Leasehold enfranchisement – Section 2(1) of Leasehold Reform Act 1967 – Meaning of “house” – Appellant seeking to enfranchise property – Property originally designed as house but part subsequently used for commercial purposes – Upper residential floors dilapidated as at date of notice – Whether “designed or adapted for living in” – Appeal allowed
The appellant was the tenant of an 18th century property in London W1. The second respondent was the appellant’s immediate landlord and held a headlease from the first respondent freeholder. The appellant’s predecessor in title had served notice to acquire the freehold under the leasehold enfranchisement provisions of the Leasehold Reform Act 1967. By their counternotice, the respondents disputed the right to acquire the freehold on the ground that the property was not a “house” within the meaning of section 2(1) of the Act, since, at the date of the tenant’s notice, it was not a “building designed or adapted for living in and reasonably so called”. The respondents maintained that the property could not be said to have been designed or adapted for living in when, at the relevant date, it was not physically fit for immediate residential occupation.
The property had originally been built as a single house with a basement, a ground floor and four upper floors, but it had been divided in the 1940s, with the upper three floors being fitted out as a residence and the lower floors let for commercial use. Commercial use ceased in the early 1990s, and residential occupation of the remainder ended several years thereafter. At the date of the notice, the property was vacant and the upper three floors had been stripped back to the basic structure by the removal of plaster, ceilings and floorboards.
The appellant’s application for a declaration, vindicating its right to acquire the freehold, was refused in the county court and in the Court of Appeal. The judge at first instance held that the words “designed or adapted for living in” connoted that there must be somewhere to sleep, cook, wash and live. The Court of Appeal held that the property could not be said to have been designed or adapted for anything at the relevant date because of its state of serious dilapidation. The appellant appealed.
Held: The appeal was allowed.
For a property to be a “house” for the purposes of section 2(1) it had to fulfil two requirements, namely that: (i) it was designed and adapted for living in; and (ii) it could reasonably be called a house. Although the former requirement was largely concerned with the physical state of the property, as a matter of ordinary language it necessitated, first, a consideration of the property as it was initially built, and the purpose for which it was originally designed, and second, a consideration of whether work that had subsequently been carried out had changed the original design of the property so that it had been adapted for another purpose. Section 2(1) was not concerned with whether a property was physically fit to be lived in at the relevant date; there was no policy justification for such a requirement, which could lead to uncertainty. The requirement was that the property must either have been originally designed for living in or subsequently physically adapted for that purpose.
The property in question was, at the relevant date, designed or adapted for living in within section 2(1). The fact that it had become internally dilapidated and incapable of beneficial occupation without the installation of floorboards, plastering, rewiring and replumbing did not detract from the fact that it had, when first built, been designed for living in, and nothing had subsequently happened to change that. Although internal structural works had been carried out from time to time throughout its history, it was probable that the layout, in terms of internal walls, partitions and staircases, had changed little since it was built, and the upper three floors had always been laid out for residential use.
Although it was arguable that the property had been “adapted” in the 1940s, for business use on the lower floors, and for residential purposes on the upper floors, that did not affect the outcome of the appeal. It would mean that the property had been adapted for mixed business and residential purposes; a property did not need to be adapted solely for living in to be a “house”.
Per curiam: An issue remained open as to whether a property that had originally been designed for living in, but had subsequently been adapted to another use, would be a “house” within section 2(1); that question did not arise on the instant appeal.
Edwin Johnson QC (instructed by Butcher Burns) appeared for the appellant; Anthony Radevsky and Mark Sefton (instructed by Boodle Hatfield) appeared for the respondents.
Sally Dobson, barrister
