Magnohard Ltd v Cadogan decides a block of flats is not a house

Previous authorities on the question of what is a house reasonably so called prompted a number of readers of my blog to get in touch to discuss whether the buildings in which they occupied could be described as “houses” in order that they could acquire the freehold under the Leasehold Reform Act 1967.  Mainly it is commercial tenants who after the decision in Day v Hosebay Ltd and Howard De Walden Estates Ltd v Lexgorge Ltd (which incidentally goes before the Supreme Court on 22 May 2012) want to see if they can acquire their building under this legislation.  Many are prohibited by the fact that they have leases protected by the Landlord and Tenant Act 1954 and are thus automatically excluded from enfranchising.

For a building to qualify under the 1967 Act it must be a house, this includes any building designed or adapted for living in and reasonably so called, notwithstanding that the building is not structurally detached, or was or is not solely designed or adapted for living in.  This is the sort of definition that lawyers love to litigate over!

In the Magnohard case, the property in question was described as consisting of a basement, ground and five upper floors. As built it consisted of six residential suites, one on each floor; one housekeeper’s flat, and three small shops. The housekeeper’s flat had been converted into another flat. All the flats are served by a communal entrance hall, although the former housekeeper’s flat had its own separate street entrance.  There were also alterations to the internal layout of the building which created an additional flat. The shops each had a separate entrance and the retail component of the building was just under 7 per cent of its total area.

The first instance judge thought that “When I ask myself what this building is, my immediate reaction is: “it’s a block of flats”. It’s a block of flats with three shop units, but – it’s a block of flats. It is not a house divided into flats. It is constructed and it is used as a block of flats. As I know (and I do) what the features of the building are, if I were to ask someone “what would you call that building” and they were to respond “a house” my eyebrows would naturally rise and I would think this odd. I would not call this building a house naturally, but only possibly if I were pressed into [doing] so by argument that it was surely “possible”. In those circumstances, it is, in my judgment, not reasonable to call this building a “house” at all, let alone in ordinary parlance.” The Court of Appeal was asked to rule if the judge had been wrong to conclude that the building was not a house and consequently that the tenant was not entitled to enfranchise.

The answer in this case was a simple one.  This building was a purpose built block of flats and was not a house reasonably so called so the first instance judge was correct!

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