Summary of Judgment (Anonymised)

Factual and Procedural Background

This judgment concerns two appeals from decisions of the Upper Tribunal (Lands Chamber) ("the UT") arising from separate First-tier Tribunal (Property Chamber) ("the FTT") determinations about acquisition of the statutory right to manage under Chapter 1 of Part 2 of the Commonhold and Leasehold Reform Act 2002 ("the 2002 Act").

Appeal A (the "Estate appeal"): three tenant-management companies (collectively "Appellant Group A") sought the right to manage three separate, modern blocks within a larger multi-block residential development ("the Estate"). The FTT held none of the blocks was a "self-contained part of a building" under section 72(3); the UT agreed with the ultimate conclusion and dismissed Appellant Group A's appeals. The only active respondent at this appeal stage was a long-headleaseholder of one block ("Respondent Company D").

Appeal B (the "Terrace/Mews appeal"): an RTM company ("Respondent Company F") claimed the right to manage a terraced property and associated mews ("No. 14"). The FTT upheld the claim; the UT dismissed the landlords' appeal. The landlords appealed to the Court of Appeal; the matter was heard together with Appeal A.

Legal Issues Presented

1. Whether the premises over which the right was claimed constitute a "self-contained part of a building" within the meaning of section 72(3) of the 2002 Act—in particular the meaning and test for "vertical division" (section 72(3)(a)).
2. Whether the structure of the building is such that the claimed part "could be redeveloped independently of the rest of the building" (section 72(3)(b)): the scope and meaning of "independently" and the factual approach to hypothetical redevelopment.
3. Whether the services for the claimed part are or could be provided independently without significant interruption to others (section 72(4)) and the practical consequences of shared appurtenant facilities for the right to manage.

Arguments of the Parties

Appellant Group A (Estate claimants)

• Section 72 provides an exhaustive statutory definition of "self-contained part" satisfied by drawing notional vertical dividing lines (extendable into the basement) so each block is a self-contained part.
• Division can be achieved by notional lines on plans; third-party rights and shared use do not alter the physical test.
• Practical division of car park management is feasible and the statute permits divided management; the statutory regime should be construed to afford RTM rights to tenants where possible.

Respondent Company D (Estate landlord)

• The undivided, open-plan basement car park that extends beneath the blocks prevents an actual vertical division of the building; the claimed basement areas are not "self-contained" in ordinary sense.
• Dividing the car park would create impractical dual management and funding problems; the UT's reliance on practical workability and on analogous reasoning in higher authority was correct.
• Projections (parapet, balconies) and structural interdependence with podium/staircase support the conclusion that the blocks are not self-contained parts.

Appellant Group B (No. 14 landlords)

• The claimed premises cannot be a vertical division because foundations and other structural elements span under neighbouring properties; a single straight vertical line is required and is not present.
• "Independently" in section 72(3)(b) requires the ability to redevelop without needing consent/support of neighbours or materially affecting them; shared foundations and structural interdependence defeat that test.
• Temporary supports should not be treated as satisfying the independence requirement; the test demands exclusivity sufficient to make a true standalone redevelopment possible.

Respondent Company F (No. 14 RTM claimant)

