Terraced houses which are owned leasehold will usually be enfranchiseable under the Leasehold Reform Act 1967. Occasionally there may be a dispute as to whether the building is a “house” at all. For example, if the building consists of a flat over a shop, does it qualify as a “house”? (This was the issue in the recent case of Jewelcraft Limited v Pressland [2015] EWCA Civ 1111).
Terrace properties can be treated as individual “houses” but what if part of the house to be enfranchised lies under or above part of building which is not part of that house? Here the Act provides, not altogether helpfully, that if that part is a “material part”, the ‘house’ is excluded from enfranchisement (section 2(2)).
The leading authority on this issue is Malekshed v De Walden Estate [2002] UKHL 49, a decision of the House of Lords. It was decided that a house that had a basement which intruded into a neighbouring property by a factor of 2% of the overall basement floor area did not amount to a “material part”. So the house was enfranchiseable.
A recent example is provided by the decision in West End Investments v Birchlea Limited [2015] PLSCS 336. The claimant had a lease of a mews house, part of a terrace of houses. It occupies two stories and it is divided by a flank wall from the house next door, which occupies several stories and is much taller than the mews house. This flank wall extends vertically beyond the roof of the mews house to the full height of the neighbouring house. It was agreed that under the leases of the two properties one half severed vertically of the party wall was owned under each of the two leases. It was also agreed that this external flank wall was a single vertical wall. In other words, part of the flank wall is part of the mews house. (By the time of the appeal, the parties also agreed that the flank wall was a party wall up to the point where it extends beyond the roof of the mews house).
According to the landlord, this excluded the mews house from enfranchisement under section 2(2) of the Act. The claimant leaseholder argued that as the two houses were vertically divided, so the division of the flank wall between the two properties did not amount to an overhang or an underhang.
In county court proceedings Judge Dight decided that the mews house was enfranchiseable. (He also concluded that if he was wrong on this, that the part of the flank wall which lies within the mews house formed a material part of it so that it would not be enfranchiseable).
Dismissing the landlord’s appeal, Mr Justice Carr accepted the reasoning of the Judgement: there was a vertical division of the two buildings, even if there was a degree of overhang or underhang is was de minimus, and as a matter of policy the existence of a party wall should not exclude a house from enfranchisement.
He disagreed, however, with the lower court’s conclusion that the wall could have amounted to a material part of the building. The Judge gained assistance from Hague: Leasehold Enfranchisement which states that only living rooms, bedrooms or kitchens or bathrooms (or parts of such rooms) would amount to a “material part” for these purposes.
James Driscoll is a solicitor, a writer and a mediator
