We are setting up an RTM company for our block. We have now realised that one leaseholder may not have received a Notice of Invitation to Participate before the claim notice went out. Does that put the whole Right to Manage claim at risk?
On 27 August 2026 the Supreme Court held in Avon Freeholds Limited v Cresta Court E RTM Company Limited [2026] UKSC 31 that a failure to serve a required Notice of Invitation to Participate does not automatically invalidate the Right to Manage claim notice that follows. A landlord cannot rely on a breach of sections 78(1) and 79(2) of the Commonhold and Leasehold Reform Act 2002 as the basis for a counter-notice. The remedy for a qualifying tenant who was missed lies in the discretionary jurisdiction under section 107. The statutory steps still have to be followed, so identifying every qualifying tenant and recording service of each notice remains essential.
The Supreme Court has now given judgment in this case. In [Avon Freeholds Limited v Cresta Court E RTM Company Limited [2026] UKSC 31](https://caselaw.nationalarchives.gov.uk/uksc/2026/31), handed down on 27 August 2026, the Court allowed the RTM company's appeal and restored the decision of the Upper Tribunal.
The Court held that a landlord may not rely on a breach of sections 78(1) and 79(2) of the Commonhold and Leasehold Reform Act 2002 as the basis for a counter-notice or for disputing the RTM company's entitlement to acquire the right. A missed notice inviting participation does not, by itself, make the claim notice a nullity. The remedy for a qualifying tenant affected by such a default lies in the discretionary jurisdiction under section 107.
This does not remove the statutory steps. Sections 78 and 79 still have to be complied with, and a company that ignores them risks section 107 proceedings, delay and cost. We explain the judgment in full in our legal update: Supreme Court rules on Right to Manage participation notices.
The rest of this answer sets out the statutory requirement, what happened in Cresta Court and the practical steps that still make a claim safe.
Before an RTM company makes its formal Right to Manage claim, it must give qualifying tenants who are not already members of, or participating in, the RTM company the statutory opportunity to take part. That is done by giving each of them a notice inviting them to participate.
In practice the same document is described in several ways: a Notice of Invitation to Participate, a participation notice, or simply an invitation notice. They all refer to the same statutory step under the Commonhold and Leasehold Reform Act 2002.
The purpose is straightforward. The Right to Manage transfers management of the building to a company owned by leaseholders, so leaseholders who are entitled to join should be told about the claim and given the chance to be part of it before it is made.
Section 79(2) of the Commonhold and Leasehold Reform Act 2002 is the provision that links participation notices to the formal claim. In broad terms, the RTM company cannot give the claim notice unless it has, at least 14 days beforehand, given a notice of invitation to participate to each person who is required to receive one.
Two points follow from that. First, the participation notices come before the claim notice, not alongside it. Second, the timing is not simply good practice; it sits in the statute, and the Cresta Court litigation turned on what happens when it is not observed.
Cresta Court E RTM Company Limited sought to acquire the Right to Manage in respect of a block of flats. The landlord, Avon Freeholds Limited, challenged the claim.
Ms O'Connor held a 150-year lease of Flat 17. She had not been given a participation notice before the claim notice was served, and the 14-day period in section 79(2) had not been allowed. There was a further complication: her long lease had been completed but not yet registered at HM Land Registry when the claim notice was served, registration later being backdated to 15 July 2021. She was accepted as a qualifying tenant, she supported the claim, and she joined the RTM company after the claim notice.
The First-tier Tribunal and the Upper Tribunal allowed the claim to succeed. The Court of Appeal held that the omission invalidated it. The Supreme Court allowed the RTM company's appeal.
In this case the lessee was treated as a qualifying tenant notwithstanding that registration was still pending when the claim notice was served.
The practical consequence for RTM companies is a cautious one. Registered title information is the natural starting point when identifying qualifying tenants, and it remains a reliable and important source. But it may not always be a complete picture of who holds a long lease at a particular moment, and relying on it alone may not be enough where there are signs of a recent or pending transaction.
