What is the scope of the power to vary a manager appointment?

What is the scope of the power to vary the appointment of a manager and what is the position of a right to manage (RTM) company acquiring the right to manage after a tribunal-appointed manager has been appointed?

This was the question asked before the Upper Tribunal (UT) in Benthan v Lindsay Court (St Annes) RTM Company Ltd and Another.

The appeal was about the interaction of two statutory schemes for the management of leasehold property: the provisions of the Landlord and Tenant Act 1987 for the appointment of a manager, and those of the Commonhold and Leasehold Reform Act 2002 for the acquisition of the RTM company formed by qualifying leaseholders.

Lindsay Court, a development comprising 96 flats in 16 blocks was the subject of the appeal. The first appellant, Mr David Bentham, was appointed as manager of the whole development, by the First-tier Tribunal (the FTT) in 2014, on the application of the second appellant, the freeholder; his appointment has since been extended and remains in force. On 31 July 2020 the FTT decided that the first respondent, Lindsay Court (St Annes) RTM Company Limited, was entitled to acquire the right to manage Block 1 of the development, and it acquired that right on 22 January 2021. Block 1 comprises six flats and the long leaseholders are the other respondents to the appeal. The first and second appellants sought a variation of the order appointing Mr Bentham as manager to ensure that he continues to manage Block 1, despite the first respondent’s acquisition of the right to manage on 22 January 2021.

The FTT decided that it did not have jurisdiction to vary the order in that way, and the appellant appealed that decision. The appeal was only about jurisdiction; the FTT did not decide whether, if it had jurisdiction, it should exercise its discretion to make the variation sought. Had this appeal been successful it would have been necessary to remit the matter to the FTT for that decision to be made. However, the appeal failed.

It was decided that the first respondent will acquire the right to manage the premises, including Block 1. If the freeholder or the tenants find that they can, in the future, make a case under section 24(2) of the 1987 Act then they will be able to apply for the appointment of a manager to take over from the first respondent, but that cannot be achieved by variation of the existing order.