant decision in just over two years considering procedural requirements under the statutory Right to Manage process.

The Supreme Court described the latest case as the “second chapter” in its consideration of when landlords or existing management companies can object to an RTM claim because procedural safeguards intended for other people have not been followed.

Before making an RTM claim, an RTM company must give a notice inviting participation, known as a NIP, to every qualifying tenant who is not already, and has not agreed to become, a member of the company.

The RTM company must also wait at least 14 days after giving the required NIPs before giving its claim notice.

At Cresta Court, the RTM company did not give a NIP to one qualifying leaseholder who should have received one. The leaseholder subsequently joined the RTM company and supported its right to manage claim.

The freeholder, Avon Freeholds Limited, argued that this failure, and the related failure to comply with the 14-day requirement, meant that the RTM claim could not succeed.

The First-tier Tribunal and Upper Tribunal upheld the RTM company’s claim. The Court of Appeal reached a different conclusion and held that the failure meant the claim notice was invalid.

The RTM company appealed to the Supreme Court.

The Supreme Court unanimously allowed the RTM company’s appeal and restored the decision of the Upper Tribunal.

The Court held that the requirements in sections 78(1) and 79(2) of the Commonhold and Leasehold Reform Act 2002 are procedural requirements and do not form part of what Lord Briggs called the “entitlement conditions” which determine whether an RTM company is entitled to acquire the right to manage.

The Court said that non-compliance with sections 78(1) and 79(2) cannot therefore be used by a landlord as the basis of an objection in a counter-notice to the RTM company’s entitlement to acquire the right to manage.

The Supreme Court noted that the failures in this case had caused no prejudice to the landlord, the affected leaseholder or anyone else.

The Court also emphasised the purpose of the RTM legislation. Lord Briggs said:
“The procedural requirements have not been included to create traps for the unwary, nor to afford unwarranted opportunities for obstruction on the part of objecting landlords who have not themselves been significantly affected by any particular omission to comply with them.”

No.

RTM companies should continue to follow all the requirements of the statutory process carefully.

The Supreme Court’s decision does not remove the requirement to give notices of invitation to participate or to observe the 14-day period. It also does not remove any of the substantive qualifying conditions that an RTM company must meet to acquire the right to manage.

The Court explained that there is a separate way of enforcing procedural requirements. Under section 107 of the 2002 Act, an interested person can apply to the First-tier Tribunal for an order requiring someone to correct a failure to comply with the RTM legislation.

The Supreme Court gave the example of an RTM company deliberately deciding not to give any NIPs. In those circumstances, the Tribunal could potentially order the company to give the required notices and, depending on the circumstances, to start the claim process again.

The judgment provides important clarification for leaseholders who want to exercise the right to manage. In particular, a landlord cannot defeat an RTM claim through a counter-notice simply because the RTM company failed to give a qualifying tenant a NIP under section 78(1), or failed to comply with the related timing requirement in section 79(2), where the company otherwise meets the substantive conditions for entitlement.

This reduces the scope for the particular procedural errors considered by the Supreme Court to prevent an otherwise qualifying RTM claim from proceeding.

However, the judgment should not be taken to mean that every procedural mistake in an RTM claim will be irrelevant. Leaseholders and RTM companies should still take care to follow the statutory procedure and should seek advice if there is a dispute about an existing claim.

Matthew Pennycook, Minister of State for Housing and Planning, welcomed the decision. He said:

“The Cresta Court Supreme Court judgment is hugely welcome. It provides clarity that procedural defects do not automatically invalidate Right to Manage claims – significantly reducing the scope for obstructive landlords to block valid RTM applications.”

Nicholas Kissen, senior legal manager at LEASE, said:
“This is a positive and important decision for leaseholders who want to exercise the right to manage. It provides greater clarity and reduces the risk of an otherwise valid claim being defeated because of the particular procedural errors considered in this case.
“Leaseholders and RTM companies should still take care to follow all the requirements of the statutory process. But the Supreme Court has made clear that the right to manage procedure should not create unnecessary barriers where the qualifying conditions for acquiring the right have been met.”