The Settlers Court case is one to watch for RTM leaseholders

Why the Settlers Court case is one to watch for RTM leaseholders

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.

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’. 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. But since then, this judgement has raised a whole range of issues around block management and how maintenance charges are allocated.

ARMA says problems include:

ARMA says problems include:

• 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 which mean that estate facilities are not being managed as well as they could be.

ARMA is involved in the case, appointing a leading property lawyer to act on its behalf as an intervener. This means the organization can submit expert information to the court in the public interest. A situation where one block on development is managed by an RTM company and the rest of the estate employs a different property manager is always going to throw up the potential for conflict, so the outcome of this case will be important both for leaseholders and their block managers.

In the meantime, if you are considering right to manage, at Ringley we offer comprehensive advice on this and can take 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.