Leasehold reform — Enfranchisement — Claimant leaseholder exercising right to acquire freehold — Whether property constituting a “house” qualifying for enfranchisement — Commonhold and Leasehold Reform Act 2002 — Claim allowed
The claimant held a long lease of a council-owned property in a parade of buildings that comprised shops on the ground floor and residential accommodation on the upper floors. The lease was for 99 years from September 1928, when the parade had been built to provide shops for a large local authority housing estate situated nearby.
The claimant served notice, under the Leasehold Reform Act 1967, of its intention to exercise a right to acquire the freehold of the property. Although the claimant satisfied most of the statutory requirements for enfranchisement, a question arose as to whether the property constituted a “house” within section 2(1) of the 1967 Act.
The claimant relied on Tandon v Trustees of Spurgeon’s Homes [1982] 2 EGLR 73; (1982) 263 EG 349, in which the House of Lords held that a terraced shop on the ground floor with living accommodation above constituted a “house” within the Act.
The defendants submitted that, in this case, the property could not reasonably be called a house within the meaning of the Act owing to the cumulative effect of: (i) the independent nature of the residential and commercial accommodation; (ii) the commercial setting of the property; (iii) the fact that it comprised purpose-built retail and residential accommodation; and (iv) the fact that the tenant did not live at the property, but let both elements separately. They added that it was important to note that when the judgment in Tandon was delivered, the right to enfranchise was contingent upon the satisfaction of a residence test, which was removed from the 1967 Act by the Commonhold and Leasehold Reform Act 2002.
Held: The claim was allowed.
Premises used for mixed residential and retail purposes could, by law, constitute a “house” within section 2(1), depending on the character of the premises at the time of the tenant’s enfranchisement notice. The phrase “character of the premises” was not a term of art and was inherently imprecise, including not only the building’s appearance but also the setting in which it was placed: Tandon applied.
Parliament had deliberately removed the residence requirement and must have known that its removal would allow non-resident leaseholders to enfranchise under the 1967 Act if the building could reasonably be called a house. The test was objective and the tenant’s use of the premises was not a factor in determining whether the premises constituted a house reasonably so-called.
In the present case, a reasonable man, having read both the definition of “house” in the 1967 Act and the speech of Lord Roskill in Tandon, and knowing that the 2002 Act had removed the residence requirement, would say that the property constituted a house within the 1967 Act.
Anthony Radevsky (instructed by Wallace LLP) appeared for the claimant; Stan Gallagher (instructed by the legal department of Barnet London Borough Council) appeared for the defendants.
Eileen O’Grady, barrister
