Enfranchisement: when is a building structurally detached?

In Consensus Business Group (Ground Rents) Ltd v Palgrave Gardens Freehold Company Ltd [2020] EWHC 920 (Ch) the High Court has advocated a common sense approach to construing whether a development is constructed as a single unit or structurally detached for the purposes of serving a single notice to collectively enfranchise. Palgrave Gardens comprised of five blocks. The blocks appeared attached, but were in fact independent self-supporting structures, separated by movement joints. There was also a single basement car park that ran underneath the blocks and extended underground beyond the footprint of the blocks. The respondent nominee purchaser served an initial notice exercising the right to collective enfranchisement pursuant to section 13 of the Leasehold Reform, Housing and Urban Development Act 1993 (the Act). The appellant freeholder served a counter-notice denying the right. The freeholder argued that the premises specified in the initial notice did not consist of a self-contained building or part of a building. Further, that the initial notice was invalid as it failed to clearly state whether for the purposes of section 13(3) of the Act the “specified premises” included the basement car park. The County Court found that “on balance” the initial notice restricted the claim to the ground-floor outline of the blocks only and did not include the car park. Permission was, however, granted to amend the notice. In declaring that the tenants were entitled to collectively enfranchise, the County Court determined that for the purposes of section 3 of the Act the re-amended notice related to a self-contained building and the blocks comprised a single building including the car park. The freeholder appealed. The High Court found that the initial notice met the formal requirements of section 13(3)(a) of the Act. It was sufficiently clear to a reasonable recipient that the premises to be acquired under section 1(1) of the Act was limited to the ground-floor footprint of the blocks. Section 13(3)(a) required the initial notice to “specify and be accompanied by a plan showing” the relevant premises and property to be acquired. The accompanying plan clearly specified the relevant premises and the reasonable landlord would focus on the plan. In relation to jurisdiction, the Act conferred a discretion on the County Court to permit amendments to the initial notice so as to allow property to be added or removed. On the important issue of whether the blocks and car park comprised a single self-contained building for the purpose of section 3 of the Act, the High Court found that it did. An analysis of the case law showed that the first step was to identify the premises said to constitute the building (or part of a building). The next step was to identify whether the premises was self-contained or not. The test of whether a building was self-contained was determined by reference to whether it was structurally detached, and that was a question of fact and law. Applying LM Homes Ltd and others v Queen Court Freehold Company Ltd [2020] EWCA Civ 371; [2020] PLSCS 41; the High Court noted that even if the blocks were structurally detached, any enfranchisement of a block would at a minimum include the airspace above it and the subsoil beneath it. It would therefore include the area of the car park below the block. Taken to its logical conclusion, if each block comprised a self-contained building, it would be possible for tenants to enfranchise in a way that included the area of the car park beneath their block, but no other parts of the car park. The High Court found that such a conclusion ran contrary to common sense. A conclusion that the blocks constituted a single self-contained building made them capable of enfranchisement in a practical and relatively straightforward manner. This approach would confer the advantages that parliament intended tenants to enjoy under the Act and produced a clear and workable result. Elizabeth Dwomoh is a barrister at Lamb Chambers