First-tier Tribunal Grants Tenants Right to Manage Properties

OUTCOME: Allowed

DECISION © CROWN COPYRIGHT

FIRST-TIER TRIBUNAL [NAME] CHAMBER ([NAME])

Case Reference

:

LON/00AS/LRM/2024/0015

[NAME]

: (1) [ADDRESS] [POSTCODE] (2) [ADDRESS] [POSTCODE]

Applicant

: [redacted] [ADDRESS] Company [COMPANY] (company no. 15201995) (2) [ADDRESS] Company [COMPANY] (company no. 15202221)

Representative

:

[COUNSEL], director [RESPONDENT]

Respondent 1

:

[RESPONDENT] ([NAME])

Representative

:

[RESPONDENT]

Respondent 2 : [RESPONDENT] (formerly known as [COMPANY]) (Manager)

Type of Application

:

Determination of Acquisition of Right to Manage Section 84(3) of the Commonhold and Leasehold Reform Act 2oo2 (“2002 Act”)

Tribunal Member(s)

:

Judge Tildesley OBE

Date and venue of the Hearing

:

On the Papers without a hearing

Date of Decision

:

25 June 2025

2 Summary of Decision

The Tribunal determines that Applicant (1) was on the 21 November 2023 entitled to acquire the right to manage [ADDRESS] [POSTCODE]. The date of acquisition will be three months after this determination becomes final (section 90(4) of the 2002 Act.

The Tribunal determines that Applicant (2) was on the 21 November 2023 entitled to acquire the right to manage, [ADDRESS] [POSTCODE]. The date of acquisition will be three months after this determination becomes final (section 90(4) of the 2002 Act.

Senior President of Tribunals Practice Direction: Reasons for Decisions 4 June 2024

1. This Practice Direction states basic and important principles on the giving of written reasons for decisions in the First-tier Tribunal. It is of general application throughout the First-tier Tribunal. It relates to the whole range of substantive and procedural decision- making in the Tribunal, by both judges and non-legal members.

Accordingly, it must always be read and applied having regard to the particular nature of the decision in question and the particular circumstances in which that decision is made (paragraph 1).

2. Where reasons are given, they must always be adequate, clear, appropriately concise, and focused upon the principal controversial issues on which the outcome of the case has turned. To be adequate, the reasons for a judicial decision must explain to the parties why they have won and lost. The reasons must enable the reader to understand why the matter was decided as it was and what conclusions were reached on the main issues in dispute. They must always enable an appellate body to understand why the decision was reached, so that it is able to assess whether the decision involved the making of an error on a point of law. These fundamental principles apply to the tribunals as well as to the courts (paragraph 5).

3. Providing adequate reasons does not usually require the First-tier Tribunal to identify all of the evidence relied upon in reaching its findings of fact, to elaborate at length its conclusions on any issue of law, or to express every step of its reasoning. The reasons provided for any decision should be proportionate, not only to the resources of the Tribunal, but to the significance and complexity of the issues that have to be decided. Reasons need refer only to the main issues and evidence in dispute, and explain how those issues essential to the Tribunal’s conclusion have been resolved (paragraph 6).

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4. Stating reasons at any greater length than is necessary in the particular case is not in the interests of justice. To do so is an inefficient use of judicial time, does not assist either the parties or an appellate court or tribunal, and is therefore inconsistent with the overriding objective. Providing concise reasons is to be encouraged. Adequate reasons for a substantive decision may often be short. In some cases a few succinct paragraphs will suffice. For a procedural decision the reasons required will usually be shorter (Paragraph 7).

Application

5. On 20 February 2024 [NAME] applied jointly under section 84(3) of the 2002 Act for a decision that, on the relevant date, [NAME] was entitled to acquire the right to manage [ADDRESS] [POSTCODE] (Premises 1) and [NAME] was entitled to acquire the right to manage [ADDRESS] [POSTCODE] (Premises 2).

6. On 21 November 2023 [NAME] served a claim dated 14 November 2023 giving notice that it intended to acquire the right to manage Premises 1 on 25 March 2024.

7. On 21 November 2023 [NAME] served a claim dated 14 November 2023 giving notice that it intended to acquire the right to manage Premises 2 on 25 March 2024.

