One thing you could never accuse the Right to Manage legislation of being is “user friendly”. In Gala Unity Ltd v Ariadne Road Rtm Co Ltd [2011] UKUT 425 (LC), the Upper Tribunal (Lands Chamber) (in the person of that very nice chap, the President) has, however, tried to solve one of the more perplexing drafting problems to arise from the awful provisions that are the Commonhold and Leasehold Reform Act 2002.
Gala Unity Ltd was the freehold owner of, inter alia, a modern development consisting of two blocks of flats and two free-standing coach houses, which were themselves flats with parking spaces. The leases provided for various categories of service charge (estate, building main structure, building common parts, car park, insurance, etc). An RTM company was formed to acquire the RTM over the two blocks. One claim notice was served, claiming the RTM over the whole of the development.
The President was perfectly content that one RTM company could claim the RTM over two blocks like this (which might come as something of a surprise to those regular LVT users who frequent this blog, as this is one of the issues which splits LVTs on a regular basis), but thought the more interesting question was what happened to the remainder of the estate. He held:
(a) the RTM can be acquired over any premises which consist of a self-contained building or part of a building, with or without appurtenant property (s.72(1)(a)), 2002 Act);
(b) it was unnecessary to specify in any claim notice what, if any, appurtenant property was claimed, since the effect of a successful RTM application was to acquire the management of the building AND any property which was appurtenant to the building;
(c) property is appurtenant if it is appurtenant to any flat in the building;
(d) in the present case, that included the car parking spaces on the estate and the rights of way and such like over the remainder of the estate;
(e) the fact that those rights were shared with other leaseholder, including those in the coach houses (who were not part of the RMT claim) was irrelevant;
(f) there was no basis for concluding that “appurtenant” meant only property whcih exclusively served the building subject to the RTM;
(g) so, in the present case, the management was now split: the RTM company owed the management functions under the leases of those tenants within the RTM application and the landlord owed them to the other flats;
(h) the landlord and RTM company would, therefore, have to come to an arrangement, since they could not both provide management tasks to the same land (i.e. both arrange for it to be cleaned) without one of them falling foul of s.19, Landlord and Tenant Act 1985 (i.e. costs being unreasonably incurred).
So – clear? Two hugely important points emerge; first, there is nothing wrong with one RTM company and one claim notice for two blocks. Secondly, on big estates, unless the RTM company claims and acquires the RTM over all the blocks, there will have to be shared management of, in effect, the estate items, between the RTM company and the landlord. That shouldn’t be too hard to arrange, right?