Background
Skyline Central One is a ten-storey block of 122 leasehold flats in Manchester, structurally detached and occupying an entire city block bounded by Goulden Street, Mason Street, Bendix Street, and Rochdale Road. The building includes two below-ground levels of carparking, a gymnasium, roof terrace, zen room, concierge, and other leisure facilities. Since 2006, the building’s owners have been bound by a Deed granting owners and occupiers of a neighbouring building across the street — Skyline 2 — the right to park in Skyline Central One’s carpark (originally 80 spaces, reduced to 37 in 2013) and to use its leisure amenities. In return, the owner of Skyline 2 contributes roughly half the cost of maintaining those shared facilities.
In October 2023, Skyline Central One RTM Company Limited served a right-to-manage notice under section 79 of the Commonhold and Leasehold Reform Act 2002. The freehold owner, Adriatic Land 3 Ltd, resisted the claim, arguing that the third-party rights held by Skyline 2 residents meant Skyline Central One was not truly “self-contained” for the purposes of section 72 of the 2002 Act, and that managing the shared facilities would be unworkable because the RTM company would have no contractual relationship with those third-party users.
The First-tier Tribunal (Property Chamber) rejected that argument on 30 June 2025, confirming that Skyline Central One is structurally detached and therefore qualifies as a self-contained building under section 72, and that the RTM company was entitled to acquire the right to manage with effect from 1 October 2025. The FTT granted permission to appeal on five grounds.
The Court’s Holding
Deputy Chamber President Martin Rodger KC dismissed the appeal in its entirety. The Tribunal held that the qualifying conditions in section 72(1) of the 2002 Act are purely physical in nature: a building is self-contained if it is structurally detached, full stop. There is no additional, non-physical requirement that the building be capable of being managed entirely independently of third-party rights over its facilities. The existence of contractual rights allowing occupiers of Skyline 2 to use the carpark and leisure facilities inside Skyline Central One does not strip the building of its self-contained status.
The Tribunal distinguished the Supreme Court’s decision in Settlers Court RTM Co Ltd v FirstPort Property Services Ltd [2022] UKSC 1, which concerned a different problem: whether an RTM company’s management functions extended outward to shared estate facilities lying outside the building itself. In Settlers Court, Lord Briggs had confirmed that the qualifying conditions are “entirely physical.” That analysis, the Tribunal held, actually supports the RTM company here — it forecloses any attempt to graft non-physical, management-based disqualifications onto section 72(1). Where shared facilities sit inside the premises (as here), they clearly “relate to” those premises, and the RTM company’s management functions plainly cover them; section 97(2) of the Act provides a mechanism for the RTM company to agree with the landlord to continue managing facilities that third parties also use.
The Tribunal also rejected the landlord’s reliance on the Tribunal’s own earlier decision in The Courtyard RTM Co Ltd v Rockwell (FC103) Ltd [2025] UKUT 39 (LC), finding that case concerned the different question of whether physically undivided space shared between two buildings could be parcelled out between them — not the effect of third-party usage rights over facilities located within a qualifying building. Grounds 4 and 5 fell away as derivative of the primary grounds. The acquisition date for the right to manage will be three months after the decision becomes final.
Key Takeaways
- The test for whether premises are a “self-contained building” under section 72(1) of the Commonhold and Leasehold Reform Act 2002 is purely physical (structural detachment); there is no additional requirement that the building be manageable independently of third-party rights.
- Third-party contractual rights to use facilities — such as carparking or a gymnasium — located within the qualifying building do not prevent an RTM company from acquiring the right to manage that building.
- Where shared facilities are inside the premises, the RTM company may use section 97(2) to agree with the landlord to continue managing those facilities on behalf of third-party users, rather than taking over direct management itself.
- Settlers Court is confined to its context: the exclusion of shared estate facilities located outside the relevant building from the scope of RTM management functions; it does not create a broader rule disqualifying buildings whose internal facilities are used by outsiders.
Why It Matters
This decision provides important clarification for leaseholders in mixed-use or interconnected developments where easements or contractual sharing arrangements link two neighbouring buildings. Landlords had argued — drawing on Settlers Court — that such arrangements could defeat a right-to-manage claim by rendering the building incapable of independent management. The Upper Tribunal firmly closes off that argument: once a building is structurally detached, the right to manage is available, and practical complications arising from third-party usage rights are to be resolved through negotiation and the Act’s existing machinery rather than by denying the right altogether.
The ruling reinforces a consistent line of authority from the Supreme Court and Court of Appeal holding that the qualifying conditions in section 72 are physical, not functional. RTM companies in buildings where developers have created cross-building sharing arrangements — common in large urban residential schemes — can proceed with confidence that those arrangements do not constitute a veto on the right to manage.