[2024] UKUT 335 (LC)

The FTT found that Ms O’Connor was a qualifying tenant, on the basis that section 112(2) of the 2002 Act defines “lease” as including an agreement for a lease; the FTT said:

“32.

… As a lease which has been completed but not yet registered takes effect as an agreement for lease (or an ‘equitable lease’) it follows that a “qualifying tenant” for the purposes of the right to manage legislation can include the holder of a completed but as yet unregistered lease.”

The respondent was represented before the FTT by Mr Joiner. At the time, Mr Joiner was the sole director of RTMF Services Ltd, the company secretary of the respondent; he explained that when the notices of invitation to participate were served the respondent was unaware of the existence of the lease of flat 17. For the freeholder it was argued that the appellant was on notice of the lease because of the note of a pending application against the freehold title. The FTT agreed with the appellant that it was not expected to investigate such entries: “Parliament cannot have intended the RTM process to be so difficult that if there are pending applications against the freehold title the RTM company must investigate each and every application”.

The FTT acknowledged that in the Tribunal’s decision in Avon Ground Rents Limited v Canary Gateway (Block A) RTM Company Limited [2020] UKUT 358 (LC)(discussed at paragraph 87 below) the Chamber President, Fancourt J, held that the failure to serve a qualifying tenant invalidated the claim notice. He said, at his paragraph 87, that it is “very easy for the RTM company to serve every qualifying tenant and to identify them. Since, in virtually all cases, the qualifying tenants will be long lessees, their interests will be identifiable at the Land Registry.” That, said the FTT, “does not fit the facts of the present case”.

Accordingly it found that:

“37 … we do not accept that a failure by a RTM company to give a NIP to a tenant whose lease is not registered will invalidate the claim notice if the RTM company has no actual knowledge of the existence of the lease and where the only way in which it would know about the leases – in the absence of having been informed about the existence of the lease – is by following up a note on the freehold title about pending applications. Therefore, on the basis of the facts before us, the failure to give NIP to the tenant of flat 17 Cresta Court did not invalidate the notice.”