The owners of a so-called live/work property in Bermondsey, SE1, can choose whether they want to live or work in the building and aren’t obliged to do both, the Court of Appeal has ruled.
Live/work properties, a concept introduced from the US, are designed for both accommodation and business use. Typically they will have no more than two bedrooms and at least 40 sq m of specific workspace suitable for the full range of B1 activities, from office work to light industry. Often they are not subject to business rates and the intention is that the inhabitants both live and work on the premises.
Increasing numbers of them are being used as flats or small offices, and not both, which has led to some councils taking legal action.
However, the Court of Appeal found last week that a live/work property on the Bickels Yard mixed-use development on Bermondsey Street can be used in whichever way the owners please owing to an ambiguously worded lease.
The case was brought by Bickels Yard freeholder AHGR against residents Luke and Peter Kane-Laverack, who own a 999-year lease dating from 2002.
While both of them had been working in the property as well as living in it, neither had been operating a business. Luke Kane-Laverack is an NHS GP and Peter Kane-Laverack is a barrister.
AHGR sued the leaseholder in the High Court, alleging they had broken a covenant in the lease stating that the property must be used as a live/work unit.
They lost, with a High Court judge ruling they had lived and worked in the unit, and that the phrase “live/work” means “live and/or work”, not “live and work”.
The freeholder appealed and a ruling handed down by the Court of Appeal last week again backed the leaseholders.
The ruling was written by Lord Justice Dingemans, who said “in the very particular circumstances” of this case, the phrase “live/work” means “live and/or work”.
This, he ruled, was because of ambiguous language in the legal documentation, and in the plan that was used to obtain planning permission the whole unit was marked “live/work”. It could have marked some areas of the unit as “live” and others as “work”.
“This meant it would be for the leaseholder to determine where to live and where to work,” the judge said.
“Leaving such matters to the discretion of the leaseholder suggests a permissive approach to the phrase ‘live/work’, meaning the leaseholder might decide only to live at the premises, or only to work at the premises, or to do both in parts of the premises at their choosing.”
He added: “Because a leaseholder might be served with enforcement notices and might ultimately be the subject of criminal proceedings for breach of planning permission, then if it was intended that lawful use of the premises required both living and working, that would be spelled out using language that was clear and unambiguous.”
The court found that in these circumstances it was unnecessary to rule on whether the occupiers had been working in the property prior to the lawsuit.
The court dismissed the appeal.
AHGR Ltd v (1) Dr Luke Kane-Laverack and (2) Mr Peter Kane-Laverack
Court of Appeal (King LJ, Dingemans LJ, Snowden LJ) 21 April 2023
