Leasehold Reform Act 1967 – Enfranchisement – “House” – Property comprising flats and shops – Tenant claiming entitlement to acquire freehold – Building being designed or adapted for living in – Whether property qualifying for enfranchisement as house “reasonably so-called” within section 2(1) of 1967 Act – County court finding property not house for purpose of statutory definition – Appeal dismissed
The appellant was tenant of a property in central London under a lease granted in 1986. The property had been built in 1888 with an overall square footage of 20,000 square feet and consisted of a basement, ground and five upper floors, comprising six residential suites, one on each floor, one housekeeper’s flat and three small shops. There had been alterations to the internal layout of the building so that, in 2010, there were eight flats and the retail component of the property was just under 7% of its total area.
In September 2010, the appellant served a notice on the respondent landlords under section 8 of the Leasehold Reform Act 1967, to acquire the freehold of the property. An issue arose whether the property qualified to be enfranchised as a building designed or adapted for living in and a house reasonably so-called within section 2(1) of the 1967 Act. It was common ground that the property was designed or adapted for living in and that it was divided horizontally into flats or maisonettes. Therefore the narrow issue was whether the property came within the definition of “house” for the purposes of section 2(1).
The county court (Hazel Marshall QC) concluded that the property was a block of flats with three shop units which could not reasonably be called a “house” at all, let alone in ordinary parlance so that it did not fall within section 2(1). The appellant appealed.
Held: The appeal was dismissed.
The words “reasonably so-called” in section 2(1) were intended to be words of limitation. Their purpose was to exclude buildings that would otherwise come within the other parts of the definition. The mere fact that a building might be called something other than a house was not sufficient to trigger that exclusion. As long as a building could reasonably be called a house, it was within the definition, even though it might also reasonably be called something else. Whether a building could reasonably be called a house or something else was a question of appellation. The question was not whether it was possible to call a building a house but whether it was reasonable to do so. The clear consensus of judicial opinion was that a purpose built block of flats could not reasonably be called a house. Such was the strength and consistency of the consensus that it would be wrong to depart from it: Lake v Bennett [1970] 1 QB 663; Tandon v Trustees of Spurgeon’s Homes [1981] 1 EGLR 66, (1981) 258 EG 553; Malekshad v Howard de Walden Estates Ltd [2002] UKHL 49, [2003] 1 EGLR 151; Prospect Estates Ltd v Grosvenor Estates Ltd [2008] EWCA Civ 1281, [2009] 1 EGLR 47, [2009] 02 EG 86 followed.
In the present case, the structure and use of the building had hardly changed since it was first erected, which made the extensive historical research undertaken by the parties largely irrelevant. In the case of a building predominantly used for residential purposes, whether it could reasonably be called a house would depend primarily on its external and internal physical characteristics. In the absence of very unusual factors, a building constructed, laid out and used as a block of substantial self-contained flats throughout its 120 years of existence could not reasonably be called a house. In this case, there was the added feature that the building was not a wholly residential building but also included the three shops: Hosebay Ltd v Day [2010] EWCA Civ 748, [2010] 3 EGLR 66, [2010] 38 EG 106, [2010] PLSCS 181 followed.
Stephen Jourdan QC (instructed by Payne Hicks Beach) appeared for the appellant; Philip Rainey QC (instructed by Pemberton Greenish LLP) appeared for the respondents.
Eileen O’Grady, barrister
