Shake-up in the world of Right to Manage Companies



In a greatly anticipated decision, the Supreme Court handed down their judgment yesterday in FirstPort Property Services Ltd v Settlers Court RTM, wherein the court overturned the lower appellate court to rule that Right to Manage Companies in tower blocks only acquire the block itself and physical property which the members have rights over or owe, rather than the right to manage an entire shared estate.

In this decision, which involved a substantial 778 unit estate in North London and a individual block therein containing 76 units, the Supreme Court clarified that the Commonhold and Leasehold Reform Act 2002 made no provision for Right to Manage Companies to acquire management of shared estate facilities. This will reverse the growth of those companies which have acquired the functions of the broader estate following the decision in Gala Unity Ltd v Ariadne Road RTM Co Ltd [2012] EWCA or have shared them under the “dual responsibility” of the estate and the Right to Manage Company.

This judgment has finally clarified the difficult relationship between Right to Manage Companies and the wider estate since the decision of Gala Unity Ltd, but like that previous decision, the ramifications of this judgment will be enormous as it fundamentally alters the legal landscape with regards to how Right to Manage Companies and the broader estates interact.

Although this decision brings to an end this particular dispute and re-clarifies the 2002 Act, we suspect that the broader consequences of this decision will be akin to the firing of a starting pistol on a myriad of contentious disputes regarding dual responsibility estates created since Gala Unity and the shared facilities therein.



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