Adriatic Land v Skyline Central One: shared facilities no bar to right to manage, Upper Tribunal rules

The Upper Tribunal has dismissed a landlord's appeal in Adriatic Land 3 Limited v Skyline Central One RTM Company Limited [2026] UKUT 210 (LC), ruling that the presence of cross-building facility rights granted to occupiers of a neighbouring development did not deprive leaseholders of Skyline Central One in Manchester of the right to manage their building under the Commonhold and Leasehold Reform Act 2002.

The case concerned a ten-storey residential block at 50 Goulden Street, Manchester, containing 122 long-leasehold flats. The building sits across the street from a separate development, Skyline 2. In 2006, the developers of both buildings entered into a deed granting reciprocal rights: residents of Skyline 2 were entitled to use the carpark, gymnasium, roof terrace, zen room, concierge and garden facilities within Skyline Central One, with the owner of Skyline 2 contributing approximately half the cost of maintaining those shared facilities. Equivalent rights were granted in the other direction.

When the respondent RTM company served its claim notice in October 2023, the appellant, Adriatic Land 3 Limited, resisted the claim, arguing that the shared facilities arrangement prevented Skyline Central One from qualifying as "self-contained" under section 72 of the 2002 Act.

The First-tier Tribunal (Property Chamber) rejected that argument and found in favour of the RTM company. The appellant was granted permission to appeal on five grounds, all of which ultimately turned on whether section 72 required something beyond structural detachment as a condition of qualification.

Martin Rodger KC, Deputy Chamber President, dismissed the appeal. He held that the qualifying conditions in section 72(1) are "purely physical" and that there is no basis in the statute for introducing additional considerations, such as the practical difficulties of managing premises over which third parties hold rights. The structure of Skyline Central One was agreed to be structurally detached, and that finding was sufficient.

The appellant had placed considerable weight on the Supreme Court's decision in Settlers Court RTM Co Ltd v FirstPort Property Services Ltd [2022] UKSC 1, arguing that it established a principle that an RTM company cannot acquire the right to manage premises whose facilities are used by persons who are strangers to the company. The Tribunal firmly rejected that reading. Settlers Court was concerned with whether the right to manage extended outward to estate facilities located outside the relevant building, not whether third-party rights over facilities within the building could defeat the right altogether. Those were, the Deputy Chamber President held, materially different questions.

He noted that where shared facilities are located within the building itself, no difficulty of dual management responsibility arises. Section 96(2) of the 2002 Act strips the landlord of its management functions on acquisition, and section 97(2) allows the RTM company to agree that the landlord or a third-party manager continues to perform certain functions within the building. Lord Briggs in Settlers Court had himself cited a car park shared with outsiders as a paradigm example of a situation section 97(2) was designed to address.

The Tribunal also declined to read any wider principle into its own earlier decision in The Courtyard RTM Co Ltd v Rockwell (FC103) Ltd [2025] UKUT 39 (LC), which had concerned the distinct question of whether a shared undivided subterranean space could be apportioned between two buildings for the purposes of structural self-containment.

The acquisition date for the right to manage will fall three months after this decision becomes final, in accordance with section 90(4) of the 2002 Act. Either party may seek permission to appeal to the Court of Appeal on a point of law.