Trinity's Fiona Todd Reviews Supreme Court Judgement in Avon Freeholds Ltd v Cresta Court E RTM Co Ltd [2026]

In this article, Trinity’s Fiona Todd discusses the Supreme Court’s judgment in Avon Freeholds Ltd v Cresta Court E RTM Co Ltd [2026] UKSC 31, released on 27 August 2026.

Missed a NIP? No need to panic…The Supreme Court gives clarity on NIP-based RTM challenges in Avon Freeholds Ltd v Cresta Court E RTM Co Ltd [2026] UKSC 31

The right to manage (RTM) regime under Chapter 1 of Part 2 of the Commonhold and Leasehold Reform Act 2002 was designed to allow leaseholders to acquire the right to manage through an RTM company simply, cheaply, and without having to prove there was anything wrong with the landlord’s management.

In reality, the procedural hurdles contained in the 2002 Act have provided landlords with multiple avenues to challenge an RTM claim. The Supreme Court judgment in Avon Freeholds Ltd v Cresta Court E RTM Co Ltd [2026] UKSC 31 handed down on 27 August 2026 provides a definitive answer to one such issue: what happens if an RTM company fails to send a notice of invitation to participate (a “NIP”) to a qualifying tenant before giving its claim notice to the landlord?  

The Background

The dispute concerned a block of 20 flats at Cresta Court in west London. The RTM company served its claim notice on the freeholder, Avon Freeholds Ltd, on 21 January 2022. The problem was that Ms O’Connor, the residential occupier of one flat, had not been sent a NIP beforehand, or at all.

Ms O’Connor’s lease had not been registered at HM Land Registry prior to the notice of claim being issued, meaning she held only an equitable interest. There was no legal lease in existence. The RTM company had simply not identified her as a qualifying tenant at the time the NIPs were sent out. Five days after the claim notice was served, Ms O’Connor voluntarily joined the RTM company and confirmed her support of the RTM claim.

Avon issued a counter-notice arguing the claim was fatally flawed for two reasons:

• the RTM company had not given a NIP to all “qualifying tenants” who had not become or agreed to become its members (as required by section 78(1) of the 2002 Act); and
• it had not waited 14 days after giving a NIP to all eligible qualifying tenants before giving a claim notice (as required by section 79(2) of the 2002 Act).

The Upper Tribunal

The Upper Tribunal ([2024] UKUT 335 (LC)) tackled two questions.

First, was Ms O’Connor as holder of an unregistered equitable lease a qualifying tenant under the 2002 Act? The Upper Tribunal said yes: where there is no legal lease but only an equitable one, the equitable lessee qualifies. However, in circumstances where there is both a legal and equitable lease, the qualifying tenant is the legal lessee.

Second, did the failure to send Ms O’Connor a NIP invalidate the claim notice? The Upper Tribunal said no, reasoning that the claim notice was voidable at the instance of the overlooked tenant herself, not void at the behest of the landlord. Since Ms O’Connor had no complaint, the claim notice was not invalidated.

The Court of Appeal

The Court of Appeal ([2025] EWCA Civ 1016) agreed with the Upper Tribunal on the first point, that Ms O’Connor was indeed a qualifying tenant, but disagreed on the second.

It was held that section 79(2) of the 2002 Act contained an express statement of the consequences of failing to serve a NIP: the claim notice simply “may not be given unless each person required to be given notice of invitation to participate has been given such a notice at least 14 days before.” The Court of Appeal’s view was that this was something that the RTM company simply had to get right as a pre-condition of making a valid claim, and if it did not, the RTM company would have to start again. It was held that this was not a case for the more flexible approach following R v Soneji [2006] 1 AC 340 (which, in broad terms, asks whether Parliament truly intended invalidity for a procedural breach). Parliament had spoken clearly, and a claim notice served in breach was a nullity.

The Supreme Court

The RTM company appealed on the second point: that the failure to serve one of the qualifying tenants with a NIP before serving the claim notice rendered that notice void.

The Supreme Court unanimously allowed the RTM company’s appeal, restoring the Upper Tribunal’s decision in a judgment delivered by Lord Briggs on 27 August 2026.

Lord Briggs’ central conclusion was that section 79(2) of the 2002 Act does not impose an express sanction of invalidity for breach of the NIP requirements. Rather, it is a timing rule for claim notices, primarily about the need to leave a 14-day gap after the last eligible tenant is given their NIP. Nor does section 78(1) contain any express sanction for breach. Since neither provision expressly stated the consequences of a failure to comply with a statutory procedural requirement, the Soneji principle applied under which the court must infer what consequences Parliament had intended non-compliance to have by considering:

• the purpose served by the requirement as assessed in the light of a detailed analysis of the statute; and
• the specific facts of the case, having regard to what prejudice or injustice might arise if the validity of the statutory process was affirmed notwithstanding noncompliance with the requirement.

It was held that the rules in sections 78(1) and 79(2) of the 2002 Act are procedural and do not go to the question of entitlement to acquire the right to manage. As such they cannot be raised by way of objection to the acquisition of the right to manage by the RTM company. In fact, the only sanction for non-compliance available is an enforcement order under section 107 of the 2002 Act (which permits the tribunal to make an order requiring a person who has failed to comply with a requirement imposed on him to make good the default) which is available to a tenant only, not a landlord.

Where does this leave us?

The position is now clear. A failure by an RTM company to serve a NIP on a qualifying tenant before issuing its claim notice does not invalidate the claim. A landlord cannot weaponise such a procedural slip to defeat an otherwise valid claim to acquire the right to manage. This decision will be welcomed by RTM companies, but for landlords searching for technical knock-out blows, the ring just got smaller.

Fiona Todd is a Commercial Chancery barrister at Trinity Chambers, specialising in Property, Probate, Insolvency and Commercial Disputes. She regularly deals with disputes relating to service charges and the management of commercial and residential property. Fiona also features prominently in the leading legal directories. Recent entries include:

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