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ELIM COURT RTM CO LTD v. AVON FREEHOLDERS LTD [2017] EWCA Civ 89: Failure To Comply With RTM Statutory Notice Procedure

Yet another case involving Right to Manage. As many of you will know the idea behind the Right to Manage provisions was that they were meant to be a straightforward method to allow leaseholder to acquire the management of their block. Sadly over recent years there have been numerous decisions dealing with the very technical nature of the provisions contained within the Commonhold and Leasehold Reform Act 2002 governing these rights. Many of these decisions up until this point have favoured a strict interpretation of the rules and requirements typically favouring landlords.

Court of Appeal

In this case the Court of Appeal considered whether a failure to comply strictly with the statutory notice procedure was fatal. The Leasehold Valuation Tribunal (as it then was) determined failure to comply strictly with the statutory process meant the leaseholders via the RTM Company were not entitled to acquire the right to manage. This was upheld on appeal at the Upper Tribunal but the leaseholders then appealed to the Court of Appeal.

Two arguments were raised. Firstly that the Invitation to Participate did not offer inspection of the articles of association on at least one day at the weekend. The second point was that the notice was not properly signed by a person with appropriate authority.

As to the first point the Court of Appeal agreed that the notice did not comply with the strict statutory requirements. On the Signature issue the Court of Appeal was satisfied that the person who signed was properly authorised. The Court went on however to conclude that in this instance the failure it had determined (re the opportunity to inspect at a weekend) did not invalidate the notice. Likewise if it was wrong on the signature point in this case as again it did not invalidate the notice.

Decision

As a result Elim Court RTM Co Ltd id acquire the right to manage. What this case does however highlight is how technical this area of law is and the way many landlords will look to challenge every point. As a result it is vital care is taken with dealing with all such applications as there are costs consequences for the unwary or poorly advised.

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