RTM Company Granted Right to Manage Premises

OUTCOME: Allowed

© CROWN COPYRIGHT 2025

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00AG/LRM/2025/035 Property : [ADDRESS], London NW6 1 LT Applicant : [redacted] : [COMPANY]: [COUNSEL] Respondents : [redacted] (2) [COMPANY] : (1) [COUNSEL] [NAME], Solicitor (2) [COMPANY] of application : No Fault Right to Manage Tribunal : Judge Tagliavini

Date of Decision :

25 March 2026

DECISION

2 The tribunal’s summary decision

(1) The tribunal finds the applicant is entitled to acquire the right to manage

the premises at [ADDRESS], London NW6 1 LT with effect from

three months after the date of this decision becomes final i.e. three

months from the date when the period for appeal ends or when any

appeal (if made) is disposed of.

____________________________________________________

The application

1. This is an application under section 84(3) of the Commonhold and

Leasehold Reform Act 2002 (‘the 2002 Act’) for a decision that, on the

relevant date, the applicant [COMPANY] was entitled to acquire the

Right to Manage premises known as 349 [ADDRESS]

[POSTCODE] (‘the premises’). The first respondent is the freeholder

of the premises. The [NAME] respondent is the superior leaseholder out

of which the two residential of Flats A and B have been granted.

Background

2. The subject premises comprise a converted block of two self-contained

apartments sold on long leases, over a small commercial unit said by

the applicant to make up less than 50% of the freehold.

3. By a claim notice dated 26 August 2025, the applicant gave notice to the

[NAME] that it intended to acquire on 8 January

2026, the Right to Manage ‘the premises known as the singular

building or part of a building known as 349 [ADDRESS]

[POSTCODE] together with any appurtenant property (if any) and the infra

adjacent commercial premises(if any)" …

4. By counter notice dated 29 September 2025 the first respondent

disputed the claim alleging that the applicant has failed to establish

compliance with section 72 of the 2002 Act and stated:

1. (a) Excessive non-residential floor space

• The premises do not satisfy the conditions of section 72(1)(b) of

the 2002 Act.

• More than 25% of the internal floor area (excluding common

parts) is occupied for non-residential use, namely the ground

and basement commercial unit let to comprising approximately

107m2 (1,129 sq ft).

• The two residential flats above amount to approximately 136

m2 (1 ,464 sq ft) in total. • Accordingly, the commercial element

is approximately 44% of the internal floor area, exceeding the

statutory threshold; and

2. (b) Premises not a self-contained building

• The building is terraced and not structurally detached.

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• It shares essential structure and/or services with the adjoining

properties and is not capable of being redeveloped

independently within the meaning of section 72(2) of the 2002

Act.

• Therefore, the premises do not qualify for the right to manage.

5. No counter-notice was served by or received from or on half of the

[NAME] respondent.

6. In an Open Letter Before Action dated 10 October 2025 to the first

respondent, the applicant stated the counter-notice was invalid due to

its failure to include all statutorily required statements or provide the

address to which future communication relating to the subject matter of

the notice could be sent. In any event the applicant asserted in answer

to the first respondents objections that:

[RE] “More than 25% of the internal floor area (excluding common

parts) is occupied for non-residential use, namely the ground and

basement commercial unit let to comprising approximately 107m2

(1,129 sq ft). • The two residential flats above amount to approximately

136 m2 (1 ,464 sq ft) in total Accordingly, the commercial element is

approximately 44% of the internal floor area, exceeding the statutory

threshold”

Accordingly, your admission is that the building as a whole is 107m2

plus 136m2 = 243m2 and “the commercial element is approximately

44% of the internal floor area”

It would appear you are unaware of the amendment of the Act which

as from 3rd March 2025 increased the 25% to 50%? Therefore, by your

own calculations, the 50% limit is not reached until such time as any

residential element were to exceed 50% of 243m2 = 121.5m2 and we

note that the ground and basement commercial unit let to comprising

approximately 107m2 thereby meeting those requirements.

You may wish to refer to:

https://www.legislation.gov.uk/ukpga/2024/22/part/3/crossheading/the-right-to

manage... which you will note states;

49 - Change of non-residential limit on right to manage claims In

Schedule 6 to the Commonhold and Leasehold Reform Act 2002 (“the

CLRA 2002”), in paragraph 1(1) (non-residential limit on right to

manage claims), for “25 per cent.” substitute “50%”

Accordingly, S72(1) of the Act says;

(1) This Chapter applies to premises if—

(a) they consist of a self-contained building or part of a building,

with or without appurtenant property, (b) (c) they contain two

or more flats held by [NAME], and the total number of

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flats held by such tenants is not less than two-thirds of the total

number of flats contained in the premises.