• A self-contained part can have more than one vertical dividing line; the statute does not require a single straight line.
• Foundations belonging in whole to the claimed premises is not decisive; the statutory tests are physical and ownership is irrelevant; redevelopment in practice often requires temporary supports.
• Independent redevelopment is a question of fact and degree; the FTT's finding that No. 14 could be independently redeveloped was sustainable.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Case A ([2022] UKSC 1; [2022] 1 WLR 519)	Construction of the 2002 Act to avoid impractical shared management of undivided estate facilities; emphasis that qualification tests are physical.	The court relied on Case A's practical considerations to support the UT's conclusion that an undivided car park is inconsistent with a self-contained part for RTM purposes.
Case B ([2005] EWCA Civ 324; [2006] 1 WLR 1186)	Purposive approach favouring effective exercise of statutory rights by tenants where appropriate.	Court acknowledged the purposive point but applied it within the statutory text and practical limits; it did not override the physical-test conclusions.
Case C ([2020] EWCA Civ 371; [2020] QB 890)	Consideration of airspace and the character of vertical division; discussion of deviations from vertical lines.	The court noted Case C but preferred the UT's approach on parapet/projection issues and did not adopt a strict single-line rule to defeat the claimed divisions in the cases before it.
Case D ([2024] EWCA 187; [2024] Ch 204)	Authority that the qualifying tests in the 2002 Act are physical and that case law on the 1993 Act is relevant.	The court followed the physical-test principle set out in Case D when distinguishing ownership issues from structural tests and when rejecting arguments based on ownership of foundations.
Case E ([2020] EWHC 920; [2020] L&TR 12)	Shared underground car park in a multi-block development cannot be treated as separate self-contained buildings when the sub-structure is continuous and undivided.	The court drew support from Case E for the conclusion that an undivided shared car park weighs against treating individual blocks as self-contained parts.
Case F ([2003] UKHL 20)	Statutory construction principle: avoid constructions producing absurd/unworkable consequences.	The court invoked Case F's approach to prefer a sensible, practicable reading of section 72 consistent with legislative purpose and practical management realities.
Case G ([2012] UKSC 41; [2012] 1 WLR 2664)	Purposive reading of enfranchisement/right-to-manage style statutes within sensible limits.	The court applied the balanced purposive approach from Case G when weighing tenant-benefit considerations against practical impediments.
Case H ([2008] L&TR 16)	Authority on vertical division requiring a straight vertical line save for de minimis deviations (argued by a respondent here).	The court noted Case H as relied upon by a respondent but did not adopt a strict single-line requirement that would exclude the claims properly falling within the statutory tests applied.

Court's Reasoning and Analysis

The court affirmed the UT's reasoning. Its analysis proceeded from first principles in the statutory text and established comparative authority:

• Section 72(3) is a predominantly physical test. The phrase "self-contained part of a building" and the sub-paragraphs must be read together; paragraph (a) requires that the part "constitutes a vertical division of the building" (an actual, physical division), while paragraph (b) poses a hypothetical enquiry as to whether the structure "could be redeveloped independently".
• The court rejected the submission that a mere notional line on a plan, extending into an undivided open-plan basement, suffices to create the vertical division required by section 72(3)(a). Where the basement or sub-structure is actually undivided and designed for joint use, ordinary language and statutory purpose point away from treating such spaces as self-contained parts.
• Ownership or registered allocation of foundation elements does not convert the physical test; the statutory enquiry focuses on built structure and separability of services rather than title to sub-structures.
• The court emphasised practical workability: granting RTM rights over part of an undivided estate facility (notably an open car park serving multiple blocks) would produce impractical and potentially unworkable divisions of management functions, a consideration supported by prior authority.
• On independent redevelopment (section 72(3)(b)) the court held the correct test is whether redevelopment of the claimed part could occur without redeveloping the rest of the building at the same time. It rejected an interpretation importing an absolute rule that neighbours' consent or zero impact on neighbours is required; the enquiry is evaluative and fact-specific and allows for realistic hypothetical works, including use of temporary supports.
• Applying these principles to the facts: the Estate appeal failed because the undivided basement car park meant the blocks did not constitute actual vertical divisions; the Terrace/Mews (No. 14) satisfied the vertical-division and independent-redevelopment tests on the factual findings (party walls, movement joints, and the practicable possibility of redevelopment using temporary supports).

Holding and Implications

DISPOSITION: Both appeals were dismissed by the Court of Appeal; the UT's decisions were upheld.

Direct effects:

• Appeal A (Estate appeal): the RTM companies failed to establish that each block was a "self-contained part of a building" under section 72(3); their claims to the right to manage those blocks were unsuccessful.
• Appeal B (No. 14/Terrace appeal): the landlords' appeal was dismissed; the RTM company's entitlement to manage No. 14, as found by the FTT and the UT, stands.

Broader implication: the judgment clarifies that section 72(3)(a) requires an actual physical vertical division (not merely a notional line extended into an undivided shared sub-structure) and confirms the correct, practical approach to the independent-redevelopment enquiry in section 72(3)(b). The court applied established authorities and purposive statutory construction but did not purport to establish novel precedent beyond these applications.