Supreme Court Update: Five Things You Need To Know About Right To Manage

• Published date: 03 February 2022
• Subject Matter: Litigation, Mediation & Arbitration, Real Estate and Construction, Trials & Appeals & Compensation, Real Estate
• Law Firm: Gowling WLG
• Author: Mr Clive Chalkley and Şenay Nihat

The recent Supreme Court decision in FirstPort Property Services Ltd v Settlers Court RTM Company and others [2022] UKSC 1 confirms that residential blocks with the right to manage are no longer responsible for providing estate services that affect other blocks on the estate, and are only responsible for their own block. In this insight we take a look at the case and the Court's decision, as well as five things you need to know.

Background

FirstPort involved a block of flats known as Settlers Court on the Virginia Quay Estate in London. The leaseholders of Settlers Court had set up their own right to manage company, Settlers Court RTM Company (the "RTM"), which had taken over responsibility from the existing third-party management company, FirstPort Property Services Limited ("FirstPort").

There were other blocks on the estate, which all shared facilities and amenities with Settlers Court, including maintenance of communal areas, secure parking control systems, CCTV and an on-site concierge.

The the RTM claimed that the leaseholders of Settlers Court were not liable to pay estate charges to FirstPort for these services, as the the RTM was already responsible for providing wider estate services under the right to manage. FirstPort rejected this, arguing that it was solely responsible for providing estate services, as the right to manage does not extend beyond Settlers Court, where the right to manage had been exercised.

Decision

The Supreme Court found in favour of FirstPort, overturning the decision in Gala Unity Ltd v Ariadne Road RTM Co Ltd [2012] EWCA Civ 1372, finding that the right to manage only related to their respective block, and did not extend to providing wider estate services enjoyed by other blocks.

Five Things You Need to Know

1. Gala...