Guv Harborough & Saltley House RTM Co Ltd v Adriatic Land 3 Limited & Ors

For the right to manage to arise, the claimed premises must be a self-contained building or part of a building under sections 72 and 73 of the Commonhold and Leasehold Reform Act 2002. A building is self-contained only if it is structurally detached. Where premises include structures below ground, the tribunal must determine the extent of their structural connection and identify precisely what premises are claimed. Separate entrances or vertical division above ground do not resolve that question. A company whose objects concern property that is not itself a self-contained building or part of a building is not an RTM company for section 73(4). However, an existing company concerning a genuinely self-contained part may prevent a later company from acquiring the right over the larger premises. Different freehold ownership is not automatically fatal; the statutory effect is governed by paragraph 2 of Schedule 6.

The appellant RTM company claimed the right to manage Harborough House, Saltley House and Brecon House, three blocks in a residential development sharing an underground car park. Harborough and Saltley Houses were connected, while Brecon House was detached above ground. The freehold of Saltley House was held separately from the freehold of the other blocks.

The First-tier Tribunal dismissed the claim, holding that the blocks were not one building, that a separate Brecon House RTM company engaged section 73(4), and that different freehold ownership was fatal. The central issues on appeal were whether the claimed premises were a self-contained building or part of one, whether section 73(4) applied, and the effect of the split freehold.

1. Appeal allowed. The FTT’s decision was set aside because it had not applied the statutory test or made the necessary findings on the physical relationship between the blocks and the underground car park.
2. Under section 72(1)(a) and (2) of the Commonhold and Leasehold Reform Act 2002, the relevant question is whether the claimed premises are a self-contained building, meaning a structurally detached building. The tribunal must first identify the premises included in the claim and then determine the extent of any structural connection. The FTT’s finding that a car park ran continuously below the blocks required consideration of whether the blocks and car park formed one structurally detached unit.
3. The evidence was inadequate to determine whether the claimed structures formed one self-contained building, three self-contained buildings, part of a larger building including Fazeley House, or a self-contained part of that larger structure. The FTT should either have directed additional evidence or dismissed the application as unproven.
4. Section 73(4) prevents a company from being an RTM company where another company is already an RTM company in relation to the same premises, or premises containing or contained in them. But a company is an RTM company only if its objects relate to premises within section 72(1). A company whose objects concern property that is not a self-contained building or part of a building cannot engage section 73(4).
5. That did not resolve the appeal. It remained necessary to determine whether Brecon House was a self-contained part of the larger building under sections 72(3) and (4), including whether it constituted a vertical division, could be redeveloped independently, and had the required separation of services. There was no sufficient evidence.
6. Different freehold ownership was not by itself fatal. Paragraph 2 of Schedule 6 applied where different freeholders owned parts of premises and one part was a self-contained part of the building. The necessary factual findings had not been made.
7. The Tribunal remade the decision and dismissed the application as unproven. The qualifying tenants remained free to consider the issues properly before serving further notices and making any appropriate applications.

• First-tier Tribunal (Property Chamber): dismissed the appellant’s application, holding that the claimed premises were not a single building, that section 73(4) was engaged by the separate Brecon House RTM company, and that the split freehold was fatal.
• Upper Tribunal (Lands Chamber): allowed the appeal, set aside the FTT’s decision, remade the decision and dismissed the application as unproven.