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Assethold Ltd v Eveline Road RTM Co Ltd [2024] EWCA Civ 187
Lewison, Phillips, Andrews LJJ
By Part 2, Chapter 1, Commonhold and Leasehold Reform Act 2002, qualifying long leaseholders of flats are entitled to establish and join a “Right to Manage Company” (“RTM Company”) through which they may take over management of “Premises” containing their flats. “Premises” means either a “self-contained building” or a “self-contained part of a building.” A building is a self-contained building if it is structurally detached. A building is a self-contained part of a building if it is capable of vertical severance from the remainder, can be redeveloped independently and has its own service media (pipes for water, electricity supply, etc) (s.72). Disputes concerning the entitlement of the RTM Company to acquire the Right to Manage are heard in the First-Tier Tribunal (in Wales, the Leasehold Valuation Tribunal) (s.84).
The respondent RTM company sought to acquire the right to manage a property. The property was at the far end of a terrace and contained four flats. From the street, the property appeared to be a pair of semi-detached houses, with each house having different external decoration.
The RTM company contended that the property as a whole comprised “premises” to which the 2002 Act applied because it was a self-contained party of a building: it could be severed from the remainder of the terrace; it could be redeveloped without affecting the remainder of the terrace; and, its service media served only those four flats.
The appellant was the freeholder. It contended that each of the pair of semi-detached houses was itself a “self-contained part of a building”; each part could be severed from the other (and the wider terrace), each part could be redeveloped without affecting the other or the remainder of the terrace; and, the service media for each part were separate from each other (and the wider terrace).
The appellant relied on Ninety Broomfield Road RTM Co Ltd v Triplerose Ltd [2015] EWCA Civ, [2016] 1 WLR 275 for the proposition that an RTM company could only manage one “premises” and that the purpose of the 2002 Act was to give leaseholders control only over the building containing their homes. In response, the RTM company pointed to 41-60 Albert Mansions Ltd v Craftrule Ltd [2011] EWCA Civ 185, [2011] 1 WLR 2425, where similarly worded provisions in the Leasehold Reform, Housing and Urban Development Act 1993 were held to permit the leaseholders to chose any configuration of “premises” to enfranchise, i.e. there was no requirement to enfranchise only the smallest unit, and argued the same approach should apply to the RTM.
The FTT and UT each found for the respondent but the UT granted permission to appeal to the Court of Appeal.
The Court of Appeal has dismissed the appeal. Nothing in the 2002 Act required an RTM company to claim the smallest possible configuration of “premises”. The Ninety Broomfield Road case concerned multiple blocks on an estate and its reasoning did not transpose directly into a case about a terrace. The approach under the 1993 Act (41-60 Albert Mansions Ltd v Craftrule Ltd) was equally applicable to the 2002 Act.
Justin Bates and Kate Traynor appeared for the appellant. Justin also appeared in the Upper Tribunal. The judgment can be found here.
