The Importance of the Settlers Court Case

If you are a leaseholder in a block that has acquired the right to manage and live on a multi-building development, an appeal case heard in the Supreme Court in November could be important for you and your neighbours to know.

Background of the Case

The decision in FirstPort Property Services Limited v Settler’s Court RTM Company Limited and Others is expected early in 2022. The court will determine whether or not an RTM company that has the right to manage one block on a multi-building estate acquires the right over just that block, or whether it has the right to manage areas over which the residents of the block also have rights under the lease. In law, these areas are known as ‘appurtenant property’.

Legal Precedent and Its Implications

In 2012, the case of Gala Unity Ltd v Ariadne Road RTM Co Ltd [2012] established that the right to manage extends to all 'appurtenant property' enjoyed by a particular self-contained building, or part of a building, included in the RTM company. However, since then, this judgment has raised a whole range of issues around block management and how maintenance charges are allocated.

Issues Raised by ARMA

ARMA (the Association of Residential Managing Agents) has highlighted several problems resulting from the legal uncertainties, including:

• Disputes and misunderstandings over responsibilities and boundaries;

• Refusal of parties to pay for work or services;

• Debates around liability and frequency of maintenance works; and

• Conflicting views and priorities of residents and landlords/freeholders, leading to estate facilities not being managed effectively.

ARMA’s Involvement in the Case

ARMA is actively involved in the case, appointing a leading property lawyer to act on its behalf as an intervener. This allows ARMA to submit expert information to the court in the public interest. A situation where one block in a development is managed by an RTM company while the rest of the estate employs a different property manager is bound to create potential conflicts. This is why the outcome of this case is crucial for both leaseholders and block managers.

What This Means for Leaseholders Considering RTM

In the meantime, if you are considering the right to manage, at Ringley, we offer comprehensive advice on this and can guide you through the RTM process from start to finish. Contact our friendly team via the website and don’t forget to download our RTM E-book, which explains exactly how the process works.