Better Intelligent Management Ltd v Phoenix Place Block A RTM Company Ltd & Anor

This appeal is about the acquisition of the statutory right to manage under Chapter 1 of Part 2 of the Commonhold and Leasehold Reform Act 2002 (the 2002 Act).

By a decision handed down on 10 September 2025 following the service of claim notices given under section 79 of the 2002 Act, the First-tier Tribunal (Property Chamber) (the FTT) determined that each of the respondents was entitled to acquire the right to manage one of two self-contained buildings in Liverpool. The appellant, which owns the freehold of the two buildings, maintains that the FTT was wrong to make that determination because, in doing so, it had to determine the effect of two previous claim notices which had not themselves been the subject of applications to it. The appellant argues that the FTT has no jurisdiction to consider the effect of a notice of claim which has not been referred to it within the time allowed by the statutory scheme, even where the notice is not relied on by the applicant in the application and is relied on by the respondent only as an obstacle to the acquisition of the right to manage.

Having heard submissions from Miss Rebecca Cattermole in support of the appeal I informed the parties that I had decided to dismiss the appeal and to confirm the decision of the FTT that the respondents are entitled to acquire the right to manage. These are my reasons for that decision.

Chapter 1 of Part 2 of the 2002 Act provides for the acquisition of rights in relation to the management of premises to which the Chapter applies by a company, referred to as an RTM company (section 71(1), 2002 Act).

Section 72 of the 2002 Act describes the premises to which Chapter 1 applies and requires that they must consist of a self-contained building or part of a building. This requirement means that an RTM company cannot acquire the right to manage more than one self-contained building or part of a building: Triplerose Ltd v Ninety Broomfield Road RTM Co Ltd [2015] EWCA Civ 282.

Section 73 of the 2002 Act explains what an RTM company is. Section 73(2) provides that:

“A company is an RTM company in relation to premises if –

(a)

it is a private company limited by guarantee, and

(b)

its articles of association state that its object, or one of its objects, is the acquisition and exercise of the right to manage the premises.”

Model articles of association for RTM companies are prescribed by the RTM Companies (Memorandum and Articles of Association) (England) Regulations 2009, made under section 74(2). The model articles are required to specify the premises in relation to which the company is an RTM company.

It has been held that each of the references to “premises” in section 73 of the 2002 Act is to premises as defined in section 72(1), namely to a self-contained building or part of a building: GUV Harborough & Saltley House RTM Company Limited v Adriatic Land 3 Limited [2024] UKUT 109 (LC) at [43]. It follows that a company is not an RTM company if its articles of association state that its object is the acquisition and exercise of the right to manage premises which are not premises to which Chapter 1 applies because they are not a single self-contained building or part of a building: GUV Harborough at [43].

A claim to acquire the right to manage is made by giving notice of the claim under section 79 of the 2002 Act (referred to as a “claim notice”); and the date on which a claim notice is given is referred to as the “relevant date”. Section 79(3) provides that the claim notice must be given by an RTM company which complies with subsections (4) or (5), which concern the number of qualifying tenants who must be members of the RTM company. There is no issue in this appeal about qualifying tenant numbers, but section 79(3) confirms the obvious requirement that a claim notice may only be given by an RTM company.

Section 80(2) of the 2002 Act requires that a claim notice must specify the premises and state the grounds on which it is claimed that they are premises to which the Chapter applies.

The 2002 Act includes provisions designed to prevent two claim notices running at the same time. Section 81 provides as follows:

“81 Claim notice: supplementary

…

(2)

Where any premises have been specified in a claim notice, no subsequent claim notice which specifies—

(a)

the premises, or

(b)

any premises containing or contained in the premises, may be given so long as the earlier claim notice continues in force.

(3)

Where a claim notice is given by a RTM company it continues in force from the relevant date until the right to manage is acquired by the company unless it has previously—

(a)

been withdrawn or deemed to be withdrawn by virtue of any provision of this Chapter, or

(b)

ceased to have effect by reason of any other provision of this Chapter.”

