Flat owners fighting to replace expensive or unresponsive management companies in their blocks have won a case in the UK’s highest court that strips freeholders of a powerful tool to derail resident-led takeovers. The Supreme Court on Thursday ruled in favour of a group of London leaseholders who were prevented from taking control of their building’s management due to a minor technicality. Property lawyers said the precedent-setting decision, which overturns an earlier judgment from the Court of Appeal, should facilitate other “right to manage” attempts by residents unhappy with how their blocks are run.

The case is part of a wider legal and policy battleground over the feudal-era leasehold system, which affects most flats in England and Wales. The regime has been criticised for exposing flat owners to high service charges and shoddy repairs. The right to manage, introduced in 2003, gives leaseholders powers to remove the freeholders’ management company, but lawyers said the process could be costly and onerous for flat owners.

In the case before the Supreme Court, an attempt by leaseholders at Cresta Court in west London to seize management control was thwarted because they failed to send “invitation to participate” paperwork to one resident, who had recently purchased the flat. Formal records of the property transfer were unavailable due to Land Registry backlogs. Even though the resident supported the takeover, the freeholder claimed the missed paperwork meant the entire process was legally void.

Its lawyers argued that residents seizing control of a building amounted to a forced transfer of property rights, so strict compliance was required. Property tribunals heard the dispute initially and sided with the leaseholders, but the Court of Appeal last year agreed with the freeholder that the right to manage claim was invalid. A panel of five Supreme Court judges, including president Lord Reed, on Thursday overturned that decision, ruling that minor technicalities should not invalidate takeover attempts.