CA-2024-002828 - [2025] EWCA Civ 1016

The main relevant statutory provisions are set out in the UT Decision at [4] to [13].

A fuller account of the policy background to the statutory regime in the CLRA, and of its key provisions, may be found in A1 Properties at [22] to [45] of the judgment of Lord Briggs and Lord Sales JJSC (with whom Lord Hamblen, Lord Leggatt and Lord Stephens JJSC agreed). As the Supreme Court there explained, the legislation had its origin in a consultation paper issued by the Government in November 1998 in relation to various possible reforms in respect of residential leaseholds. In the light of the responses received the Government formulated its policy and a draft bill to implement it, contained in a further consultation paper published in August 2000 (Commonhold and Leasehold Reform, Draft Bill and Consultation Paper (Cm 4853) (“the Consultation Paper”): see A1 Properties at [23] and [24].

The Consultation Paper described the “overall objective of the proposals” at paragraph 10 of Section 3:

“The main objective is to grant residential long leaseholders of flats the right to take over the management of their building collectively without having either to prove fault on the part of the landlord or to pay any compensation. The procedures should be as simple as possible to reduce the potential for challenge by an obstructive landlord. The allocation of responsibilities should be clear-cut, and the body through which the leaseholders take on management responsibility should enjoy all necessary powers to properly discharge its functions. At the same time, the legitimate interest of the landlord in the property should be properly recognised and safeguarded.”

The Supreme Court observed at [25] that it was “legitimate to have regard to this paragraph as a general statement of the purpose of the CLRA” because it was “functionally equivalent to a government white paper and other types of report proposing draft legislation, which are legitimate guides to the purpose of legislation adopted in the light of them”, citing well-known authority to that effect.

Section 72 of the CLRA defines the premises to which Chapter 1 of Part 2 applies, helpfully summarised in A1 Properties at [27] as

“a self-contained building or part of a building containing two or more flats held by qualifying tenants, where the total number of flats held by such tenants is not less than two-thirds of the total number of flats contained in the premises.”

Section 112 sets out definitions, of which subsections (2) and (3) are important for consideration of the issue whether Ms O’Connor was a qualifying tenant of Flat 17 at the material time:

“(2)

In this Chapter ‘lease’ and ‘tenancy’ have the same meaning and both expressions include (where the context permits) –

(a)

a sub-lease or sub-tenancy, and

(b)

an agreement for a lease or tenancy (or for a sub-lease or sub-tenancy),

but do not include a tenancy at will or sufferance.

(3)

The expressions ‘landlord’ and ‘tenant’, and references to letting, to the grant of a lease or to covenants or the terms of a lease, shall be construed accordingly.”

In relation to the role and membership of an RTM company, it is again convenient to quote the summary in A1 Properties at [29] and [30]:

“29.

Section 73 specifies that a RTM company has to be a private company limited by guarantee whose articles of association state that its objects include the acquisition and exercise of the right to manage the premises. There can only be one RTM company in relation to premises: section 73(4).

30.

The persons entitled to be members of a RTM company are qualifying tenants of flats contained in the premises and, from the date when it acquires the right to manage, landlords under leases of the whole or any part of the premises: section 74(1). The basic rule is that a person is the qualifying tenant of a flat if he or she is tenant of the flat under a long lease: section 75(2). Sections 76 and 77 make detailed provision regarding which leases count as long leases for these purposes. The basic rule is that a lease is a long lease if it is granted for a term exceeding 21 years: section 76(2)(a).”

By virtue of section 75(5), “No flat has more than one qualifying tenant at any one time; and subsections (6) and (7) apply accordingly”. Those subsections then deal, respectively, with cases where a flat is let under two or more long leases, or where it is let to joint tenants under a long lease.

The definition of what is a long lease for the purposes of Chapter 1 in section 76 includes a number of special cases set out in subsection (2)(b) to (f), in addition to the basic rule in section 76(2)(a). The special cases include, for example, shared ownership leases (of any duration) where the tenant’s total share is 100 per cent and leases granted in pursuance of the right to buy conferred by Part 5 of the Housing Act 1985.

Section 79 lays down the procedure for the giving of a claim notice by an RTM company to the landlord and others. In any case where there are more than two qualifying tenants of flats contained in the premises, the membership of the RTM company must on the date when the notice is given (the “relevant date”) include the qualifying tenants of at least one-half of the total number of the flats: section 79(5). The claim notice must be given to “each person who on the relevant date is – (a) landlord under a lease of the whole or any part of the premises, (b) party to such a lease otherwise than as landlord or tenant, or (c) a manager appointed under Part 2 of the Landlord and Tenant Act 1987 … to act in relation to the premises”: section 79(6). Section 79(7) deals with the position where the landlord or other person required to be served under subsection (6) cannot be found or his identity cannot be ascertained. Finally, section 79(8) provides that “A copy of the claim notice must be given to each person who on the relevant date is the qualifying tenant of a flat contained in the premises.”

Section 80 sets out the information that the claim notice must contain, including the following:

“(2)

It must specify the premises and contain a statement of the grounds on which it is claimed that they are premises to which this Chapter applies.

(3)

It must state the full name of each person who is both - (a) the qualifying tenant of a flat contained in the premises, and (b) a member of the RTM company, and the address of his flat.

…

(6)

It must specify a date, not earlier than one month after the relevant date, by which each person who was given the notice under section 79(6) may respond to it by giving a counter-notice under section 84.

(7)

It must specify a date, at least three months after that specified under subsection (6), on which the RTM company intends to acquire the right to manage the premises.

…”

As the UT explained in [12] and [13]:

“12.

Section 84 makes provision for any of the recipients of a claim notice set out in section 79(6) to challenge it by serving a counter-notice, and in that event the notice is deemed withdrawn unless within a prescribed time-limit the RTM company makes an application to the FTT for a determination that it was on the relevant date entitled to acquire the right to manage (sections 84 and 85). Not all recipients of the claim notice can serve a counter-notice; a tenant, who is entitled to a copy of the claim notice under section 79(8), cannot do so.

13.

Where there is no objection to the claim notice, either because no counter-notice is given or because the counter-notice admits that the RTM company is entitled to acquire the right to manage, then the right is acquired on the date specified in the claim notice.”