It is not uncommon for blocks of flats to have an under-croft or basement area to be utilised as car parking, usually for residents but sometimes for the general public. In most cases the basement will extend to the footprint of the building but in some blocks the basement may extend beyond the footprint and under adjoining buildings. What are the implications for blocks seeking their right to manage?
The 2002 Act does not make specific reference to basements. The most relevant part of the statute is s.72, which stipulates that Right To Manage is only available to a self-contained, structurally detached building or a self-contained part of a building. Much legal debate has focused on the meaning of ‘structurally detached’.
In a recent Court of Appeal Decision (LM Homes v Queen Court Freehold Co Ltd [2020] EWCA Civ 371) it was confirmed that the area of a building is not limited to the structure above ground level but includes all parts below it, including the floor slab at podium level, the area of basement immediately below the block, the relevant part of the basement floor slab and the subsoil beneath.
The starting point in defining ‘structurally detached’ is a 1974 House of Lords case in the context of the 1967 Act, (Parsons v Gage [1974] 1 WLR 435 HL), in which Lord Wilberforce discounted the significance of the adverb ‘structurally’ and took the view the term meant no more than “detached from any other structure”.
The first meaningful case in relation to the 2002 Act came before the Upper Tribunal in 2013 (No 1 Deansgate (Residential) Ltd v No 1 Deansgate RTM Co Ltd [2013] UKUT 0580 (LC)), which decided the Wilberforce definition was not intended to apply generally and would lead to absurd consequences if applied to s.72. It would effectively mean one could connect a washing line between two buildings and they would disqualify for Right To Manage because they were attached.
The Deansgate case was about shared guttering between two otherwise detached buildings. The Upper Tribunal decided that the adverb “structurally” was there for a purpose, otherwise the draughtsman would have just used ‘detached’ or ‘wholly detached’. It determined that attachment to another building was permissible as long as the attachment was ‘non-structural’.
The following year a contrasting case (Albion Residential Ltd v Albion Riverside Residents RTM Co Ltd 2014 UKUT 6 (LC)) was heard by the Upper Tribunal. The riverside building was described as a “structurally complex modern building” with an underground car park that extended beneath an adjoining block. On the basis of expert engineering evidence the tribunal determined that various parts, including riverside buttressing, were structurally dependent on one another and therefore not “structurally detached”. Right To Manage was disallowed.
The nearest we have come to specific guidance is in a 2018 case (CQN RTM Company Limited v Broad Quay North Block Freehold Ltd [2018] UKUT 183 (LC)) in relation to the Radisson Tower and adjoining blocks in Bristol. In this case the Judge set out alternative propositions, the primary one being that “structural, in this context should be taken as meaning ‘appertaining or relating to the core fabric of the building”. The Judge also determined there would be no structural detachment “if one bears part of the load of another or there is some other structural interdependence between them…”.
A more recent High Court decision (Consensus Business Group (Ground Rents) Ltd v Palgrave Gardens Freehold Co Ltd [2020] EWHC 920 Ch) has questioned these propositions and adopted a slightly different approach. Mrs Justice Falk said “I do not agree with the submission that the question of structural detachment is simply one for structural engineers and dependent solely on the existence or otherwise of structural interdependence or load bearing connection. This is not the statutory test. I would also add that I consider that design and function play some part in determining whether structural detachment exists.”
In Palgrave Judge Falk took into account that the blocks were all constructed at the same time and a ‘single built structure’ extended under each one. Furthermore there was direct lift and stair access between the underground structure and each Block. She placed weight on the observations of the Recorder in the County Court, where he found as a matter of fact that there was ”a single, coherent structure, which was built as a part of a single development, with a common car park, which was used to its full extent by residents of all the Blocks. This was not a case of buildings that were separately designed and built to function independently. The facts are different from Deansgate and closer to CQN and Albion Riverside.”
Mrs Justice Falk also made reference to Lord Millet (quoted in LM Homes) where he said “The Courts will presume that Parliament did not intend a statute to have consequences which are objectionable or undesirable; or absurd; or unworkable or impracticable, or merely inconvenient; or anomalous or illogical; or futile or pointless.”
CONCLUSION
The general approach adopted by the courts and tribunals seems to be that whether a building meets this criteria is a question of ‘fact and degree’, which is not very helpful to RTM practitioners seeking to advise clients on a building’s RTM prospects. To date no specific ‘tick-box’ test exists.
Although Palgrave Gardens appears to be a move towards a more common sense, holistic approach to this issue, it is difficult to see how the expert evidence of architects and structural engineers can be completely disregarded. Until or unless the Court of Appeal reviews these issues, future tribunals are likely to base their decisions on the aforementioned legal authorities.
In broad terms, if your building has a basement or underground car park that extends beyond the buildings footprint and underneath another building or buildings it may be an obstruction to an RTM claim. However It may not be fatal, because it may be possible to claim RTM for all the buildings that sit over the basement on the basis it is all one structure as determined in Palgrave Gardens.
Alternatively, it may be possible to claim RTM for one part of a multi-building structure, by defining the Premises as a ‘self-contained part of a building’ under s.72 of the Act, although other criteria then apply, such as vertical division, independent services and the potential for independent development.
RTMF has been instructed in many cases involving underground car parks and can advise further if your building is one that could be affected by these particular qualification criteria.