[2025] UKUT 39 (LC)

In the Park Crescent appeal the landlords contend that the FTT misinterpreted section 72(3)(b), 2002 Act and that had it directed itself properly it would have concluded that the structure of No.14 could not be redeveloped independently of the remainder of the building. By cross appeal, the respondents in the Plaza Boulevard appeal challenge the FTT’s determination that each of the three blocks could be redeveloped independently.

Mr Bates KC introduced his submissions on this part of the appeal by referring to the decision of the Supreme Court in Settlers Court and drawing attention to the importance placed by the Supreme Court on limiting the right to manage to property which the RTM company would be able to manage on its own. Lord Briggs JSC had found support for that limitation in section 72 itself, as he described at [40]:

“The starting point lies in section 72, which imposes a much tighter qualification requirement in relation to premises than the equivalent provision in the 1987 Act. The premises must be self-contained. If they constitute a whole building it must be structurally detached. If part of a building that part must be divided vertically from the rest of the building, be capable of being independently redeveloped and have services which either are or could without interruption to the rest of the building be made independent. All these requirements point strongly towards confining the right to manage to separate premises within which the quality of the management provided by the RTM company affects only the occupants of that building or part of it.”

This passage provided the foundation for Mr Bates’ submission that, when section 72(3)(b) refers to the structure of the building being such that the part of the building “could be redeveloped independently of the rest of the building”, it meant that it must be possible to redevelop the RTM premises without needing the consent, agreement or support of the owners of any neighbouring premises and without impacting on their property.

The whole Crescent was redeveloped behind its original façade between 2012 and 2018, with the work to No.14 coming towards the end of that period after the adjoining No.12 had been completed and occupied. Before the FTT the expert witnesses on both sides also agreed that by the use of appropriate temporary restraints and supports it would be possible to demolish and redevelop the whole of No.14, including its façade, without causing the collapse of the neighbouring buildings. In the Park Crescent appeal the issue is whether the degree of cooperation or consent which would be required for such a redevelopment would be such that it could be described as having been undertaken “independently”.

Mr Bates KC stressed the structural dependence of No.14 on its neighbours, with which it shared party walls and foundations. The degree of support for No.12 which had been required during the redevelopment of No.14 demonstrated that the structure of the Crescent was not such that No.14 could be redeveloped independently of the remainder of the Crescent. He suggested that the independence requirement in section 72(3)(b) must mean something more than simply that redevelopment was possible, no matter what resources or elaborate engineering solutions were required.

The FTT did not accept Mr Bates submission. It was satisfied that “redeveloped independently” simply meant that the RTM premises must be capable of being redeveloped while the remainder of the building was not.

In my judgment the FTT was right. The starting point is that the conditions in section 72(3) and (4) are purely physical tests, as the Court of Appeal has confirmed in Eveline Road. They do not invite consideration of the legal obstacles which may stand in the way of a redevelopment or of the entitlement of the RTM company to embark on the sort of project the conditions describe. The RTM company will have no right to redevelop the premises, but section 72(3)(b) is not about the RTM company’s rights or intentions. It is one part of a description of the physical characteristics, amounting to self-containment, which part of a building must possess before the right to manage provisions will apply to it.

There is a substantial overlap between the three aspects of self-containment identified in section 72(3) and (4). Part of a building which is not a vertical division is likely to be more difficult or perhaps impossible to redevelop independently as may premises where services shared with a neighbour cannot be separated without significant interruption. These conditions overlap and interrelate, and I see no need to identify rigid boundaries between them in order to find a distinct meaning for “redeveloped independently”.

Mr Bates KC attributed to the word “independently” connotations of exclusivity, freedom of action and absence of cooperation but resisted any consideration of the opportunity a building owner has, through the Party Wall Act 1996 or the Access to Neighbouring Land Act 1992, to obtain consent to works through a judicial or arbitral procedure where the necessary consent of a neighbouring owner is being refused. His preferred meaning would be liable to exclude most, or perhaps all, terraced buildings from access to the right to manage. That extreme interpretation would limit the statutory regime to an extent which cannot have been intended and which has certainly not previously been recognised (including by the Court of Appeal in Eveline Road).

I am satisfied that the FTT came to the right conclusion on this issue, and that the agreed expert evidence was conclusive. What matters for the purpose of section 72(3)(b) is the structure of the building and whether it lends itself to redevelopment at a time when the remainder of the building is not being redeveloped. On that understanding this ground of appeal must be dismissed.

In the Plaza Boulevard case the FTT directed itself that the sort of redevelopment with which section 72(3)(b) was concerned was not limited to a redevelopment of the interior of the premises, such as had taken place in the recent past. On the other hand, it did not accept that a need to provide support for other parts of the building meant that the condition could not be met. The experts had described each block on the Estate as an independent, self-supporting structure on its own piled foundations and the FTT was satisfied that the structure of the Estate as a whole was such that each block could be redeveloped comprehensively but independently of the rest.

For the respondents, Ms Rai and Mr Allison supported the FTT’s approach to redevelopment, understanding it as referring to a comprehensive or complete redevelopment which removed every component of the original structure, including the steel frames which performed the dual function of forming the skeleton of the individual blocks while supporting the podium and estate roads. If the steel frame was removed in its entirety, as would be necessary for a complete redevelopment, the podium would collapse unless it was supported. Neither counsel was prepared to accept that some form of support could be provided during redevelopment to avoid the catastrophe which they described. Mr Allison emphasised that the redevelopment had to be independent, and so could not depend on arrangements with the owner of the rest of the building.

I do not see any reason to interpret “redeveloped” as referring to building operations so comprehensive that nothing of the original premises remains. No sensible person would dispute that No.14 had been redeveloped in the years before the RTM claim, although the front and rear facades, and the party walls, had remained in place. In the Stamford Hill case the LVT had drawn support from section 23(2)(b) of the 1993 Act, which refers to redevelopment involving demolition or reconstruction of the premises or carrying out substantial works of construction on the premises and is reminiscent of section 30(1)(f) of the Landlord and Tenant Act 1954. The actions described in these different statutory provisions would be recognised as examples of redevelopment, notwithstanding that they may result in parts of the original structure surviving and being incorporated into the new. Whether sufficient work is involved in a particular scheme to merit the description redevelopment would obviously be a matter of degree, but something well short of complete demolition is likely to suffice.

I also reject the suggestion that a scheme of redevelopment which depends on support being provided to adjoining structures is not capable of satisfying section 72(3)(b). That was effectively Mr Bates KC’s argument which I have already dismissed.

I am therefore satisfied that the FTT was entitled to conclude that the three Plaza Boulevard blocks could each be redeveloped independently of the remainder of the Estate.