Spire House RTM: A Landmark Decision on Lease Variation and Funding for Repairs

On 8 July 2025, the Upper Tribunal (Lands Chamber) handed down a significant decision in Eastern Pyramid Group Corporation SA & Others v Spire House RTM Company Limited ([2025] UKUT 292 (LC)), confirming that leases can be varied under section 35 of the Landlord and Tenant Act 1987 where they fail to make workable provision for recovering expenditure.

This ruling marks a turning point for Right to Manage (RTM) companies facing restrictive lease terms that hinder their ability to collect service charges or fund essential works. The Tribunal’s reasoning drew heavily on legal principles established in 56 Westbourne Terrace RTM Company Limited v Polturak & Others — a case in which our firm successfully acted.

The Problem at Spire House

Spire House RTM Company was responsible for managing a building that included a Victorian church spire in Lancaster Gate, London. Urgent repair works were needed, but the leases capped contributions to both the reserve fund and interim charges. In practice, this meant the RTM company would be unable to raise sufficient funds in time.

The Tribunal found these lease provisions unworkable and agreed to vary the leases to allow reasonable advance payments — a crucial step in enabling the RTM company to carry out its management functions effectively.

Why the Decision Matters

The appeal raised an important question: should the financial position of the party with management functions (i.e. the RTM company) be relevant when assessing whether a lease makes “satisfactory provision”? The Upper Tribunal said yes.

It confirmed that practical realities — such as an RTM company having no assets or income — must be considered. This pragmatic approach gives RTM companies a clearer path to securing the funding they need, even where lease terms are outdated or overly restrictive.

Building on 56 Westbourne Terrace

In reaching its decision, the Tribunal relied on our earlier case, 56 Westbourne Terrace, where we successfully argued that leases should be varied to allow RTM companies to recover enforcement costs. The leases in that case only allowed the landlord to recover forfeiture costs — a remedy not available to RTM companies.

The Tribunal agreed that this failed to make “satisfactory provision” and set a precedent now relied upon in Spire House and other cases. Importantly, the decision clarified that “satisfactory” does not mean perfect — just adequate and workable in the current context.

Supporting RTM Companies Nationwide

This case reinforces the growing body of authority supporting lease variation where RTM companies are hamstrung by outdated lease structures. If your RTM company is struggling to recover service charges or fund essential works, we can help.

Our team has a proven track record in securing lease variations that unlock funding and restore effective management.

Get in touch today to discuss how we can support your RTM company by contacting Gabrielle Moffatt on grm@deanwilson.co.uk or 01273 249253.