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Right to Manage: Considering whether premises are ‘occupied as a separate dwelling’ (Q Studios (Stoke) RTM v Premier Ground Rents No 6 – 2020)

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Where leaseholders of student accommodation served a Right to Manage claim, did the premises qualify as ‘separate dwellings’ for the purposes of the definition in the Commonhold and Leasehold Reform Act 2002?

The background

Q Studios (Stoke) RTM v Premier Ground Rents No 6 [2020] concerned a block of student accommodation comprising 292 studios each containing en-suite bathrooms and other basic living facilities. The block contained no common kitchen or bathroom areas, save that the ground floor contained a communal lounge, gym and laundry.

Each studio was let on a 250-year lease to investor leaseholders, who applied for the right to manage the block. The application was denied by the freeholder and managing agent, who argued that the studios were not flats as they were not intended to be occupied as separate dwellings under the definition contained in the CLRA 2002. S.112(1) states that a ‘flat’ is a separate set of premises which ‘is constructed or adapted for use for the purposes of a dwelling’. A ‘dwelling’ is further defined as ‘a building or part of a building occupied or intended to be occupied as a separate dwelling’. The freeholder and managing agent stated that students would occupy a studio as well as the shared communal facilities, and therefore the studio itself was not a ‘separate dwelling’.

The RTM company applied to the First-tier Tribunal, who transferred the case to the Upper Tribunal for determination on this important principle.

The decision

The UT found that each studio contained essential living accommodation and facilities, sufficient to qualify as ‘separate dwellings’. The communal facilities, although shared, were largely recreational and did not prevent the studios being used and enjoyed independently. As a result, they were found to be ‘flats’ for the purposes of the right to manage claim.

The UT considered the physical characteristics of the premises, together with the wider context of the building and other appurtenant property. Also referencing the Rents Act test, if living accommodation that may ordinarily be contained within a premise is provided instead as shared space to be used in common with other occupiers, a premise is not classed as ‘a separate dwelling’. The UT concluded that each case will turn on its facts and the degree of living accommodation and communal facilities provided, finding that in this case each studio contained ample accommodation for an occupier to use the flat as a separate dwelling.

Advice and action

A useful reference case as more and more ‘self-contained’ student accommodation is constructed throughout the country. Landlords and freeholders who wish to avoid rights to manage claims from long leaseholder investors are advised to carefully consider the facilities and accommodation contained within student lets, ensuring that sufficient shared accommodation is delivered to avoid individual units being classed as ‘separate dwellings’ for the purposes of an RTM claim.

The Upper Tribunal found that each studio contained essential living accommodation and facilities, sufficient to qualify as ‘separate dwellings’ for the purposes of the long leaseholders’ right to manage claim.

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