In Q Studios (Stoke) RTM Co Ltd v (1) Premier Ground Rents No 6 Ltd (2) North Street (Management Company) Ltd [2020] UKUT 197 (LC), the Upper Tribunal (Lands Chamber) has clarified that whether premises constitute a “flat” for the purposes of Part 2 of the Commonhold and Leasehold Reform Act 2002 (the 2002 Act) is an objective test based on the physical characteristics of the premises.
Part 2 of the 2002 Act provides qualifying long lessees of flats with a no fault procedure to take over the management of their building or part of it. For the purposes of s.112(1) of the 2002 Act a “flat” is defined as including a separate set of premises “constructed or adapted for use for the purposes of a dwelling”. A “dwelling” is defined as “a building or part of a building occupied or intended to be occupied as a separate dwelling”.
The respondents, Premier Ground Rents No 6 Ltd and North Street (Management Company) Ltd were respectively the freeholder owner and management company of Q Studios, North Street, Stoke-on-Trent (the premises). The premises comprised of a purpose-built block of 292 studio accommodation known as “studystudios” and intended for use as student bedsits. Each studystudio was let on a long lease and then underlet to a student.
The studystudios comprised of an en-suite bathroom, double bed, desk, bookcase unit, wardrobe and a small kitchen equipped with a fridge, two-ring hob and microwave. The ground floor of the premises included a communal lounge/cinema room, gym, laundry room and a reception/office.
On 31 July 2019, the appellant right to manage company, Q Studios (Stoke) RTM Co Ltd gave notice to the respondents of its intention to acquire the right to manage the premises. The respondents by way of their counter-notices disputed the claim. The respondents argued that the studystudios did not fall within the definition of a “flat” under section 112(1) of the 2002 Act. They were neither “constructed or adapted for use for the purposes of a dwelling” nor were they “intended to be occupied as … separate dwelling[s]”. The respondents claimed that as temporary term-time residence, the studystudios did not constitute a home for the students. Further, the “dwellings” being occupied were not separate as they consisted not only the studystudios but also the communal facilities.
The appellants applied to the First-tier Tribunal for the claim to be determined, but given the important issues raised the matter was transferred to the UT.
In finding that the studystudios were flats, the UT relied upon the Court of Appeal decision in Aldford House Freehold Ltd v Grosvenor (Mayfair) Estate and another [2019] EWCA Civ 1848; [2019] PLSCS 209. Aldford House concerned the definition of a “flat” in the Leasehold Reform, Housing and Urban Development Act 1993, which was identical to the definition of a “flat” contained in the 2002 Act. The UT found that the requirement for a flat to be “constructed or adapted for use for the purposes of a dwelling” was an objective test based on the physical characteristics of the premises. The terms of the letting and the subjective intention of the developer as to its use were irrelevant. Further, there was no additional requirement that the dwelling had to be a home.
Finally, the UT also found that the studystudios were to be occupied as “separate dwelling [s]” as they each contained all the necessary facilities for sleeping, washing, cooking and eating.
This decision should provide some comfort to qualifying tenants as the “physical characteristics” test limits the scope of enquiry that can be made into whether premises are “flats” for the purpose of the 2002 Act.
Elizabeth Dwomoh is a barrister at Lamb Chambers
