The Supreme Court's Cresta RTM Judgment: What It Likely Means for Right to Manage — and What It Doesn't

Yesterday, 27 August 2026, the Supreme Court handed down its judgment in Avon Freeholds Ltd v Cresta Court E RTM Company Ltd [2026] UKSC 31. It is the most significant Right to Manage decision in years, and within hours it was being described as the end of technical challenges to RTM claims. That is partly right — but only partly. Here is what the judgment is likely to mean in practice, and just as importantly, what it does not.

What happened?

Before serving its claim notice under the Commonhold and Leasehold Reform Act 2002, an RTM company must serve a Notice Inviting Participation (NIP) on every qualifying tenant who is not already a member, and then wait at least 14 days. At Cresta Court, one leaseholder was missed. She had recently bought her flat, but her lease had not yet been registered at HM Land Registry — the familiar "registration gap" — so the RTM company did not pick her up. She supported the RTM and raised no objection. The freeholder, however, argued that the missed notice invalidated the entire claim.

The Court of Appeal agreed with the freeholder. The Supreme Court has now overturned that decision: the RTM company is entitled to acquire the right to manage despite the defect.

What it likely means?

Freeholders can no longer weaponise other people's procedural rights. The NIP requirement exists to protect leaseholders, not landlords. The Supreme Court held that a freeholder who suffered no prejudice from the error cannot use it to derail the acquisition. The days of scrutinising an RTM company's paperwork for any slip and declaring the whole claim void appear to be over.

Counter-notices are now confined to substance. The Court drew a structural line through the Act: the substantive entitlement conditions (does the building qualify, is the company properly constituted, is there sufficient membership) can found a dispute by counter-notice; the procedural machinery for making the claim cannot. A procedural failure is instead dealt with through the tribunal's enforcement mechanism under section 107 — and it is primarily for the person actually affected, such as a missed leaseholder, to invoke it.

The "registration gap" point is settled. Every court in this litigation held that a buyer whose lease is not yet registered is nonetheless a qualifying tenant, and the freeholder was refused permission to appeal that finding. This cuts both ways: recent purchasers are protected, but RTM companies must actively account for them.

Fewer restarted claims. Historically, invalidity meant starting the whole process again — new notices, new timetable, new costs. For an inadvertent NIP error where nobody affected objects, that draconian outcome is now substantially closed off.

What it does not mean?

It is not a relaxation of the eligibility rules. Nothing in the judgment touches the substantive conditions. If the premises do not qualify, the company does not meet the statutory requirements, or membership falls short, the claim can still fail — and a freeholder's counter-notice remains the proper vehicle for those disputes.

It is not permission to be careless. The statutory duties still exist. An RTM company that cuts corners still risks enforcement proceedings under section 107, and the Court left open the possibility that a claim could yet be undermined where the person directly affected by the failure takes the point. A leaseholder who was genuinely excluded and genuinely objects is in a very different position from the supportive leaseholder at Cresta Court. Serving everyone, properly and on time, remains the only sensible practice — including checking recent sales that may not yet appear on the register.

It is not the last word. The judgment is a day old. How the section 107 enforcement route interacts with entitlement determinations, and how far the reasoning extends to other defects in the RTM process beyond the NIP provisions, will be worked out in the tribunals over the coming years. The safe proposition today is specific: a NIP failure is not, by itself, a weapon a freeholder can use to defeat an otherwise valid claim.

The practical takeaway

The judgment shifts RTM litigation away from "find any defect and the claim collapses" towards a more sensible question: did the failure actually affect the statutory entitlement, or prejudice the person the rule was designed to protect? For leaseholders pursuing RTM, that removes a longstanding source of cost, delay and anxiety. For freeholders, the incentive to run purely technical objections has largely gone. And for anyone with a live RTM claim or counter-notice on foot right now, both sides should be reviewing their position against this judgment as a matter of urgency.

Want to discuss it with us?

If your block is considering the Right to Manage, or you are mid-claim and unsure where this leaves you, Bovellan advises RTM companies and resident directors on the process from first notice to handover. Get in touch at info@bovellan.co.uk.