Can the Right to Manage Company (RTM) apply to the First-tier Tribunal (FTT) for determination of breach of covenant under the lease?
The RTM is created by statute and allows qualifying tenants of leasehold of flats to collectively take over the management of their building from the landlord/freeholder. The qualifying tenants must set up a limited company in compliance with the statute, which is owned by them.
Once the RTM has acquired management responsibilities, it can collect service charges, arrange maintenance of the building as well as enforce covenants under the various leases.
If a leaseholder in the building has not paid service charges, provided these were correctly demanded and served, the RTM can initiate either court proceedings for unpaid arrears or, as confirmed in the Court of Appeal case of Eastpoint Block A RTM Company Ltd v Otubaga [2023] EWCA Civ 879, apply for determination of breach in the FTT.
The Upper Tribunal Decision
The RTM, Eastpoint Block A RTM Company Ltd (the Applicant) applied to the FTT for determination that a leaseholder was in breach of the lease covenant under the section 168(4) of the Commonhold and Leasehold Reform Act 2002 (2002 Act).
Section 168(4) states that “a landlord under a long lease of a dwelling may make an application to the appropriate tribunal for a determination that a breach of a covenant or condition in the lease has occurred”.
The FTT and the Upper Tribunal did not agree that the Applicant was “a landlord” for the purposes of the 2002 Act.
The Applicant appealed.
Court of Appeal decision
The Court of Appeal overruled the FTT and Upper Tribunal and held that the Applicant could apply for determination of breach at the FTT under section 168(4) of the 2002 Act.
The Court of Appeal held that the landlord’s management functions, duties and responsibilities were transferred from the landlord to the RTM under section 96 of 2002 Act on the acquisition date. Section 100(2) of the 2002 Act permits the RTM to enforce “untransferred tenant covenants” which may include an application to the FTT for determination of breach under section 168(4)2002 Act, however, it does not permit the RTM to exercise any function of re-entry or forfeiture (section 100(3)).
Conclusion
The Court of Appeal decision has made it clear that an RTM may enforce lease breaches through Section 168(4) of the 2002 Act. However, forfeiture of the lease is still only available to the landlord. An RTM may pursue other enforcement routes following determination should they wish to do so but not forfeiture.
Contact our Litigation & Dispute Resolution Teams
Tatsiana Rao is an Associate Solicitor in the Litigation & Dispute Resolution team. Should you require any further advice or assistance, please contact us at litigation@bishopandsewell.co.uk or call her, on 0207 7079 2410.
The above is accurate as at 11 March 2026. The information above may be subject to change. The content of this note should not be considered legal advice and each matter should be considered on a case by case basis.
