Right to Manage Applies to Individual Buildings

When residents of two adjacent blocks of flats applied for the right to manage their properties after forming a Right to Manage (RTM) company and lodging notices (under the Commonhold and Leasehold Reform Act 2002) with the owner, they probably expected no challenge.

However, the freeholder contested the application, arguing that the buildings were separate premises and so, in order to be valid, an application by a separate RTM company would have to be made in respect of each building.

The Court of Appeal accepted that having a single RTM company responsible for the management of two distinct premises could cause difficulties for the tenants. For example, where one building had more tenants than the other, the majority could operate the RTM company in their interests to the detriment of the occupiers in the smaller property. The Court concluded that the requirement that the right to manage applies to a self-contained building or part of a building did not mean that it could apply to two distinct buildings.

The decision means that it is back to the starting blocks for the tenants, who must now form another RTM company, arrange matters so that the members of each company are the tenants of the block to which the RTM application relates and then reapply.