RTM Update: The Upper Tribunal provides much needed guidance on the self-containment and redevelopment tests
RTM Update: The Upper Tribunal provides much-needed guidance on the self-containment and redevelopment tests
The Upper Tribunal handed down its decision on two appeals relating to the statutory test for a “self-contained part” of a building pursuant to section 72(3) and 72(4) of the Commonhold and Leasehold Reform Act 2002 (“CLRA”) on 7 February 2025. Wallace acted for 14 Park Crescent RTM Co Ltd, the Respondent to one of the appeals and successfully opposed the appeal. This is an important decision which provides much-needed clarity on area which has received very little consideration at Upper Tribunal level. The decision will have a wider significance for Enfranchisement Claims under the Leasehold Reform, Housing and Urban Development Act 1993 and the scope of buildings which fall within the definition of a “Relevant Building” for the purposes of Section 117 of the Building Safety Act 2022, which also have similar self-containment tests.
Vertical Division
Prior to this decision, the issue of vertical division has only been considered once by the Lands Tribunal in Re Holding and Management (Solitaire) Ltd [2008].
The Upper Tribunal ruled:
The vertical dividing line between the self-contained part of the Premises and the remainder of the building can pass through shared areas such as foundations or movement joints of a building. This is not surprising and if this was not the case, it would be virtually impossible to acquire the Right to Manage any terraced property.
The Upper Tribunal did not think that the intention behind the CLRA was for the management of an undivided shared area such as a car park to be split between the building owner and the relevant RTM companies due to the practical difficulties of managing the area in this scenario.
The boundary line can deviate from a straight line.
Independent Redevelopment
This is another issue that had only been considered once in the first instance, and never at the appeal stage in the case of Stamford Hill Mansions RTM Co Ltd v Daejan Properties Ltd (2007).
The Upper Tribunal decided that:
This test could be satisfied even where other adjoining structures in the remainder of the building (not part of the RTM claim) would require support.
The term “redevelopment” does not require total reconstruction of the premises.
The test for independent redevelopment is purely physical and is not about whether the RTM company could legally redevelop or even has the relevant rights to do so, but whether this was physically achievable.
