Vectis Property Company Limited v Cambrai Court Management Company Limited
Decision date: 22 February 2022
Neutral citation: [2022] UKUT 42 (LC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This Upper Tribunal appeal concerned the enfranchisement price for a nine-flat block where the sole dispute was development (hope) value for two proposed roof flats. The Tribunal held the freeholder did not need an express reservation to develop retained roof/airspace and that the management company's repair covenant extended to the Building as it exists from time to time, so construction would not be legally barred; the landlord's appeal was allowed and the respondent's cross-appeal permissions were refused.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
A landlord who has retained non-demised roof or airspace need not have an express reservation to develop it; any prohibition arises only if the proposed development would legally interfere with the rights of others. Covenants to repair/maintain operate in relation to the Building as it exists from time to time, so a replaced or raised roof forming part of the Building falls within those repair obligations. A letting scheme can, when properly construed, require a management company to join future leases necessary for the scheme to function and does not necessarily fix the number of residential units to those originally built.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
Practical difficulties in accessing and maintaining older roof layers beneath new construction are implementation and valuation matters (affecting cost and risk) rather than legal bars to development. Market evidence, including offers from developers, can be persuasive in assessing development/hope value alongside or instead of detailed residual valuation calculations.