8. On 18 December 2023 Respondent 1 (the [NAME]) served a separate counter notice for each Premises admitting that the Applicants were entitled to acquire the right to manage their respective premises.

9. On 22 December 2023 Respondent 2 (the Manager) served a separate counter notice for each Premises denying that the Applicants were entitled to acquire the right to manage their respective premises. The reason given for the denial was the same for both Premises, which was that each Premises was not a self- contained building or part of a building by reason section 72(1) to (5) of the 2002 Act but in particular subsections (4) and (5).

10. On 27 February 2024 Respondent 2’s [NAME] Manager requested further details of the Applicants’ cases. The Applicants supplied a copy of Counsel’s opinion on whether the buildings were structurally detached for the purposes of section 72 of the 2002 Act. In Counsel’s opinion each Premises was structurally detached, notwithstanding the shared used of the utilities provided by the heating system, and that the heating plant itself was located in the Hinds Building.

4 11. Around May 2024 Respondent 2’s solicitors contacted the Applicant’s representative by telephone indicating that Respondent 2 would be withdrawing its opposition to the RTM claim in the light of Counsel’s opinion.

12. From May 2024 to March 2025 the Applicants and Respondent 2 were in discussions about the Right to Manage and a way forward in respect of the shared services. Unfortunately no agreement was reached.

13. On 18 March 2025 the Applicants’ representative contacted the Tribunal about the Application. The Tribunal advised that the fee which had been paid on 28 March 2024 had not been reconciled to the account. This was rectified.

14. On 18 March 2025 the Tribunal directed that the Application should be determined on the papers without an oral hearing unless a party requested a hearing by 22 April 2025. No such request was made. The Tribunal agreed that the Application by each Applicant could be heard together. The Tribunal stated that the Applications together with the enclosures would constitute the Applicants’ cases. The Respondents were required to supply their cases by 14 April 2025, and various rights of reply were given to the parties. The Tribunal required the Applicants to provide the hearing bundle by 9 June 2025. The Tribunal indicated that it would decide the Application during the seven days commencing 23 June 2025 using the document bundle provided.

15. The Tribunal has considered the documents in the hearing bundle which was supplied by the required date. [COUNSEL], the Applicants’ representative, provided a detailed witness statement on behalf of the Applicants dated 9 June 2025. The bundle included, amongst other matters, photographs of the estate and buildings and the opinion of Counsel.

16. On 20 March 2025 Respondent 1 (the [NAME]) informed the Tribunal that it had admitted the Applicants’ rights to manage their respective premises, and that it would be taking no further part in the proceedings.

17. Respondent 2 did not respond to the Tribunal directions despite various emails from the Applicants’ representative encouraging it to either respond or reach agreement.

Consideration

18. The sole issue in this case is whether the respective premises are self-contained buildings within the meaning of section 72 of the 2002 Act.

19. The Tribunal finds the following facts:

5 1) [ADDRESS] is a detached purpose built block of flats comprising 66 self-contained flats. Hinds Courts is a detached purpose built block of flats comprising 39 self- contained flats.

2) Specimen leases were exhibited for one flat in each block. The Tribunal understands that the leases of the other flats in the two blocks are in the same form. The leases have been granted for a term of 125 years commencing on 1 January 2016.

3) [ADDRESS] and [ADDRESS] are located on a development which was completed around 2017. The estate includes the two blocks of flats which are the subject of this application, private roads and amenity areas together with other flats and some freehold houses.

4) [ADDRESS] and [ADDRESS] share a combined heat and power system that serves the two blocks but no other part of the estate. The two blocks have been managed together since they were built, and budgets have included a combined service charge budget for both blocks which apportioned costs between the 105 flats.

20. Section 72 subsection (2) states that a building is a self-contained building if it is structurally detached. Subsections (4) and (5) add the “relevant services test” which only applies if the RTM application refers to a self-contained part of a building. In this Application the Tribunal is dealing with two whole buildings not a self-contained part of a building. Thus the Tribunal only has to be satisfied that [ADDRESS] and [ADDRESS] are structural detached in order to meet the requirement of self-contained buildings.

21. The Tribunal has found that [ADDRESS] and [ADDRESS] are detached buildings which is supported by the Applicants’ witness statement and photographs. Respondent 2 has not submitted a case explaining why it does not consider that the Premises meet the self- contained building test.

