The owner of a block of flats has won a court declaration that it is entitled to add a new flat on its roofspace, despite objections raised by the managing agent of the building and the lessees of what is currently the top floor flat.
However, the ruling – the first known decision on whether a right to manage company can prevent a developer from building on premises under its control – will soon come under challenge as Recorder Morgan granted permission for a “leapfrog” appeal straight to the Court of Appeal.
The Recorder said that the dispute “puts into sharp focus the conflict between the rights of a landlord to build on his own property, the rights of a tenant to quiet enjoyment and the rights of a right to manage company acquired pursuant to the Commonhold and Leasehold Reform Act 2002,” and that in respect of the conflict between the landlord and the RTM company, there is “no direct (and little by the way of indirect) authority on the point”.
The Recorder granted a declaration that owner Francia Properties is entitled to develop a new flat on the roof space of The Optic, 2A Rochelle Close, SW11.
Susan and Nabie Suma, lessees of Flat 8, had argued that the construction works would be a breach of their covenant of quiet enjoyment, while the building’s RTM company claimed that the proposal would unlawfully interfere with its management functions.
However, the Recorder ruled that the Sumas’ lease does not prevent the building of a new flat, and would not constitute a breach of the covenant for quiet enjoyment.
And he said: “On a proper interpretation of the 2002 Act, the appointment of the company as the RTM company for the building does not, of itself, prevent the claimant from building the new flat on the roof.”
However, he said that Francia’s right is “not untrammelled” and that it is required to take all reasonable steps to minimise the disturbance to the management functions of the RTM company both during and after the works.
Michael Walsh, of Tanfield Chambers, who acted for Francia Properties, said: “This case brings some much-needed clarity on the powers of a right to manage company under the 2002 Act in circumstances where the landlord wishes to develop its property. The court has made it clear that the Act was not intended to deprive a landlord from doing so where the property is managed by an RTM company. Landlords will undoubtedly welcome this decision, which protects their right to develop retained property, whilst allowing the tenants to manage their block through an RTM company.”
However, Jonathan Upton, also of Tanfield Chambers, who represented the RTM company and the lessees, said: “There is a clear conflict between a landlord’s right to develop its retained property and the exercise of management functions acquired by a RTM company under the 2002 Act. It is hoped that the Court of Appeal will give some much-needed guidance on how such conflicts are to be resolved in practice.”
Francia Properties Ltd v Aristou and ors Central London County Court (Recorder Morgan).
Michael Walsh (acting by way of Direct Access Instruction) for the claimant.
Jonathan Upton (instructed by Judge & Priestley LLp Solicitors) for the 8th and 9th defendants.
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