Ninety Broomfield Road Rtm Co. Ltd v Triplerose Ltd

Factual and Procedural Background

This opinion addresses four appeals and one application concerning the exercise of the Right to Manage (RTM) under the Commonhold and Leasehold Reform Act 2002, specifically whether a single RTM company may exercise the right in respect of more than one self-contained building. The appeals arise from decisions of the Leasehold Valuation Tribunal (LVT) for the Eastern and Midland Rent Assessment Panels, with the matters transferred to the Upper Tribunal (Lands Chamber) for a consolidated hearing on 17 October 2013.

The cases concern residential developments comprising multiple self-contained blocks or buildings, each with different configurations of flats, titles, and management arrangements. The RTM companies sought to acquire the right to manage either multiple buildings under a single claim or via separate claims for each building. The freeholders contested the entitlement of a single RTM company to manage more than one building.

Each case involved the service of claim notices by the RTM companies, counter-notices by the freeholders, and determinations by the LVT, which in some cases dismissed the RTM claims on the basis that one RTM company cannot acquire the right to manage more than one building. Appeals and applications for determinations were brought before the Upper Tribunal for resolution of the common legal issues.

Legal Issues Presented

1. Whether an RTM company may seek and acquire the right to manage in respect of more than one self-contained building.
2. If so, whether the RTM company must serve separate claim notices in respect of each self-contained building and whether each building must have the requisite number of qualifying tenants who are members of the company.
3. If a single claim notice can cover multiple buildings, how the requisite number of qualifying tenants and members of the company are to be identified and counted for each building.

Arguments of the Parties

Appellants' Arguments

• A single RTM company can manage multiple self-contained buildings provided that the qualifying tenant membership requirements are met for each building and separate claim notices are served or a single notice clearly covering multiple buildings is served.
• The statutory provisions do not expressly prohibit one RTM company managing more than one building; the use of the singular "a building" in the statute defines premises but does not limit the number of buildings an RTM company can manage.
• Practical considerations support multi-building management by a single RTM company to avoid duplication of management entities, multiple accounts, and complicated landlord dealings.
• Decisions such as Gala Unity Ltd v Ariadne Road RTM Company Ltd implicitly support this view, as the RTM company in that case managed two buildings.
• Reference was made to guidance from the Leasehold Advisory Service and prior LVT decisions supporting multi-building RTM management.
• Comparisons with the Leasehold Reform Housing and Urban Development Act 1993 and the Landlord and Tenant Act 1987 were made to support a purposive, rather than restrictive, interpretation of the 2002 Act.

Respondents' Arguments

• Section 72 of the 2002 Act restricts the right to manage to a single self-contained building or part of a building; the singular wording is deliberate and consistent with legislative drafting practice.
• Other statutory provisions, including the model articles for RTM companies, voting mechanisms, and membership requirements, presuppose management of only one building.
• Allowing one RTM company to manage multiple buildings could lead to unfair dilution of tenant voting rights and conflicts of interest between blocks.
• There is no provision for severance or partial RTM claims; overlapping or shared appurtenant property cannot be managed by multiple RTM companies simultaneously.
• Consultation documents and draft bills indicate that RTM was intended to apply on a block-by-block basis, and multi-block RTM was considered problematic and unresolved.
• Claims that a single notice may cover multiple buildings are incorrect; separate notices are necessary to satisfy statutory requirements and provide clarity.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by examining the purpose of the RTM legislation as set out in the draft bill and consultation paper, noting the objective to enable leaseholders to take over management of their building(s) simply and effectively without proving landlord fault or paying compensation. The court emphasized the need for a purposive construction of the statutory provisions to achieve this objective, especially in cases where multiple self-contained buildings have been managed together with shared appurtenant property.

Section 72 was interpreted as defining the type of premises to which the right to manage applies (self-contained building or part thereof) but not limiting the number of such premises that may be managed by a single RTM company. The court rejected the argument that the singular "a building" restricts RTM to only one building, viewing this as a definitional rather than restrictive provision.

The court accepted that qualifying tenant membership and other statutory conditions must be satisfied separately for each building or set of premises. However, it found no statutory bar to an RTM company exercising the right over multiple buildings, provided these conditions are met for each.

Regarding claim notices, the court concluded that while separate notices for each building may be clearer, a single notice covering multiple premises is permissible if sufficiently clear and compliant with statutory requirements.

The court addressed concerns about overlapping or shared appurtenant property, concluding that multiple RTM companies may exercise rights over shared property, resulting in dual management responsibilities, which, although potentially inconvenient, is not precluded by the statute or case law.

The court distinguished the RTM regime from collective enfranchisement legislation, rejecting reliance on the latter’s more restrictive interpretations. It also found that the consultation documents, while informative, did not conclusively limit RTM to single buildings.

Overall, the court favored a practical and purposive approach consistent with the legislative objective of empowering leaseholders to manage their properties effectively, even where multiple self-contained buildings are involved.

Holding and Implications

Holding:

• The appeals of Ninety Broomfield Road RTM Company Ltd and Garner Court RTM Company Ltd were allowed, confirming that a single RTM company is entitled to exercise the right to manage in respect of multiple self-contained buildings as specified in their claim notices.
• The Holybrook RTM Company Ltd application was remitted to the First-tier Tribunal for reconsideration in light of this decision.
• The appeal of Sinclair Gardens Investments (Kensington) Ltd was dismissed, confirming the LVT decision in that case.

Implications: This decision clarifies that the RTM regime under the 2002 Act permits a single RTM company to manage more than one self-contained building, provided qualifying conditions are met for each building and claim notices are appropriately served. It resolves ambiguity about the interpretation of "premises" and supports a purposive construction aligned with the legislation’s objectives. The ruling facilitates streamlined management of estates with multiple blocks, potentially reducing administrative burdens and duplicative management entities. No new precedent was set beyond the clarification of these statutory interpretations, and the decision recognizes that practical management challenges may remain but are not grounds for restricting RTM rights.