Case Summary: Assethold Ltd v Eveline Road RTM Co Ltd [2023] UKUT 26 (LC)

Assethold Ltd v Eveline Road RTM Co Ltd [2023] UKUT 26 (LC)

RTM – “relevant premises” – “self-contained part of the building”

The facts

The appellant was the freehold owner of the property. The respondent had applied to acquire the right to manage (RTM) the property pursuant to the RTM provisions in Pt II Ch.1 of the Commonhold and Leasehold Reform Act 2002 (“the Act”). The key questions for the FTT was whether property qualified as “relevant premises “, which means either a self-contained building or a self-contained part of a building within the meaning s.72(3) of the Act. The FTT found that it did on the ground that although the property had initially comprised two terraced houses, since the grant of planning permission, it had been known by a single address; the appellant had consistently treated the property as a single building in obtaining insurance and; that the property differed significantly in character from blocks of flats on an estate, which were characterised as separate buildings for the purposes of the Act. On this basis the FTT held that the RTM company had acquired the right to manage the property.

The freeholder appealed to the Upper Tribunal. The respondent contended, by its cross-appeal, that even if the FTT was wrong, the property still qualified as premises to which the RTM provisions applied.

The appeal

The Upper Tribunal held that the s.72 tests for self-contained buildings and self-contained parts of buildings were physical tests. They depended upon the structure of the relevant premises and, in the case of self-contained parts of buildings, upon the ability to carry out independent redevelopment of that part and upon the nature of services provided to that part. The FTT did not apply those physical tests. Its reasoning was therefore flawed and its decision had to set aside.

The Upper Tribunal did however agree with the respondent that the property did quality as premises to which the RTM provisions applied.  A self-contained part of a building was defined in s.72(3). Premises comprised a self-contained part of a building if they satisfied the requirements in s.72(3)(a) to s.72(3)(c). As a matter of simple language, there was nothing to exclude from s.72(3) a self-contained part of a building which itself contained a self-contained part or parts of the building. It was not possible to write in such an additional restriction and there was no other provision in the Act which could be said, at least in express terms, to constitute such a restriction. Further, was nothing in Ninety Broomfield Road RTM Co Ltd v Triplerose Ltd [2015] EWCA Civ 282 which supported the appellant’s claim that an RTM claim could not be made in respect of a self-contained part of a building which itself contained a self-contained part or parts of the same building. Accordingly, the property was a self-contained part of a building and the RTM company was entitled to make its RTM claim.

Lesson learnt

The case provides helpful clarification that a right to manage claim does not have to relate to the smallest possible configuration of the relevant property. It also emphasises the need to consider the physical structure of a property when considering whether it qualifies as “relevant premises” under the Act.

Article by Lina Mattsson. First published in Gatehouse Chambers’ Property Newsletter.