A person who is given a claim notice by an RTM company may give a counter-notice either admitting the entitlement of the company to acquire the right to manage or contesting it (section 84(1), 2002 Act). An RTM company which receives a counter-notice disputing its entitlement may apply to the appropriate tribunal (in England, the FTT) for a determination that on the relevant date it was entitled to acquire the right to manage the premises (section 84(3)).

A claim notice may be withdrawn by an RTM company serving a notice of withdrawal (section 86(1), 2002 Act) and is deemed by section 87(1) to be withdrawn if an RTM company has been given a counter-notice disputing its entitlement and no application for a determination under s.84(3) is made within the relevant period (or such an application is so made but is subsequently withdrawn).

By section 90(2) of the 2002 Act, where there is no dispute about entitlement the right to manage is acquired on the date specified in the claim notice (which by section 80(7) must be at least three months after the last date for giving a counter-notice). Where the right is acquired by virtue of a determination by the FTT the acquisition date is three months after the determination becomes final (section 90(4)).

Phoenix Place is a modern development of purpose-built student accommodation at 5 Prince Edwin Street in Liverpool. It comprises two self-contained blocks, referred to as ‘Block A’ and ‘Block B’. Together the Blocks contain 348 units of accommodation. Better Intelligent Management Ltd owns the freehold of both blocks.

The respondents, Phoenix Place Block A RTM Company Ltd (‘RTM A’) and Phoenix Place Block B RTM Company Limited (‘RTM B’) were incorporated in December 2023 with a view to them acquiring the right to manage.

Unfortunately, a mistake was made in the articles of association of the companies. Other than in identifying the name of the company, the two sets of articles were identical. The articles were in the prescribed form but instead of stating that RTM A intended to acquire the right to manage Block A, and that RTM B intended to acquire the right to manage Block B, as they should have done, the articles defined the premises in respect of which the company was an RTM company in both cases as 5 Prince Edwin Street, Liverpool L5 3AA, which is the postal address of Block A and Block B. The effect was that each company purported to have as its object the acquisition of the right to manage the same premises, and that in each case those were not premises to which Chapter 1 applied because they comprise more than one self-contained building.

On 21 August 2024, the RTM companies’ solicitors served claim notices on the appellant under section 80 of the 2002 Act. The notice served on behalf of RTM A claimed the right to manage Block A, and the notice served on behalf of RTM B claimed the right to manage Block B. I will refer to these as the First Claim Notices.

On 19 September 2025 the appellant responded to the First Claim Notices by serving counter-notices asserting that RTM A and RTM B were not entitled to acquire the right to manage. Two reasons were given, but the second has fallen away. The first reason was that the companies’ articles of association defined “the premises” as 5 Prince Edwin Street, rather than as Block A or Block B respectively; the effect was said to be that each of the companies purported to acquire the right to manage both Block A and Block B which was not permissible.

On receiving the counter-notices, the RTM companies appreciated that there was a mismatch between the premises described in their articles of association and the premises described in the First Claim Notices and took immediate action to correct the error. On 22 October each company passed a special resolution adopting new articles of association in substitution for their original articles. The new articles were in the same form as before, except that in the case of RTM A the definition of “the Premises” became ‘Block A, Phoenix Place …’ and for RTM B it became ‘Block B, Phoenix Place …’, so that each company’s articles related to a single self-contained building.

Through their solicitors, the RTM companies then each served a second claim notice on 15 November 2024 claiming to be entitled to acquire the right to manage their respective Block. I will refer to these as the Second Claim Notices.

In answer to the Second Claim Notices the appellant served new counter-notices on 17 December relying on section 81(3), 2002 Act and asserting that when the Second Claim Notices were served the companies had not been entitled to acquire the right to manage because at that time the First Claim Notices continued in force.

No application was made to the FTT by the RTM companies relying on the First Claim Notices. Nor had they been withdrawn or disavowed by the companies before the Second Claim Notices were given. It was in reliance on the Second Claim Notices that the RTM companies applied to the FTT for determinations that they were entitled to acquire the right to manage.

