A recent series of decisions culminating in Eastpoint Block A RTM Co Ltd v Otubaga [2023] EWCA Civ 879 has reshaped how Right to Manage (RTM) companies can deal with lease breaches. The Court of Appeal has now confirmed that RTM companies can apply directly to the First‑tier Tribunal (FTT) for a determination that a leaseholder is in breach of covenant, even though an RTM is not a freeholder.
This clarification resolves years of uncertainty and provides much needed practical guidance for RTMs, managing agents and leaseholders.
Drawing on her extensive experience advising RTM companies, managing agents and leaseholders on complex covenant and enforcement issues, Brady Solicitors Head of Litigation and Leasehold Transactions, Liz Rowen, sets out her take on the Eastpoint decision, its practical impact on day‑to‑day management, and what it really means for the sector moving forward. The analysis below explains why the judgment matters, how it changes the landscape for RTMs, and in turn managing agents, and the key considerations that industry professionals should keep in mind.
What the Court of Appeal decided
For years, RTMs were told they could not apply to the FTT for a breach determination because the legislation stated that only a “freeholder” could apply. Tribunal and court decisions repeatedly struck out RTM applications on this basis.
The Court of Appeal took a different view. It recognised that the enforcement of covenants forms part of the “management functions” transferred to an RTM under section 96 of the Commonhold and Leasehold Reform Act 2002. It also confirmed that under section 100(2), RTMs may enforce certain tenant covenants in the same manner as freeholders, even though they still have no power to exercise forfeiture related functions.
In short, an FTT determination is not itself a forfeiture action, and therefore the RTM is entitled to seek it.
This aligns with broader commentary noting that RTM companies share concurrent jurisdiction with freeholders when it comes to enforcing untransferred covenants and using the appropriate forums to resolve those issues.
Why this matters in practice
This development is significant because, until now, RTMs were required to pursue breach declarations or injunctions in the County Court, which involves higher court fees and more complex procedures. That route was invariably more expensive and time‑consuming, meaning RTMs faced real barriers when trying to address persistent breaches of covenant.
The ability to seek a determination in the FTT is therefore a substantial shift. The FTT is more accessible and typically far more cost effective. Many disputes, particularly those involving interpretation of lease wording rather than serious misconduct, are now far easier to resolve without exposing the RTM to the risks and expense of County Court litigation.
This will be especially useful where leaseholders dispute the meaning or scope of covenants. The FTT’s role in clarifying those issues provides a practical and proportionate way to bring arguments to a close.
Does this improve enforcement on arrears or major breaches?
The answer is mixed.
While the procedural avenue has improved, the underlying enforcement powers have not changed. RTMs still cannot forfeit leases, even with an FTT determination in hand. That remains a freeholder only remedy.
However, an FTT determination can still assist in arrears cases. It provides authoritative confirmation of what is owed or whether a breach has occurred, which strengthens a subsequent County Court claim for recovery. It also puts additional pressure on non‑paying leaseholders, since any dispute over liability becomes much harder to maintain once the tribunal has made a formal finding.
Even so, where a breach is genuinely serious and enforcement action may be required, such as injunctions or steps toward landlord‑led forfeiture, the County Court remains the appropriate forum. The FTT can determine whether a breach exists, but it cannot grant the remedies needed to compel compliance.
Additional considerations for older leases
Some older leases, particularly those predating the Right to Manage regime, do not give RTMs adequate provisions to recover enforcement costs. As a result, RTMs occasionally need to apply for lease variations to ensure they can recover reasonable legal and professional costs associated with enforcing covenants. This was highlighted in a 2025 Upper Tribunal decision involving variations sought to allow the RTM to recover enforcement costs.
Conclusion
The Court of Appeal’s clarification is unquestionably positive for RTM companies. They now have a reliable, affordable and accessible way of obtaining breach determinations through the FTT rather than being pushed into costly County Court proceedings. This is particularly helpful because many disputes are about the interpretation of lease provisions rather than the need for serious enforcement action.
However, the ruling does not expand RTM enforcement powers. Forfeiture and certain stronger remedies remain exclusively with the freeholder. For complex or serious breaches, the County Court will still be the necessary route.
In practice, though, RTMs now have a clearer, more pragmatic tool for addressing lease interpretation disputes and documenting breaches, one that can save significant time and cost while avoiding unnecessary escalation.
