I’m not great at making predictions at the beginning of each year but one thing I do know is that the infamous case of Lexgorge Limited v Howard de Walden Estates Limited is due to be heard by the Supreme Court later on this year. You may remember this was the case which allowed a building which has primarily been occupied as office premises to be enfranchised under the Leasehold Reform Act 1967.
As far as I am aware this has not led to a deluge of claims by commercial tenants for force their landlords to sell “converted” premises to them but the case did tie together a variety of other authorities to create a test as to whether a building qualifies under the 1967 Act:
1. Was the building designed or adapted for living in at the date of construction?
2. Was the building excluded from the definition of a house because it could not be a “house reasonably so called”?
3. Were there any exceptional circumstances to justify the building not reasonably being called a house?
The court should then consider:
4. The building’s prescribed and predominant use.
5. The lawfulness of the user.
6. The actual, lawful and predominant user and whether the residential accommodation was ancillary to the other use.
The result of that case at first instance was that it was decided that the building was considered to be a house and the first appeal went against the landlord. The Court of Appeal held that just because the building was being used wholly for office purposes didn’t mean it could not reasonably be called a house. Had the upper floors of the property been empty, there was no doubt that it was a house and the external character and appearance was that of a house. Further, it was described as “residential or professional premises” in the lease and the lease permitted substantial residential use.
That said, it does seem slightly perverse that legislation that was enacted to allow leasehold tenants of houses the right to buy the freehold, rather than commercial occupants of offices. It appears to be that basic premise that the landlord will be relying upon in the appeal, ie if a building is no longer used substantially or exclusively as a house or is in no use at all, then how can it be a house. Watch this space!