The FTT accepted the RTM companies’ argument that the First Claim Notices were never valid, had no legal effect and so were never “in force” and could not “continue in force” for the purpose of the prohibition in section 81. The original articles of RTM A and RTM B did not identify “premises” as defined in section 72(1), with the result that the companies were not RTM companies at all. Accordingly, the First Claim Notices were not claim notices for the purpose of section 79(3) because they had not been given by what the FTT called “properly constituted RTM companies” so they did not need to be withdrawn before the Second Claim Notices were given. Of the ground of opposition identified in the second counter-notices the FTT said simply: “The restriction in section 81(3) does not apply”.

Miss Cattermole did not appear for the appellant before the FTT and was instructed only on the appeal. In her submissions she was not prepared to acknowledge the force or correctness of the FTT’s reasoning, but nor did she seek to challenge it directly. Instead, she submitted that the FTT had not been entitled even to consider the application before it because it had not been within its jurisdiction to do so.

Miss Cattermole reminded me that the jurisdiction of the FTT was entirely statutory, and it was not entitled to consider a matter which had not properly been referred to it, nor was it entitled to consider a matter outside the timetable. In the case of a claim to have acquired the right to manage, the FTT’s jurisdiction was limited to considering the validity of a claim notice in respect of which a counter-notice had been given and an application had been made. It was in that context, and that context alone, that the FTT could consider questions such as whether a company was an RTM company at all, or whether the premises in respect of which a claim notice had been given were premises to which Chapter 1 applied.

An apparently valid claim notice served on a landlord was “operative” and any question about its validity was “held in abeyance”, as Miss Cattermole put it, until it was dealt with in one of the ways specified in the 2002 Act. If the recipient of the notice served a positive counter-notice acknowledging that the giver of the claim notice was entitled to acquire the right to manage, the effect of the claim notice was provided for by section 90(2), and the right would be acquired on the date specified in the claim notice. The same would be true if no application was made within the period of two months of the counter-notice being given as prescribed by section 84(4). A claim notice would cease to be operative if it was formally withdrawn by the service of a notice of withdrawal given under section 86, or if it was deemed to have been withdrawn under section 87(1) because no application was made to the FTT under section 84(3) following the receipt of a counter-notice, or if, having been made, such an application was then withdrawn. Finally, if an application was made to the FTT under section 84(3), the claim notice on which the application was based would remain operative and in force until the FTT made its determination resolving one way or the other whether the notice had been valid.

It could not be known whether or not the effect of the claim notice would be the acquisition of the right to manage until the claim notice had arrived at one of the terminal points laid down by the statute. But until the notice reached one of those definitive events, it had all of the consequences provided for in the legislation and any doubt about its validity was in abeyance. As a result, Miss Cattermole submitted, while a claim notice was operative in the sense described, section 81(2) applied and no further claim notice could be given while it remained in force.

An RTM company which served a claim notice which it then feared was invalid could withdraw the original claim notice and serve a new claim notice or it could wait to see if the claim was admitted. What it could not do, Miss Cattermole submitted, was to proceed as if no claim notice had been served by serving a new claim notice before the period of two months for an application to the FTT had expired. Its original claim notice was to be treated as valid until the end of that period and section 81(3) prohibited the service of a new claim notice while the first remained in force.

The FTT had jurisdiction to determine the validity of the First Claim Notices until the expiry of the period of two months from the service of the original counter-notices. That jurisdiction terminated on 19 November 2024 when time for an application relying on the First Claim Notice ran out. Thereafter, the FTT had no jurisdiction to consider the effect of the First Claim Notices in any proceedings. Nor had the RTM Companies any right to seek a determination of the effect of the First Claim Notice from the FTT, as the time for making such an application had expired. A determination concerning the First Claim Notices could only be made by the High Court, and not by the FTT.

Alternatively, Miss Cattermole argued, the RTM Companies were estopped from arguing that the First Claim Notices were invalid. That was said to be because the appellant, in good faith, had incurred time and cost in serving the original counter-notices.