Not by itself, following the Supreme Court judgment. The Court accepted that the RTM company was in procedural default under sections 78(1) and 79(2), but held that Parliament cannot have intended such a default to defeat acquisition of the right where the substantive eligibility conditions were met, unless the affected qualifying tenant invokes section 107.
The Court also found no rational basis, on these facts, for concluding that the omission caused prejudice to the landlord, to Ms O'Connor or to anyone else, and declined to allow an unaffected party a windfall power to thwart the statutory process.
No, and it would be a mistake to read it that way. The judgment changes the consequence of a default, not the duty to comply.
An RTM company that treats the participation stage casually exposes itself to a section 107 application requiring the default to be made good, and to the delay, cost and argument that follow. Prejudice and blame may be relevant to how that discretion is exercised. Getting the identification and service right first time remains far cheaper than defending the point later.
Particular care is still needed where:
Where a discrepancy of that kind emerges, it is better investigated before the claim notice is served than argued about afterwards.
If a potentially missed qualifying tenant comes to light before the formal claim notice has been served, there is usually room to put matters right. The sensible course is to review who is entitled to a participation notice, give any outstanding notices, and re-check the statutory timetable so that the claim notice is not given too early.
The position is more favourable to RTM companies than it was under the Court of Appeal decision, but it still needs handling properly. The landlord cannot found a counter-notice on that breach alone, and the affected tenant's route is section 107.
Specialist advice should still be considered, particularly where:
We act for resident-led companies and work alongside their solicitors, so we see how these claims run in practice. If you are preparing a claim, or you have inherited a claim with a question mark over it, our RTM company management service and our Right to Manage guidance set out how we support directors through the process and afterwards.
The Supreme Court has removed one line of attack on RTM claims, but not the duty to follow the procedure. For directors the work still sits at the identification stage: find every qualifying tenant, serve every notice, and keep a record of how and when each was given.
Reading the judgment as making participation notices optional
Sections 78 and 79 still have to be complied with. The Supreme Court addressed what happens when they are not, and pointed to section 107 as the remedy for the qualifying tenant affected.
Relying only on Land Registry information
There can be a gap between a transaction completing and it being registered, so the register may not yet show a lease that already exists. Cresta Court shows why apparent inconsistencies should be investigated rather than resolved by assuming the register is the only possible source of relevant information.
Assuming every RTM procedural defect is now cured
The decision concerns sections 78(1) and 79(2). The consequence of other defects depends on the particular statutory requirement and the relevant authorities.
Not revisiting a claim that was dropped on the Court of Appeal decision
Claims withdrawn, restarted or defended on the basis of the Court of Appeal position are worth reviewing with a solicitor in light of the Supreme Court judgment.
Most questions on this topic are management questions rather than legal ones, and the two are worth separating. A managing agent can tell you how something works day to day and what it will cost. A solicitor tells you what your rights are and how a Tribunal is likely to view them.
East Valley Properties provides management expertise, not legal advice. Where a matter turns on the wording of your lease or on formal proceedings, we will say so and work alongside your solicitor.
The official material behind this guide. We summarise it in plain English rather than reproducing it.
The Supreme Court judgment handed down on 27 August 2026.
The official case page, including the issue, the facts and the procedural history.
Includes section 75 (qualifying tenants), section 78 (notice inviting participation), section 79 (claim notice) and section 107 (enforcement of obligations).
The Court of Appeal decision that was overturned on appeal.
We act as managing agent for RTM companies across Greater London and Essex, covering service charge accounting, compliance and contractor management on fixed fees.
Answered by Romain Maillard - Director, East Valley Properties
Romain manages residential blocks and estates for RTM companies, residents' management companies, share of freehold developments and freeholders across East London and Essex.
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This answer has been anonymised. Personal details, addresses and company names have been removed. Guidance is general and does not replace advice from a solicitor or surveyor on your specific block. East Valley Properties is a managing agent, not a firm of solicitors or legal advisers.
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