The Courtyard RTM Company Ltd & Ors v Rockwell (FC103) Ltd & Anor

For premises to qualify as a self-contained part of a building under the Commonhold and Leasehold Reform Act 2002, there must be an actual physical vertical division. A notional boundary may identify the limits of an existing divided area, but cannot create a division through an open-plan, undivided space. A shared basement car park may therefore prevent blocks above it from qualifying. The division need not follow one perfectly straight line, and projections unconnected to the remainder do not themselves defeat the test. Independent redevelopment is a hypothetical question of fact and degree. It requires that the part could be redeveloped without the remainder being redeveloped at the same time. Complete demolition, absence of any effect on neighbours, and exclusion of temporary supports are unnecessary. Both appeals were dismissed.

Two appeals concerned the statutory right to manage under Chapter 1 of Part 2 of the Commonhold and Leasehold Reform Act 2002. In the first, RTM companies claimed that three blocks in the Plaza Boulevard development were self-contained parts of a building, despite a shared basement car park. The Upper Tribunal dismissed their appeals. In the second, landlords challenged the finding that No. 14 Park Crescent and its mews were a self-contained part of a building. The Upper Tribunal dismissed that appeal. The central questions were whether the claimed premises satisfied the vertical-division requirement in section 72(3)(a), and what independent redevelopment required under section 72(3)(b).

1. Disposition. Miles LJ, with Foxton and Singh LJJ agreeing, dismissed both appeals.

2. Vertical division. The test in section 72(3) of the Commonhold and Leasehold Reform Act 2002 is physical. It concerns built structures rather than ownership. A notional line may be drawn through an existing physical dividing feature, such as a party wall, to identify the boundary of the premises. It cannot itself create a division through open, undivided space. There is no requirement for one perfectly straight boundary. A dog-leg division may qualify, and only boundaries connected to the remainder of the building are relevant. Projections over neighbouring land or the highway therefore do not themselves defeat the test.

3. Plaza Boulevard. The three blocks included areas of an open-plan, shared and undivided basement car park. Those areas were not physically divided from the remainder of the car park, so the blocks did not constitute vertical divisions of the Estate. Practical problems arising from divided management of shared facilities reinforced that conclusion. The reasoning in Settlers Court RTM Co Ltd v FirstPort Property Services Ltd [2022] UKSC 1, [2022] 1 WLR 519 was relevant to those practical consequences, although that case concerned the extent of management of appurtenant property.

4. Independent redevelopment. Section 72(3)(b) asks whether, hypothetically, the relevant part could be redeveloped without the remainder being redeveloped at the same time. It does not require redevelopment to avoid all effects on neighbours, or to proceed without consent, support or temporary props. Whether works amount to redevelopment is a question of fact and degree. Complete demolition of every structural element is unnecessary. The court rejected reliance on the last sentence of [40] of Settlers Court RTM Co Ltd v FirstPort Property Services Ltd [2022] UKSC 1 as a gloss on this test.

5. No. 14 Park Crescent. Party walls and foundations could be addressed by a notional boundary through the existing physical division. The absence of one perfectly straight line did not prevent qualification. The premises were capable of independent redevelopment, including by use of temporary supports. No separate issue arose concerning services under section 72(4).

1. Court of Appeal (Civil Division): Both appeals dismissed. The decision of the Upper Tribunal was upheld.
2. Upper Tribunal (Lands Chamber): The RTM companies’ appeals concerning Plaza Boulevard were dismissed. The landlords’ appeal concerning No. 14 Park Crescent was also dismissed: [2025] UKUT 39 (LC).
3. First-tier Tribunal, Property Chamber: The claims concerning Plaza Boulevard were rejected. The claim concerning No. 14 Park Crescent was upheld.