Right to manage – Premises in mixed use – Chapter I of Commonhold and Leasehold Reform Act 2002 – Para 1 of Schedule 6 – Leasehold valuation tribunal finding right to manage not established because non-residential part exceeding 25% of internal floor area – Whether vaults to be excluded in determining floor area – Whether porter’s flat residential where unlawfully converted into offices – Whether wishes of residential tenants relevant – Appeal dismissed
The appellant company applied, under Chapter I of the Commonhold and Leasehold Reform Act 2002, to establish the right to manage a property in on Edgware Road, London W2, on behalf of the residential tenants who lived there. The property contained business premises on the ground-floor and basement levels with 11 flats on the upper floors and one on the ground floor. The respondent was the headlessee and a company that had been formed by the residents held an underlease of the residential parts.
Following an inspection of the premises, the leasehold valuation tribunal (LVT) refused the application, pursuant to para 1 of Schedule 6 to the 2002 Act, on the ground that the non-residential parts of the building, taken together, exceeded 25% of the internal floor area of the premises. In reaching that conclusion, the LVT categorised as non-residential: area (i) some vaults beneath the pavement of Edgware Road that had been converted into an area for wine storage; and (ii) a former porter’s flat, which had become vacant in 1990 and had, in 2004, been stripped out and incorporated into the offices. Although the terms of the headlease required the respondent to use the porter’s flat as “a flat for a caretaker, the head landlord had allowed the office conversion after the fact. A covenant in the underlease requiring the respondent to provide a caretaker to live in the flat was subject to a proviso that that service could be withheld “if reasonable to do so for the more efficient conduct and management of the building”. No such obligation was owed to the residential tenants under their individual leases of the flats.
On appeal, the appellant contended that: (i) the vaults were to be excluded as either not forming part of the demised premises or amounting to common parts; and (ii) the porter’s flat was “intended to be occupied” for residential purposes, within para 1(2)(a) of Schedule 6, in circumstances where the residential tenants wanted a residential porter and the conversion of that flat into offices had been unlawful, having been carried out in breach of covenant with the head landlord, without obtaining that landlord’s prior permission and before planning permission had been granted.
Decision: The appeal was dismissed.
(1) The vaults formed part of the demise. The plan attached to the headlease was a ground-floor plan only and, as such, would not show the subterranean vaults, while one of the plans attached to the underlease did show the vaults. The vaults were accessible only from the basement and were properly a part of that property even though they were not shown on the ground-floor plan. The LVT had inspected the premises and formed a clear view, from which the appellant’s expert had not dissented, that the vaults formed part of the demise and were non-residential in character. That finding was primarily one of fact, disclosed no error of law and was correct. There was no evidence as to the use of the vaults as common parts and the LVT had been correct not to treat them as such.
(2) Whether the porter’s flat was, at the relevant date, occupied or intended to be occupied for residential purposes was a question of fact. The LVT had correctly had regard to the respondent’s intentions not to use the flat for such purposes and had properly ignored the wishes said to be held by the occupiers of the flats, who had no right to seek the use of the flat for a residential porter: Posner v Scott-Lewis [1986] 1 EGLR 56; (1985) 277 EG 859 distinguished. Even if the wording of the relevant covenant in the underlease had been such as to allow the underlessee to bring proceedings for specific performance, such proceedings would fail owing to the delay, since 1990, in enforcing the covenant. The LVT had been correct in holding that the porter’s flat was neither occupied nor intended to be occupied for residential purposes at the relevant date: Gaingold Ltd v WHRA RTM Co Ltd [2006] 1 EGLR 81; [2006] 03 EG 122 considered.
Colin Challenger (instructed under the direct access scheme) appeared for the appellant; Stanley Gallagher (instructed by Needleman Treon) appeared for the respondent.
Sally Dobson, barrister