I do not accept Miss Cattermole’s submissions and, in my judgment, the FTT was correct in its conclusion that the RTM companies were entitled to acquire the right to manage. There are three reasons for that conclusion.

First, and most importantly, nothing which was done by the two companies before they amended their articles of association on 22 October 2024 had any legal effect for the purpose of the 2002 Act. A company may only be an RTM company in relation to premises to which Chapter 1 applies. Chapter 1 does not apply to premises comprising more than one self-contained building. Companies whose objects are the acquisition of the right to manage premises comprising two self-contained blocks of flats are not RTM companies. That was the analysis adopted by the FTT and Miss Cattermole advanced no argument against it.

A claim notice must be given by an RTM company (section 79(3)) and a notice given by a company which is not an RTM company is not a claim notice. It follows that the First Claim Notices given by the respondents were not claim notices and did not have the same consequences as a claim notice.

There is no sanction in the statutory scheme for treating a notice served by a company which is not an RTM company as if it was a valid notice, and as having the effect of a valid notice, until it is found to be invalid. As the Tribunal (Sir Keith Lindblom CP) explained in Avon Freeholds Ltd v Regent Court RTM Co Ltd [2013] UKUT 213 (LC), the statutory consequences:

“In my view, however, one must read section 90 of the 2002 Act as assuming a valid claim notice under section 80 and, in the circumstances envisaged in section 90(3)(b), a valid counter-notice under section 84. Parliament cannot have intended that a right to manage could be acquired on the basis of notices that were inherently unlawful, or that there should be no remedy to prevent that result.”

I was referred to a decision of Morgan J under the Leasehold Reform, Housing and Urban Development Act 1993, Poets Chase Freehold Co Ltd v Sinclair Gardens Investments (Kensington) Ltd [2008] 1 WLR 768. In that case a group of tenants claimed the right to collective enfranchisement under the Act by giving a notice under section 13; but the notice did not comply with the requirements of section 13(3) concerning the contents of such a notice. When the mistake was pointed out, the tenants admitted that the first notice was invalid and served a second notice, before the expiry of the 12 month period which section 13(8) imposes between notices. Rather like the submissions in this appeal, it was argued on behalf of the landlord that the first notice had the statutory consequences prescribed by section 13(8) and that the second notice was premature and invalid. Morgan J disagreed, at [61]:

“[I]t is my conclusion that there is nothing in that scheme which requires one to hold, contrary to the normal position with non-compliant notices, that a purported notice under Section 13, which fails to be effective because it does not comply with Section 13(3), nonetheless has some statutory consequences such that it is to be treated as a notice “under Section 13” or a “notice in accordance with Section 13” or as a “notice which continues in force” until the tenants accept that the notice does not comply with Section 13(3) and is ineffective.”

Miss Cattermole suggested that it was critical to the decision in Poets Chase that the tenants had admitted that their first notice was invalid, and that Morgan J’s decision was therefore to be distinguished on its facts since the RTM Companies had not acknowledged the invalidity of the First Claim Notices until after the service of the Second Claim Notices. I do not agree that that slight difference on the facts is relevant to the reasoning in Poets Chase. The “normal position”, to which Morgan J was referring, was the general proposition that where a notice fails to comply with a mandatory contractual or statutory provision requiring it to be in a particular form, a purported notice which fails to comply with the mandatory provision has no legal effect (See, at [53]). That general position could be modified by something in the particular statutory scheme, but in the absence of some such modification the defective notice is no notice at all.

Miss Cattermole referred to a number of cases in which a party had accepted that a previous notice they had given was invalid before giving a further notice. While an admission of invalidity was a feature of those cases, none of them establishes any relevant principle.

Miss Cattermole did not refer to any part of the 2002 Act as disapplying the normal position concerning invalid notices. I therefore do not accept her argument that the First Claim Notices were “operative” for the purpose of section 81(4) at the time the Second Claim Notices were given. In my judgment they had no legal effect.

