The statutory provisions relating to collective enfranchisement under the Leasehold Reform, Housing and Urban Development Act 1993 apply to self-contained buildings. A part of a building may also qualify, but it will have to satisfy two tests. First, it must be capable of being vertically divided from, and of being redeveloped independently of, the remainder of the building. Second, the services must be independent of those provided to the remainder of the building. If they are not independent, it is necessary to be able to separate them without having to carry out work that is likely to result in a significant interruption in the provision of services to the rest of the building.
What does this mean in practice? There was no authority on this until the decision in Oakwood Court (Holland Park) Ltd v Daejan Properties Ltd [2007] PLSCS 10. The premises in this case were served by a boiler house that was also needed by the landlord to provide services to the remainder of the building. The judge ruled that the services were interdependent – and that it would be impossible to separate them without causing significant interruption to the provision of services to the rest of the building. Thus, the premises did not qualify as a self-contained part of a building.
The statutory provisions relating to collective enfranchisement under the Leasehold Reform, Housing and Urban Development Act 1993 apply to self-contained buildings. A part of a building may also qualify, but it will have to satisfy two tests. First, it must be capable of being vertically divided from, and of being redeveloped independently of, the remainder of the building. Second, the services must be independent of those provided to the remainder of the building. If they are not independent, it is necessary to be able to separate them without having to carry out work that is likely to result in a significant interruption in the provision of services to the rest of the building. What does this mean in practice? There was no authority on this until the decision in Oakwood Court (Holland Park) Ltd v Daejan Properties Ltd [2007] PLSCS 10. The premises in this case were served by a boiler house that was also needed by the landlord to provide services to the remainder of the building. The judge ruled that the services were interdependent – and that it would be impossible to separate them without causing significant interruption to the provision of services to the rest of the building. Thus, the premises did not qualify as a self-contained part of a building. The judge explained that the legislation contemplates a simple sale of self-contained premises that are capable of operating independently of the rest of the building. It focuses on alterations to the configuration of existing services. So the purchasing company was unable to satisfy the requirements in the legislation by providing new, or alternative, services that would involve a lengthy programme of works and significant alterations to the enfranchising premises. In case she was wrong, the judge also went on to consider whether the work required to disconnect the enfranchising premises from the boiler house, and to provide alternative services, was likely to significantly interrupt the provision of services to the rest of the building. She debated whether: (i) the test was one of overall interruption caused cumulatively to all the services, or (ii) each interrupted service should be considered individually. She concluded that it was necessary to apply both tests. The judge considered what would constitute a “significant” interruption in service, and ruled that this was a matter of fact and degree. Prospective interruptions must be viewed in the context of a single, discrete transaction – and not as part of a long-drawn programme or process that could be postponed until the weather improved. The duration of any prospective interruption was important, but the seriousness of the effect of any likely interruption was also relevant. Expert evidence suggested that central-heating services to the remainder of the building would be interrupted for eight hours and that water supplies would be interrupted for 42 hours. Each individual interruption would be “significant” to the tenants of the adjoining building, and the cumulative effect would be even stronger. Allyson Colby is a property law consultant
