The fallout from the Court of Appeal decision in Ninety Broomfield Road versus Triplerose appears never-ending. In 2015 the Triplerose case determined that one RTM Company can only manage one self-contained building or part of a building. Simple enough to understand one would have thought, but there is no accounting for the ingenuity and creativity of landlords and managers when it comes to obstructing genuine RTM claims. The case of Viceroy Court (CF10) RTM Co versus Fairhold (Yorkshire) Limited and FirstPort Property Services (LVT/0056/02/17) is another typical example.
In 2014 a previous RTM Claim by Viceroy leaseholders failed due to procedural errors in the requisite notices. At an LVT hearing in Cardiff in 2015, following an inspection of the building, the Tribunal determined it was “incontrovertibly the case that the 46 flat block that is Viceroy Court is a self-contained structurally detached building” but did not find it necessary to decide whether the building comprised self-contained parts or hear submissions on the landlord´s novel argument that following Triplerose an RTM company could not manage a building if that building comprised self-contained parts.
Following these events leaseholders came to the RTMF for help. We advised leaseholders that in our opinion there was nothing in the statute or in Triplerose that prevented an RTM company from exercising RTM in respect of a self-contained structurally detached building irrespective of how many self-contained parts it may comprise. Leaseholders subsequently instructed RTMF to file a new RTM claim on that basis.
Unsurprisingly both Fairhold and FirstPort filed counter-notices asserting that because the premises comprised multiple self-contained parts or ‘cores’ the claim failed on the ground it was not open to an RTM company to acquire the management of the whole building. At a pre-trial review the Tribunal Judge rejected the Respondents request for independent surveyors´ reports and agreed with RTMF that a preliminary hearing of the legal issue could save time and substantial costs.
The key issue for determination at the preliminary hearing was whether, as a matter of law, an RTM company can acquire the Right to Manage multiple self-contained parts of the same building. It was common ground that if RTMF's submission on this issue was correct it would validate the RTM claim.
Counsel for the Respondents referred to the Judge´s concluding remarks at paragraph 62 of the Triplerose case, which stated “Accordingly in my view it is not open to an RTM company to acquire the right to manage more than one self-contained building or part of a building”. Counsel submitted this supported the proposition that one RTM company can only manage one self-contained part and if a building comprised several self-contained parts it required a single RTM company for each part.
In submissions for the RTM company RTMF quoted various parts of the Act that refer to “premises within premises”, which he said clearly indicated that a building could comprise smaller parts or premises. Further he submitted that Schedule 6 paragraph 2 of the Act, entitled ‘Buildings with self-contained parts in different ownership’, would serve no purpose if an RTM application could not extend to a building with multiple self-contained parts.
The Tribunal accepted the Applicant´s submissions and determined that a single RTM company can acquire the RTM a building comprising multiple self-contained parts. In reaching this decision the Tribunal also gave weight to the Court of Appeal decision ‘Craftrule Ltd. V. 41-60 Albert Place Mansions (Freehold) Ltd’ that decided the same issue in relation to collective enfranchisement provisions under the 1993 Act, which mirrored the RTM provisions in the 2002 Act. The Tribunal further determined that the concluding remarks in the Triplerose decision quoted by Counsel, when read in context, did not provide authority for the Respondent´s proposition.
Despite the successful outcome the Viceroy leaseholders are not legally entitled to claim costs whereas had the landlord succeeded it could have claimed all its legal costs. As long as this imbalance is allowed to continue landlords will undoubtedly persist in raising tenuous objections to RTM claims in order to delay and obstruct leaseholder´s statutory rights. The RTMF is continuing to lobby Government for a change in the law to address this unfairness.
Leaseholders at Viceroy Court can look forward to a Happy Christmas. They acquire their Right to Manage on 25th December 2017.A copy of the Tribunal´s decision is available here.