The Court of Appeal has handed down its decision in In Courtyard RTM Company Ltd and others v Rockwell (FC103) Ltd and another [2026] EWCA Civ 712; two combined appeals concerning the application of the statutory test for acquiring the right to manage a “self-contained part” of a building under section 72 of the Commonhold and Leasehold Reform Act 2002.
Statutory test
The 'Right to Manage' can only be claimed in respect of certain types of “building" and Section 72(1) of the 2002 Act provides that the right to manage applies to premises only if they satisfy certain conditions. The first of these is that the premises “consist of a self-contained building or part of a building”, the purpose of which is to ensure that the building can be managed discreetly.
Section 72(3)-(4) sets out a three-stage test for establishing that a part of a building is a self-contained part of a building and it is a question of fact:
- First, whether the part constitutes a “vertical division of the building”.
- Second, whether the structure of the building is such that the part could be redeveloped independently of the rest of the building.
- Third, whether the relevant services are provided to the part independently of the relevant services provided for occupiers of the rest of the building or could be provided without significant interruption in the provision of any relevant services for the occupiers of the rest of the building.
The previous decisions
The appeal concerned the application of the statutory test to two properties; Plaza Boulevard, a development consisting of multiple blocks, underpinned by a shared underground car park which extended across multiple properties, and Park Crescent, the foundations of which spanned under the voided areas of neighbouring properties.
In respect of Plaza Boulevard, the Upper Tribunal had ruled that, at basement level, the car park did not constitute a vertical ‘division’ as it was undivided, and therefore Plaza Boulevard did not satisfy the statutory test and was not a qualifying premises.
In respect of Park Crescent, the Upper Tribunal had ruled that Park Crescent was a qualifying premises, as "vertical division" is a physical test and is not concerned with ownership.
Court of Appeal decision
The Court of Appeal upheld the Upper Tribunal's decisions, confirming that "vertical division" requires actual, physical division of the building and that the phrase "self-contained part of a building" naturally connotes a part within actual dividing features, rather than notional boundaries. It also endorsed a "workability approach" when interpreting section 72(3), and that the practical realities of shared management of estate facilities should be considered.
It therefore agreed that Plaza Boulevard did not constitute a qualifying premises, because the claimed premises necessarily included an undivided portion of an open-plan basement car park, over which third parties had rights to pass over.
In relation to Park Crescent, the Court of Appeal also upheld the Upper Tribunal's decision, in that Park Crescent was a qualifying premises, and rejected the landlords’ argument that the part did not constitute a “vertical division” on the basis that the foundations “belonged” to the neighbouring property and held that shared foundations beneath party walls did not prevent vertical division, agreeing with the Upper Tribunal that the test is physical rather than concerned with ownership. The Court also confirmed the Upper Tribunal's conclusions that the statutory test imposes no requirement for a single straight boundary.
The Court further discussed the test for independent redevelopment and rejected a 'maximalist' interpretation of the statute. The test requires only that the relevant part could be structurally redeveloped as a whole and on its own, with the Court further confirming that props and temporary supports which may impact neighbouring buildings do not disqualify premises, as the statutory test does not require it to have no impact on neighbouring buildings.
The decision gives much needed guidance as to how to interpret the statutory test for "self-contained part of a building". Although this decision is in the context of RTM claims and the 2002 Act, the statutory test is similar to those contained in the Leasehold Reform, Housing and Urban Development Act 1993, the Building Safety Act 2022, and the draft Commonhold and Leasehold Reform Bill 2026, therefore it is expected to have wider implications.
