The Commonhold and Leasehold Reform Act 2002 enables qualifying leaseholders of flats to manage their buildings using a right to manage company established specifically for that purpose. The legislation permits leaseholders to take responsibility for management without having to prove mis-management by their landlord. However, few landlords enjoy being relieved of their management responsibilities. Consequently, applications are often contested on legal or procedural grounds.
One of the conditions that must be satisfied for the legislation to apply is that the premises must consist of a self-contained building or part of a building that can be serviced independently. No 1 Deansgate (Residential) Ltd v No 1 Deansgate RTM Company Ltd [2013] UKUT 0580 (LC) deals with an important point that does not appear to have been addressed in the authorities to date.
No 1 Deansgate is a mixed commercial/residential development in Manchester, containing 82 flats and five commercial units at ground floor level. It was constructed as a stand-alone building before the surrounding properties were built. When the surrounding properties were built, the builders introduced weathering features, which were not of a structural nature, between the new buildings and No 1 Deansgate to keep water out. As a result No 1 Deansgate became connected to the adjoining properties.
The landlord argued that the building was not a “self-contained building” because it was not “structurally detached”, as is required by section 72(2) of the 2002 Act. It quoted the views expressed in several legal textbooks and cited the House of Lords’ decision in Parsons v Henry Smith’s Charity [1974] 1 WLR 435. Parsons concerned the meaning of the words “structurally detached” in section 2 of the Leasehold Reform Act 1967 and established that the expression “structurally detached” meant “detached from any other structure”. Therefore, once there is any form of attachment between a building and another structure, the building ceases to be structurally detached for the purposes of the legislation.
The Lands Chamber of the Upper Tribunal rejected the landlord’s arguments. It ruled that the 1967 Act and 2002 Act were different creatures. Parliament had passed building regulations that used the phrase “wholly detached” and could have used the same phrase in the 2002 Act, had it wished to do so. Therefore, the word “structurally” must affect or qualify the meaning of the word “detached”.
The landlord’s interpretation was absurd and would mean that any slight touching or connection between buildings would exclude both buildings from the right to manage scheme. It was no answer to say that the buildings might then qualify under the limb of the legislation that deals with parts of buildings. The judge doubted whether such buildings could properly be described as “part” of buildings for the purposes of the right-to-manage provisions.
The Leasehold Valuation Tribunal had ruled that the weathering attachment was not of a structural nature. Therefore, the building was within the ambit of the right-to-manage scheme.
Allyson Colby is a property law consultant
