No.1 Deansgate wins epic RTM battle, as freeholder throws in the towel at the Court of Appeal

The freeholder of Manchester’s prime No.1 Deansgate blinked first and dropped a Court of Appeal action to block a right to manage application.

Residents at No.1 Deansgate, who include footballers Ryan Giggs and Phil Neville, Corrie star Helen Worth and Take That singer Jason Orange – have already spent £30,000 on the RTM marathon.

After winning their case at the LVT and then the upper tribunal, freeholder TRW Pensions – or CBRE Global Investors which manages the asset – asked in writing for leave to appeal to the Court of Appeal earlier last year.

That, too, was turned down, but the freeholder was insisting on a full hearing before surrendering the lucrative management contract at the site.

“A week before the hearing they threw in the towel,” says residents’ leader Steve Birkbeck.

“Thank God they did. We would have seriously had to consider whether we were going to fund this in the Court of Appeal.”

“We did have to ask whether it was worth continuing because of the financial risks involved. Surely that should not happen when we were asking for something that is a right in law?”

While service charges at the 82 flat block, with six commercial units, had been £558,000 in 2008, last year they had come down to £400,000.

“Some residents thought that we had already made huge improvements and had brought the service charges down. So they were tempted to stop the litigation for right to manage.

“Others knew that the freehold could easily be sold on to someone else who would appoint a new managing agent and then we would have to start the whole thing up again.

“Other residents finding themselves in the same position as ourselves may not be in a position financially to fight well funded landlords. That’s very wrong.”

The issue at No.1 Deansgate was whether the building was connected to its neighbour because of a weather strip between the two.

In his ruling in the Upper Tribunal, Judge Nicholas Huskinson said: “I was told that if the weathering features between the building and the neighbouring buildings were removed then there would be a gap between the buildings down which one could notionally drip a pebble so that it fell vertically to the ground between the buildings.”

This has led to the website Manchester Confidential to dub the dispute “Pebble-gate”.

As with many efforts to frustrate leaseholders’ right to manage in the courts, the freeholder’s lawyer was junior barrister Justin Bates, of Arden chambers.

At the LKP round-table in Westminster on January 29, Phillip Rainey, QC, of Tanfield, referred to a “cottage industry” to frustrate right to manage, perhaps with Mr Bates’ activities in mind.

The showdown at No.1 Deansgate came in October when a week before an oral hearing on whether they would be granted leave to appeal, the freeholders backed down.

There followed a 90-day cooling-off period and then finally on January 25 residents acquired the RTM.

Management of the building was handed over the same day to Block Property Management, under owner Mark Habib.

Mr Habib said: “The residents of No.1 Deansgate want a building that is safe and fully maintained, but want to be able to have their say on important matters affecting their home and wallet. They now have the power to do this.

In reporting the case, Manchester Confidential, paid tribute to the Leasehold Knowledge Partnership, which first reported the story: “a boring name for an interesting campaign site dedicated to ‘keeping the wolves from your door’ “.

Manchester Confidential‘s report is here

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