A1 STUDIOS (SUNDERLAND) LTD v TUDOR STUDIOS RTMF COMPANY LTD [2024] UKSC 27
RTMF welcomes this decision on behalf of its leasehold clients at Tudor Studios, a student block in Leicester.
Parliament intended the Right to Manage (RTM) to be a non-adversarial process but time and time again obstructive landlords have been able to exploit minor and often inconsequential defects to obstruct genuine RTM claims.
In this case the UKSC addresses the consequences of non-compliance with a statutory requirement. It is probably the longest running legal dispute in relation to RTM. Today’s decision, in upholding the earlier decision in Elim Court, settles this issue.
The landlords in this case and Elim were represented by Justin Bates KC, described by LJ Lewison as a “seasoned warrior in the trench warfare that is RTM”. Bates has persistently argued that all failures to follow the statutory procedure, no matter how insignificant, are automatically fatal to the claim. The Supreme Court has unanimously dismissed that argument, favouring the submissions of RTMF barrister Winston Jacob. The court has ruled that the correct approach is to examine the consequence of non-compliance, the purpose of the requirement, the prejudice that might be caused and any injustice if validity is affirmed.
RTMF has today acquired RTM for over a 1,000 buildings and around 35,000 properties, a process that usually takes about 6 months. Leaseholders at Tudor Studios commenced their claim in 2019 and by raising a ‘technical objection’ the management company has been able to delay the outcome by over 4 years. In the case of Elim Court it took elderly leaseholders of a retirement block in Plymouth over 6 years before their claim was eventually decided in the court of appeal. For many the right to manage has become ‘the fight to manage’., contrary to Parliament’s intentions.
In 2017 LJ Lewison said “the current procedures still contain traps for the unwary” and he called upon the Government to consider “simplifying the procedure further”. Despite substantial consultation with industry stake holders and leaseholders, recommendations by the Law Commission published in 2020 remain largely ignored. The Leasehold Reform Act 2024, which addresses a few RTM issues, is still to take effect.
Right to Manage was a flagship policy of the New Labour Government 20 years ago. It is time for this Labour Government to reopen consultation and revisit the Law Commission’s recommendations so that landlords and managers with financial resources are curbed from thwarting Parliament’s intention and preventing leaseholders from breaking free from their management monopoly.