The RTM’s claim notice sets out, amongst other things, the date by which the recipient of the claim notice may respond by giving a counter notice.
Where the RTM company receives a counter notice disputing its acquisition of the right to manage, it’s entitled to apply to the Tribunal. And the Tribunal will determine if the RTM company is entitled to acquire the right to manage the premises.
An application to the Tribunal must be made not later than two months from the date the counter notice was given. The consequence for the RTM company if they miss the date is that the claim notice is deemed withdrawn.
What if an application is made within the timeframe, but it’s defective because boxes haven’t been “ticked” or the right information provided. Can it be said that an application has been made within the statutory timeframe?
This was the question for the Upper Tribunal (Lands Chamber) in The Lough’s Property Management Limited v Robert Court RTM Company Limited  UKUT 105 (LC).
In Robert Court, the RTM company gave notice to its landlord on 10 March 2017, claiming the right to manage.
The RTM company’s right was disputed by the landlord, who served a counter notice on 10 April.
Accordingly, the RTM company had until 9 June 2017 to make an application to the Tribunal for a determination of entitlement to acquire the right to manage.
The RTM company sent an application to the Tribunal on 31 May 2017, which was received on 1 June.
However, the application was only partially completed. The RTM company failed to “tick” the relevant box to indicate what application it was making. The RTM company did not explain in its application that it was seeking a determination that on the relevant date it was entitled to acquire the right to manage. Nor did the RTM company attach a copy of its claim notice or the landlord’s counter notice.
This made it impossible for the Tribunal to tell what sort of application was being made.
The Tribunal returned the form to the RTM company on 8 June.
The RTM company resubmitted the form on 12 June. Unfortunately, the form was still incorrect because the RTM company failed to attach the claim notice and landlord’s counter notice (although on this occasion they had ticked the correct box).
The form was therefore returned by the Tribunal for a second time, before the RTM company resubmitted it (completely and correctly) on 15 June 2017.
The landlord challenged the Tribunal’s jurisdiction to make a determination in this matter on the basis that the application was out of time (arguing that the application should have been made completely by the deadline date of 9 June, but was not submitted completely until 15 June).
Decision of the FTT
The FTT held that the application received on 1 June 2017 was effective, despite its deficiencies. The FTT agreed with the RTM company that the absence of information and supporting documents was an irregularity that the Tribunal could correct by applying rule 8 of the Tribunal Procedure (First Tier Tribunal) (Property Chamber) Rules 2013.
Unsurprisingly, the landlord appealed. The appeal was on the basis that an application under section 84(3) of the Commonhold and Leasehold Reform Act 2002 must, at a minimum, communicate to the Tribunal that it was an application under that section.
Decision of the Upper Tribunal
Although the RTM company initially repeated their previous submissions, by the time of the hearing before the Upper Tribunal they conceded those points and agreed with the landlord that the application they’d submitted did not meet the requirements of section 84(3).
The Upper Tribunal did provide some helpful commentary, notwithstanding this concession on the part of the RTM company.
The Upper Tribunal was clear that section 84(3) requires the RTM company to make an application for determination of its entitlement to acquire the right to manage.
The application received by the Tribunal on 1 June did not ask it to make any determination.
The consequence of not complying with the minimum requirements of section 84(3) is set out in statute (a deemed withdrawal), and this cannot be avoided by relying on rule 8 or any other procedural tool.
Perhaps more interestingly, the Upper Tribunal also provided their view on the extent of the RTM company’s liability for costs.
The RTM company argued that its costs liability ceased when the application deadline expired under section 84(4), on the basis that the claim was deemed withdrawn at this point.
The landlord took an opposing argument, and argued that the claim was not deemed withdrawn until it had been dismissed in the proceedings.
The Upper Tribunal agreed with the RTM company’s interpretation on this point. Accordingly, the RTM company’s costs liability ceased when the claim was deemed withdrawn, not when that deemed withdrawal was confirmed.
If nothing else, this decision reinforces the importance of ensuring that a Tribunal application is properly completed.
There are strict deadlines in right to manage matters, and the consequences of missing those deadlines can often be fatal, as this case shows.
The costs arguments are potentially more interesting, and could arguably leave landlords in a potentially unfortunate position. There may be occasions that an RTM company fails to acknowledge that its claim is deemed withdrawn, rendering it necessary for a landlord to bring proceedings to clarify the position. Based on this decision, the landlord is unlikely to be able to recover its costs in doing so, even where the challenge is successful.