Laura Bushaway and Nicholas Grant review a decision on the meaning of “live/work” in a lease and planning permission.
Question
I am the tenant of a flat. I am required under the terms of my lease not to use the premises or any part otherwise than as a live/work unit in accordance with the planning permission for the wider development. I work in education and do not work from the premises. Do the terms of the lease mean I must both live and work from the premises or can I do either?
Answer
The answer will depend both on the terms of your lease and on the specific terms of the planning permission for your property. The term “live/work” is ambiguous so, if the planning permission and plans don’t include clear indications that you need to both live and work from the flat, it is likely you can live and/or work from there.
Explanation
A similar issue recently made its way to the Court of Appeal in AHGR Ltd v Kane-Laverack and another [2023] EWCA Civ 428; [2023] EGLR 23. In that case, the lessees had a 999-year lease of a flat in Bermondsey Street, London.
The flat was situated in a wider development which had, in 2001, been granted planning permission for a mixed development including 13 business units, 14 residential flats and one “live/work” unit. The planning permission contained no conditions relating to live/work units (ie there were no conditions saying the “live” use had to be ancillary to the “work” use, which are found in some permissions). The plan incorporated into the planning permission marked the whole unit as “work/live”, again in contrast to some permissions which specifically split out a “living” space and a “working” space. The issue between the landlords and tenants was whether live/work meant “live and work” (so the tenants had to live and work there) or live and/or work (so they could choose which they did).
The lease of the flat contained a covenant against the use of the premises other than as a “live/work unit” in accordance with the terms and conditions of the relevant planning permission. The parties agreed that live/work in the lease was meant to be construed in the same way as the planning permission. So the case turned on interpreting that permission.
The Court of Appeal considered that in this specific context “live/work” meant “live and/or work”, for three reasons. First “live/work” is ambiguous. Second, the plan of the flat did not subdivide it, which left it to the leaseholders to decide where they lived or worked. Finally, the context of planning law was important – a leaseholder could be subject to criminal proceedings if in breach of planning control, so if it had been intended for leaseholders to both live and work from the premises, that would have needed to be in clear and express language.
Some additional material was referred to the Court of Appeal. This included some 1999 supplementary planning guidance on live/work units and a separate plan of the flat which had initially been included in the planning application but was swapped out by the applicant and did include designated living and working areas. It also considered a planning officer’s comment during the planning process that the live/work unit looked just like a flat. The Court of Appeal did not need to decide the case by reference to any of this material but considered that, if it had done so, it would have supported the decision reached.
The court did not consider the amount of damages which may have been payable to the landlord if the leaseholders had breached the terms of the lease. This was an issue in the County Court but was not appealed. The landlord had sought £60,000, calculated on the basis of a hypothetical negotiation. That figure reflected the difference in value of a residential flat and a live/work unit at £110,000 with the addition of £10,000 to take into account the tenants not having to move from the premises. The resulting £120,000 was then divided between the landlord and tenants. The County Court held that negotiating damages was the correct approach but preferred the tenants’ expert evidence that live/work accommodation was not less valuable than residential accommodation. Accordingly, the County Court would have awarded damages of £5,000 on the basis that it was likely that the tenants could have arranged matters to comply with the covenant by both living and working at the premises.
Applying this decision to your situation (and assuming that there are no other references or definitions of live/work in your lease), this will be a matter of construing your planning permission. This will involve reviewing (a) all of the plans referred to (especially those that relate to similar units); (b) whether the permission includes any conditions or restrictions on live/work; and (c) any other local plan policies and documents it referred to. If the planning permission contains no conditions, specific demarcated areas or other indications of what live/work requires, it is likely that “live/work” would be interpreted to mean “live and/or work”.
Laura Bushaway is a knowledge development lawyer in the real estate disputes team at Charles Russell Speechlys LLP and Nicholas Grant is a barrister at Landmark Chambers
