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By J
18/09/2011

Forms and formalities

Gateway Property Holdings Ltd v 6-10 Montrose Gardens RTM Co Ltd [2011] UKUT 349 (LC) is a rare creature – a decision of the Upper Tribunal (Lands Chamber) on a Right to Manage issue. It also appears to be the UT(LC) debut for HHJ Walden-Smith.

As you’ll know, the Commonhold and Leasehold Reform Act 2002 created a “no fault” right to manage process, whereby qualifying leaseholders of residential buildings could acquire the management of their building via the vehicle of an RTM company. The process starts with the formation of the RTM company (often by a number – but rarely all – of the leaseholders) and then, before giving notice of intention to acquire the right, the other leaseholders must be invited to join the company (s.78, 2002 Act) via a notice to participate. The idea is clear enough; this is to give all leaseholders a chance to take part in the RTM company and not allow a small clique to dominate.

In the present case, a notice of invitation to participate had been given and the RTM company then sought to acquire the RTM. The difficulty was that the current application was the third such attempt, the first two having been withdrawn or deemed withdrawn. The landlord argued that a new participation notice was needed before each claim as the notice of participation was claim specific.

The UT(LC) disagreed. A new invitation to participate was needed only where the nature of the new claim was such that the existing notice to participate had been superseded by factual developments since the giving of the notice to participate (e.g. a change in the identity of those entitled to participate in the RTM company). If there was no such alteration, then there was no need to serve a new notice.

That, however, was not the end of the matter, for the landlord had a second – and more successful argument. Where a RTM company has served notice that it wishes to acquire the RTM, and a landlord has then served a counter-notice denying that right, the RTM company must apply to the LVT for a determination as to whether it can acquire the RTM no later than two months beginning with the day on which the counter-notice was given (s.84, 2002 Act).

The application must comply with the requirements of the LVT procedure regulations and, in particular, those set out in para.4, Sch.2, of those regulations.

In the present case, the counternotice was given on August 3, 2010, and the two month period expired on October 2, 2010. The application form was faxed to the LVT and received on October 1, 2010. It did not contain any of the prescribed information and materials (e.g. the notice, counter-notice, etc). Some, but not all, of the prescribed information was then provided in hard copy on October 4, 2010.

One might have thought that that was the end of the matter. The application had not been properly made within time and, so, the application must fail. However, the LVT procedure regulations (reg.3(8)), contain a saving provision, entitling the LVT to proceed to deal with an improperly constituted application so long as the material provided is sufficient to deal with the application and no prejudice has or will be caused. Pursuant to this provision, the LVT purported to proceed with the application.

The Upper Tribunal held that this was not open to the LVT. The faxed information form contained insufficient information to enable the application to be determined. It just set out the name and address of the parties and their representatives. That was plainly insufficient and, hence, the LVT could not properly have decided to rely on the saving provision.

In order to rely on the saving provision, the application was required to contain sufficient information to enable the LVT to determine:

(a) whether the premises were premises to which the RTM applied;

(b) whether the company was an RTM company;

(c) whether there were sufficient qualifying tenants;

(d) whether the leases were long leases;

(e) whether the tenants had been given notice inviting participation; and,

(f) whether the claim notice had been properly served.

 

J is a barrister. He considers housing law to be the single greatest kind of law known to humankind and finds it very odd that so few people share this view.

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