It has now been almost three years since the decision of the Court of Appeal in Triplerose Limited v Ninety Broomfield Road RTM Co Ltd [2015] was handed down and it would seem that there is little or no appetite to clarify the law surrounding the right to manage multiple residential blocks of flats comprising the same estate.
Part 2 of the Commonhold and Leasehold Reform Act 2002 provides long leaseholders of flats with the right to assume the management of the building from the landlord. This is a ‘no fault’ right. Provided the leaseholders meet the criteria set out in the legislation, they can, through the creation of a Right to Manage company, take over the management of the building. The purpose of the legislation is to allow long leaseholders more control over the decision-making in relation to their homes.
The right to manage applies to ‘premises’ as defined in section 72 of the Act; namely, to a self-contained building or part of a building with or without appurtenant property - ‘appurtenant property’ being any garage, outhouse, garden, yard or appurtenances belonging to or enjoyed with the flat.
Readers will recall that, in Triplerose, the Court overturned the decision of the Upper Tribunal which held that a RTM company could acquire the management of more than one building as long as the qualifying criteria was satisfied in respect of each building it intended to manage.
Lady Justice Gloster held that, for the purposes of deciding whether a single RTM company could manage more than one set of premises:
“If a company is an RTM company in relation to premises A, only qualifying tenants of premises A, and the relevant landlords of premises A, are entitled to be members of that RTM company. Section 74 does not envisage that qualifying tenants of premises B, and the relevant landlords of premises B, are also entitled to be members of that RTM company.”
The Court of Appeal concluded, therefore, that there should be separate RTM companies set up in respect of each self-contained block notwithstanding that, traditionally, the same landlord and, in some cases, the same RTM company had, to date, been managing the Estate as a whole without objection from the leaseholders. The likelihood is that, for those leaseholders, no pressure will be applied on the RTM company to change the status quo.
However, Triplerose continues to represent an opportunity for ousted landlords to claim that the RTM company managing multiple blocks is invalid. It could also enable aggrieved leaseholders who feel that the RTM is not properly managing the Estate to seek a declaration that the RTM is invalid. This may be particularly so where an estate is comprised of blocks of differing sizes and where the larger blocks may dictate management strategy to the smaller. It is also likely to be relevant when the Estate comprises a block of flats and, say, a handful of houses which have rights over the common parts of other parts of the Estate and where the service charge provisions are not clear or fair.
Jacinta Conway is a Partner in the Dispute Resolution team specialising in property litigation at law firm Royds Withy King