22. The Applicants have proceeded on the basis that Respondent 2’s objection is related to the shared heating system. Counsel in her opinion relied on the Upper Tribunal case in [COMPANY] v [NAME] [COMPANY] [2018] UK UT 183 for the meaning of “structurally detached”. [COUNSEL] referred specifically to paragraph 54 of the decision where HH Judge Hodge KC set out a range of propositions on the meaning of structurally detached. [COUNSEL] placed emphasis on the propositions: “ ‘Structural’ in this context means ‘appertaining or relating to the essential core fabric of the building’ ”, and “a building can be

6 ‘structurally detached’ even if it cannot function independently”. [COUNSEL] considered that the combined heat and power plant cannot be described as part of or relating to the essential or core fabric of the building. [COUNSEL] concluded that in her opinion the [ADDRESS] and [ADDRESS] buildings are structurally detached notwithstanding their shared use of utilities provided by the common heating system located in the Hinds Building. The Tribunal adopts Counsel’s opinion and agrees that the shared heating system has no relevance to the question of whether the premises are structurally detached.

23. The Tribunal decides that [ADDRESS] and [ADDRESS] are structurally detached and meet the definition of self-contained buildings. As there are no other objections to the Applicants’ claim for right to manage the Premises, the Tribunal is satisfied that they are entitled to acquire the right to manage [ADDRESS] and [ADDRESS].

24. The Supreme Court in [COMPANY] v [COMPANY], [2022] 1 W.L.R. 519 established that “where a right to manage company took over the management of a block of flats which formed part of a larger estate containing other blocks, the Commonhold and Leasehold Reform Act 2002 Pt 2 Ch.1 did not provide for the RTM company to manage estate facilities shared by the blocks. The RTM company was concerned only with management of the relevant premises, namely the relevant building or part of a building, together with any appurtenant [NAME], which meant nearby physical [NAME] over which the occupants of the relevant building or part had exclusive rights”.

25. The Applicants in their witness statement set out a range of concerns with the management of the shared heating system and have sought to strike a separate agreement without success to manage the system on behalf of Respondent 2. The Applicants accept that the Tribunal has no jurisdiction regarding the making of a separate agreement and that the shared heating system remains the responsibility of Respondent 2.

26. The Tribunal concludes that the scope of the Applicants’ right to manage applies to the buildings of [ADDRESS] and [ADDRESS] and appurtenant [NAME] which exclusively serve each block including the demised parking spaces. Any areas serving both blocks, such as the communal bin store and cycle stores will remain under the management of Respondent 2, along with the shared access road, green space and shared heating system.

27. The Applicants have requested a new acquisition date of 1 July 2025 given the efforts that they have made to reach agreement with Respondent 2 and the delays already experienced including the fact that the payment of the Tribunal fee for the hearing was not allocated to the case until March 2025. Although the Tribunal is

7 sympathetic to the Applicants’ request, the Tribunal considers that it is bound by the wording of section 90(4) of the 2002 Act, namely the acquisition date is the date three months after the determination becomes final. The Applicants have pointed to no authority which permits the Tribunal to depart from the requirements of section 94(4).

Decision

28. The Tribunal determines that Applicant (1) was on the 21 November 2023 entitled to acquire the right to manage [ADDRESS] [POSTCODE]. The date of acquisition will be three months after this determination becomes final (section 90(4) of the 2002 Act.

29. The Tribunal determines that Applicant (2) was on the 21 November 2023 entitled to acquire the right to manage, [ADDRESS] [POSTCODE]. The date of acquisition will be three months after this determination becomes final (section 90(4) of the 2002 Act.

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RIGHTS OF APPEAL

1. A person wishing to appeal this decision to the Upper Tribunal ([NAME]) must seek permission to do so by making written application to the First-tier Tribunal at the [NAME] which has been dealing with the case.

2. The application must arrive at the Tribunal within 28 days after the Tribunal sends to the person making the application written reasons for the decision.

3. If the person wishing to appeal does not comply with the 28 day time limit, the person shall include with the application for permission to appeal a request for an extension of time and the reason for not complying with the 28 day time limit; the Tribunal will then decide whether to extend time or not to allow the application for permission to appeal to proceed.

4. The application for permission to appeal must identify the decision of the Tribunal to which it relates, state the grounds of appeal, and state the result the party making the application is seeking.