Cecily Crampin successful in new case on the limits of transfer of management functions to an RTM company: no statutory right to use a house manager’s flat
Cecily Crampin, instructed by JB Leitch, has succeeded at trial in Fairhold Homes (No 14) Limitedv Heritage Court RTM Company Ltd (County Court at Central London, Recorder Padley, 27 June 2023) in a further development of the law in this little understood area. This was a claim for a declaration that an RTM had no right to use a flat in the block they manage, shown on the other flat lease plans as “house manager’s flat”, by reason of their right to manage, and had to agree a tenancy or licence with the freeholder to use it.
In this case, the flat leases had no express obligation on the landlord to provide a resident house manager, or use the so named flat for house manager accommodation. The RTM company argued that the references to the house manager’s flat that there were in the flat leases were enough for the court to conclude that the flat must be so used, and hence the company had a statutory right to use the flat without payment (even though the service charge provisions in the lease allowed recovery of rent for the flat if it was used for the house manager). Recorder Padley disagreed. The lease was clear: there was no such obligation and hence no basis to imply such a statutory right to use the flat. The parties had for some years post the acquisition of the RTM charged and paid rent for the flat respectively. She concluded that that had created a licence for its use at a reasonable market rent. The acquisition of the right to manage did not give the RTM company additional rights, nor interfere with property rights. “S96(2) transfers the obligation to provide a house manager and empowered the RTM company to decide to enter an agreement with the owner to provide the flat [for the house manager’s use]”. It did not give the company a statutory right to possession simply by transfer of the management functions under the Commonhold and Leasehold Reform Act 2002.
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