Is an unlawfully converted commercial premises a house?

They are still at it in the higher courts arguing about whether a variety of different types premises could qualify as a house reasonably so called under the Leasehold Reform Act 1967, so as to allow the tenant to forcibly acquire the freehold from their landlord. Under the 1967 Act the tenant has the right to acquire the freehold of their leasehold house in exchange for the payment of a premium calculated according to a statutory formula.

The oft asked question is what is a house reasonably so called? Recent case law has seen various commercial tenants or tenants of premises with a dominant commercial use try to argue that the right under the Act applies to them.

The latest of this line of cases reached the Court of Appeal and judgment was given earlier this year in Henley and another v Cohen. The simple question on appeal was whether a ground floor shop with a first floor that had been converted into a flat be described as a house, so as to entitle the tenant to acquire the freehold? If you have been paying attention to the recent line of cases on this issue, then you might be able to take an educated guess at the answer.

The Court of Appeal decided, unsurprisingly, that it wasn’t. It followed the reasoning from last years Hosebay cases and determined that because the premises were neither adapted for residential use at the date of the lease or ever used as such until recent works shortly before the notice purporting to exercise the right to enfranchise. The new residential accommodation upstairs was smaller than the downstairs commercial element and there was not a direct access between them. The judge was also unimpressed that the first floor conversion was unlawful and commented that such action should not be allowed to found the basis of an enfranchisement claim but the was not strictly part of his judgment.

Because the test of what is a house reasonably so called is so highly fact sensitive, this is unlikely to be the last of these cases that we will see.

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About leaseholdlawyer

Solicitor
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