First-tier Tribunal Rules in favour of RTM Company at Fourways House

OUTCOME: Allowed

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference :

LON/00BD/LRM/2025/0037 Property : [NAME], [ADDRESS], [POSTCODE] Applicant : [redacted] : [RESPONDENT] Respondent : [redacted] : [RESPONDENT] of application : Application in relation to the denial of the Right to Manage under s.84(3) of the Commonhold and Leasehold Reform Act 2002 Tribunal member : [NAME] : 10 [ADDRESS] [POSTCODE] Date of decision : 27 May 2027 27 May 2026 Amended by Ms [NAME] (Legal Officer)

DECISION

1. On 20 January 2026, [COMPANY] was entitled to acquire the right to manage [NAME] pursuant to section 84(5)(a) of the Act, and the Applicant will acquire such right three months after this determination becomes final.

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Background 2. On 31 October 2025, the tribunal received an application under section 84(3) of the Commonhold and Leasehold Reform Act 2002 ("the Act") for a decision that, on the relevant date, [COMPANY], was entitled to acquire the Right to Manage premises known as [NAME], [ADDRESS], Whitton, London [POSTCODE] (“[NAME]”).

3. [NAME] is a three storey building, comprising three retail units on the ground floor and seven flats on the first and second floors.

4. By a claim notice dated 28 August 2025 the Applicant gave notice that it intends to acquire the Right to [NAME] on 20 January 2026.

5. By counter notice dated 6 October 2026 the Respondent freeholder disputed the claim alleging that the Applicant has failed to establish compliance with section 72(6) of the Act, due to the non-residential proportion of [NAME]. The counter notice was served by [NAME] Solicitors, with confirmation that they represented the Respondent.

6. The tribunal issued directions on 26 November 2025, having identified a single issue to be decided, namely whether on the relevant date, the Applicant was entitled to acquire the Right to [NAME] specified in the notice.

7. On 12 January 2026 [NAME] [NAME] sent a statement of case on behalf of the Respondent to the tribunal and applied for permission to rely on expert evidence in respect of the floor areas of [NAME].

8. On 2 February 2026, the tribunal issued amended directions permitting the Respondent to rely on an expert report in respect of the floor areas, which was to be emailed to the Applicant by 2 March 2026. The deadline for the Applicant’s reply was extended to 30 March 2026 to enable it to respond to the expert report.

9. On 6 March 2026, [APPELLANT] Solicitors notified the tribunal and the Applicant that it was no longer instructed to represent the Respondent and that [COUNSEL] should be substituted as the Respondent’s representative. The tribunal has had no further engagement from or on behalf of the Respondent.

10. The directions provided that either party may request a hearing. Neither party did so. The tribunal has therefore determined the application on the bundle provided by the Applicant comprising 217 pages.

The law

3 11. The law relevant to this application is Paragraph 1 of Schedule 6 of the Act:

Buildings with substantial non-residential parts

(1) This Chapter does not apply to premises falling within section 72(1) if the internal floor area— a) of any non-residential part, or b) (where there is more than one such part) of those parts (taken together), exceeds 50% of the internal floor area of the premises (taken as a whole).

(2) A part of premises is a non-residential part if it is neither— a) occupied, or intended to be occupied, for residential purposes, nor b) comprised in any common parts of the premises.

(3) Where in the case of any such premises any part of the premises (such as, for example, a garage, parking space or storage area) is used, or intended for use, in conjunction with a particular dwelling contained in the premises (and accordingly is not comprised in any common parts of the premises), it shall be taken to be occupied, or intended to be occupied, for residential purposes.

(4) For the purpose of determining the internal floor area of a building or of any part of a building, the floor or floors of the building or part shall be taken to extend (without interruption) throughout the whole of the interior of the building or part, except that the area of any common parts of the building or part shall be disregarded. The Respondent’s case 12. In its statement of case [52-53], the Respondent set out that it considered there were reasonable grounds to consider that the total internal floor area of the ground floor retail units exceeds 50% of the internal floor area of [NAME]. This would mean that [NAME] was not one where the Right to Manage could be acquired due to the provisions of Paragraph 1 of Schedule 6 of the Act.

13. In support of this contention it appended a report prepared by [NAME] prepared in November 2023 for the purpose of a reinstatement cost valuation for insurance purposes [174-183]. The report sets out that the total gross internal area of the ground floor is 223 sq m. This is 41% of the total floor area of [NAME] being 541 sq m.

14. Whilst this is less than 50% of the total floor area of [NAME], the Respondent argued that the measurements do not disregard the common

4 parts of the building and that it is arguable the commercial element exceeds the threshold permissible by law.

15. The Respondent sought to rely on an expert report providing a measured survey. This request was granted by the tribunal, however, the Respondent served no such report in accordance with the tribunal’s amended directions. The Applicant’s case

16. The Applicant’s application [33-47] states that based on the floor areas in the EPC for [NAME], the residential parts comprise more than 50% of the total floor area. The residential element is identified as 303 sq m and the commercial as 188 sq m.

17. In its statement of case in reply dated 30 January 2026 [187-188], the Applicant appends a report by an independent surveyor [190-206]. The report sets out the findings of a full measured survey of [NAME] conducted by [COMPANY]. The total gross internal area of [NAME] excluding communal areas is 511.72 sq m, comprising 301.15 sq m of residential and 210.57 sq m of commercial. The commercial element is 41.15% of the total floor area. Reasons 18. The single issue before the tribunal is whether the residential parts of [NAME] comprise more than 50% of the total floor area.

19. Having put this fact in issue, the Respondent was given the opportunity to submit an expert report, but failed to do so. The Respondent has therefore failed to make out their case that the commercial parts of [NAME] comprise more than 50% of the floor areas and the building therefore falls within Paragraph 1 of Schedule 6 of the Act.

20. The Applicant has provided a measured survey, which support their contention that the residential parts comprise more than 50% of the total floor area. The Applicant did not have permission to rely on this report, nevertheless, as stated in paragraph 18 above, the tribunal is satisfied that the Respondent has not made out their argument in respect of the floor areas.

21. The areas in the reinstatement valuation report submitted by the Respondent and the EPC figures in the Applicant’s application are similar in proportion, with the commercial parts comprising approximately 40% of the total floor area. There is no evidence in front of the tribunal to suggest the commercial elements of [NAME] exceeds 50% of the internal floor area.

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22. The tribunal finds that the residential parts of [NAME] comprise more than 50% of the total floor area.

23. The tribunal therefore determines the Applicant was entitled to acquire the Right to [NAME] and will acquire this right three months after this determination becomes final.

Name: [NAME]: 27 May 2026

Rights of Appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, the tribunal is required to notify the parties about any right of appeal they may have. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written application for permission must be made to the First- tier Tribunal at the regional office which has been dealing with the case. The application for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the person making the application. If the application is not made within the 28 day time limit, such application must include a request for an extension of time and the reason for not complying with the 28 day time limit; the tribunal will then look at such reason(s) and decide whether to allow the application for permission to appeal to proceed, despite not being within the time limit. The application for permission to appeal must identify the decision of the tribunal to which it relates (i.e. give the date, [NAME] and the case number), state the grounds of appeal and state the result the party making the application is seeking. If the tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).