Secondly, I do not accept that the FTT lacked jurisdiction to determine the validity and effect of the First Claim Notices because no application based on those notices had been made to it before they were deemed to have been withdrawn.

Any court or tribunal has power to satisfy itself that it has jurisdiction to determine an issue in proceedings before it, and to consider any question which it is necessary to consider in order to do so. An example from the jurisdiction of this Tribunal is provided by In Jillas’ Application [2000] 2 EGLR 99, which concerned an application to modify a restrictive covenant under section 84(1) of the Law of Property Act 1925. An issue arose about the meaning of the covenant in question, and whether it was subject to an implied term, and it was said that only the court had power to determine that question under section 84(2). The Tribunal (George Bartlett QC, President) dismissed that suggestion, saying that it was “self-evident that the tribunal must determine the meaning of the restriction to the extent that that is necessary to enable it to determine the application before it, and any terms to be implied by the wording of the restriction are part of its meaning.” The same is true of the effect of the First Claim Notices.

Miss Cattermole also referred to a case in the Divisional Court concerning the power of a rent officer to determine whether a tenancy was a protected tenancy in respect of which a fair rent could be registered, R v Camden London Borough Rent Officer ex p Ebiri [1981] 1 WLR 881, which illustrates that principle. Donaldson LJ explained what a rent officer should do in such a case, at 884 C-G, as follows:

“In my judgment, it is the duty of a rent officer to consider what his jurisdiction is in cases in which he has an application which depends on a disputed question whether the particular contractual arrangement between landlord and tenant or landlord and licensee is or is not a protected tenancy. He has to consider it but he cannot determine it. He has no jurisdiction to determine it on a final and binding basis, subject to appeal as between the parties. His jurisdiction is like that of an arbitrator. It stems from an assumption, namely, in the case of an arbitrator that there is an agreement to refer; in the case of a rent officer determining a fair rent on an assumption that there is a protected tenancy. […] If he is satisfied that there is not a protected tenancy he has no problem. He just does not proceed further until it has been determined by a court of competent jurisdiction that there is a protected tenancy. If he is satisfied that there is a protected tenancy (and, note, I say “satisfied” and not “decided” because he has no jurisdiction to decide), in my judgment, he must proceed. It is only if he is in doubt whether there is or is not a protected tenancy that he has a discretion whether to proceed or not to proceed.”

Finally, no question of the FTT’s jurisdiction to entertain an application based on the First Claim Notices arises in this appeal. The application before the FTT was based on the Second Claim Notices, not the First. The appellant’s defence to the respondents’ claim to have acquired the right to manage was that the Second Claim Notices were served while the prohibition in section 81(3), 2002 Act applied. It is obvious that the FTT had to determine whether that objection was a valid one. That required it to determine whether the First Claim Notices remained in force. It was irrelevant that no application based on the First Claim Notices was before it for determination, because the issue arose in the application based on the Second Claim Notices.

Nor do I accept that the RTM companies are prevented by the principle of estoppel from denying the effectiveness of the First Claim Notices. The FTT did not deal with an argument based on the principle of estoppel by representation, which had not featured in the appellant’s written case but was raised orally. The argument was not developed orally on the appeal, but there appears to be no basis on which the appellant can claim to have been misled about the effect of the First Claim Notice, nor any evidence that it believed the notices to be valid. On the contrary, it asserted in its counter-notices that the First Claim Notices were invalid. There is nothing unconscionable about the RTM companies resisting the appellant’s later argument that they had some residual legal effect.

These were the reasons I dismissed the appeal. The RTM companies are entitled to acquire the right to manage with effect from the date which is three months after this decision becomes final.

At the conclusion of the hearing of the appeal I was shown a letter dated 29 June 2026 which I was told had been sent by the appellant’s managing agents to participating tenants who are shareholders in the RTM companies. It appeared to suggest that the acquisition of the right to manage would allow the RTM companies to manage only those flats which belonged to participating tenants. If that is the appellant’s understanding of the statutory scheme they are mistaken. The RTM companies will be entitled to manage the whole of the self-contained buildings.