Although you do not refer to Sections 73(2) – (5) or Schedule 6 as these

follow on from (1) these say;

(2) A building is a self-contained building if it is structurally detached.

(3) A part of a building is a self-contained part of the building if—

(a) it constitutes a vertical division of the building

(b) the structure of the building is such that it could be

redeveloped independently of the rest of the building, and

(c) subsection (4) applies in relation to it.

(4) This subsection applies in relation to a part of a building if the

relevant services provided for [NAME] of it—

(a) are provided independently of the relevant services provided

for [NAME] of the rest of the building, or

(b) could be so provided without involving the carrying out of

works likely to result in a significant interruption in the

provision of any relevant services for [NAME] of the rest of the

building.

(5) Relevant services are services provided by means of pipes, cables

or other fixed installations.

(6) Schedule 6 (premises excepted from this Chapter) has effect.

Schedule 6

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 per cent. 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.

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(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.

As to the [NAME] point, section 72(2) says;

72 (Premises to which Chapter applies

(1) This Chapter applies to premises if—

with or without appurtenant property,

(b) they contain two or more flats held by [NAME],

and

(c )the total number of flats held by such tenants is not less than

two-thirds of the total number of flats contained in the

premises.

(2) A building is a self-contained building if it is structurally

detached.

(a) it constitutes a vertical division of the building,

(b)the structure of the building is such that it could be

redeveloped independently of the rest of the building, and

(c) )subsection (4) applies in relation to it.

relevant services provided for [NAME] of it—

for [NAME] of the rest of the building, or

works likely to result in a significant interruption in the

building.

(5) Relevant services are services provided by means of pipes,

cables or other fixed installations.

There are no shared services as such with other adjoining buildings, as

opposed to being shared within the building itself, and as you seem to

suggest that as it is a terraced property it fails to meet the requirements

which, simply put, is simply incorrect as otherwise any terraced

building split into flats could not implement RTM! There are clear

vertical divisions between the adjoining premises

The purported counter-notice is not only invalid as a matter

of law, but also entirely devoid of merit.

7. On 26 November 2026, the tribunal provided the parties with Directions

in order to bring the application to a final hearing and determination. On

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23 February 2026, the tribunal gave Notice of Intention to bar the

respondents from taking any further part in the application due to their

non-compliance with these Directions. No correspondence was received

from the respondents and accordingly the Notice of Intention to debar

the respondents took effect on 11 March 2026. No response to the

assertions made by the applicant in its Open Letter were made by or

received from the respondents.

The hearing

8. As neither party requested an oral the tribunal determined the

application on the documents provided in the form of a 115 page digital

bundle.

The tribunal’s reasons

9. The tribunal finds the applicant has provided all of the necessary

documentation in respect of the [COMPANY]’s intended acquisition

of the right to manage the subject premises. The tribunal accepts the

submissions set out in the applicant’s letter together with the applicable

law and finds that the Counter-Notice served by the first respondent was

invalid due to the omission of statutorily required

statements/information. The tribunal also finds the [NAME] respondent

did not serve a counter-notice and therefore cannot be regarded as

having objected to the application seeking the right to manage the

subject premises.

10. The tribunal finds that less than 50% of the internal floor area (excluding

common parts) is occupied for non-residential use i.e. the ground and

basement commercial unit. The tribunal finds that by reason of the

amendment made by s.49 of Leasehold and Freehold Reform Act 2024.

That as from 3 March 2025 non-residential floor area was increased to a

50% threshold.

11. Further the tribunal finds there are clear vertical divisions between the

adjoining buildings and that the subject premises are premises to which

s.72(2) of the 2002 Act apply.

12. In conclusion, the tribunal finds the applicant is entitled to acquire the

right to manage the premises at [ADDRESS], London NW6 1 LT

with effect from three months after the date of this decision becomes

final i.e. three months from the date when the period for appeal ends or

when any appeal (if made) is disposed of.

Name: Judge Tagliavini

Date: 25 March 2026

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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 should be made on Form RP PTA available at https://www.gov.uk/government/publications/form-rp-pta-application-for- permission-to-appeal-a-decision-to-the-upper-tribunal-lands-chamber 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, the property 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).