Right to manage – Commonhold and Leasehold Reform Act 2002 – Self-contained building – Respondent RTM company seeking right to manage two blocks of flats within larger development owned by appellant – Right to manage held to be established in relation to buildings plus common parts for which service charge payable under leases of flats – Section 72(1)(a) and 72(2) of 2002 Act – Whether each block a “self-contained building” – Whether common parts comprising “appurtenant property” to which right to manage extending – Appeal dismissed
The respondent RTM company served two notices on the appellant landlord, under section 79 of the Commonhold and Leasehold Reform Act 2002, seeking to acquire the right to manage two blocks of flats within a development on behalf of the tenants. In addition to the two blocks, the development included two freestanding “coach houses”, comprising first-floor flats with parking spaces beneath, plus further residents’ parking and “estate common parts” that included footpaths, roads, visitor parking, grassed areas and a bin area. The lease of each flat included the use of a car port or parking space and the right to use the common parts, with service charges payable for those facilities.
By its counternotices, the appellant asserted that the two blocks were not self-contained buildings or parts of buildings, as required by section 72(1)(a). It submitted that although the blocks were structurally detached, they could not be described as “self-contained” since they could not function independently from the rest of the development, relying as they did on shared facilities such as the access road and visitor parking spaces; moreover, the parking spaces demised with several of the flats lay underneath the coach houses.
The leasehold valuation tribunal (LVT) made a declaration, under section 84, that the respondent was entitled to acquire the right to manage pursuant to its notices. Upholding that decision, the Lands Chamber of the Upper Tribunal held that each of the two blocks was a self-contained building, being “structurally detached” within the meaning of section 72(2), and that the right to manage applied to those buildings plus such appurtenant property as they might have, which included the carport or parking space demised with each flat in those blocks and the various incorporeal rights of way and other rights granted by the tenants’ leases: see [2011] UKUT 425 (LC); [2012] 1 ELGR 99. The appellant appealed.
Held: The appeal was dismissed.
Each of the two blocks was a “self-contained building” for the purpose of section 72(1)(a). The Act defined a self-contained building, in section 72(2), by reference to it being “structurally detached”. Each of the two blocks was structurally detached and there was no justification for imposing a further requirement that the structurally detached building be able to function independently, without the need to make use of any shared facilities such as private access roads, car parking, gardens or other communal areas.
There was no requirement, under section 72(1)(a), that “appurtenant property” should be exclusively appurtenant to the self-contained building that was the subject of the right to manage. Appurtenant property, as defined by section 112(2), included appurtenances belonging to or usually enjoyed with the building or flat, part of a building; appurtenances such as gardens or yards were often so enjoyed. In ordinary language, the carports or parking spaces included in the leases of the flats in the two blocks “belonged to” those flats, while the bin area, access road and gardens, and other “estate common parts” over which the tenants were given rights in common with others under the terms of their leases, were “enjoyed with” those flats. The fact that the occupiers of other property, namely the coach houses, also enjoyed those appurtenances did not mean that they fell outside the section 112(1) definition.
Although that result raised the prospect of dual responsibility for the management of some of the appurtenant property, with the potential for duplication of management effort and conflict between the “old” management company and the new RTM company in respect of it, those consequences were not so grave, and the result was not so manifestly absurd, as to justify adding a gloss to the words “appurtenant property”, which were already defined in the Act. It was always open to parties, if they sought to avoid duplication and conflict, to reach an agreement that would make economic sense for all involved.
Brian McGurk, director of the appellant, appeared for the appellant; Elllie Cameron-Daum, company secretary of the respondent, represented the respondent.
Sally Dobson, barrister
