Student accommodation and service charges

Residential service charge disputes are a frequent source of litigation. Challenges can be made under the Landlord and Tenant Act 1985. Under section 38(1)  a ‘dwelling’ is defined as a building or part of a building occupied or intended for occupation as a ‘separate dwelling’. What is the position then if occupiers share some of the accommodation with others living in the building? Does this prevent occupation as a ‘separate dwelling’? This has just been considered in JKL Ltd v Ezekwe [2017] UKHT 277, which concerns a large building converted into 93 residential units for occupation by students. In all but six cases the units consisted of a bed-sitting room with en suite facilities (occupiers of the other six shared bathrooms and toilets). All of the occupiers shared kitchens and general living areas. Each unit was sold on a long lease to be sublet to students. In the usual way, the leases provided that the leaseholder had to reimburse the landlord for its costs in managing the building. Fifty-six leaseholders sought to challenge the charges in the First-tier Tribunal (FTT). The landlord argued that the FTT has no jurisdiction as the units were not ‘separate dwellings’ as required by section 38. The FTT decided that it did. The landlord appealed. The Upper Tribunal dismissed the landlord’s argument that to be a dwelling a unit must be a ‘home’ (following a decision of the House of Lords in Uratemp Ventures v Collins [2002] 1 AC 301). It also declined to follow the conclusion of the UT in King v Udlaw Ltd [2008] L. & T.R. that the 1985 Act applies only to those occupying as their home. But are the units occupied as a ‘separate dwelling’? To get to the answer the UT reviewed the development of the statutory codes for regulating private rentals – the Rent Act 1977 and the Housing Act 1988. Cases had decided that the sharing of ‘living accommodation’ excluded protection (see, for example. Barker v Turner [1950] A.C. 401). But to preserve tenant’s rights, the legislation was amended with the result that only sharing with the landlord could prevent the tenancy being ‘protected’ under the 1977 Act, or ‘assured’ under the 1988 Act. For example, section 3 of the 1988 Act provides that where there is a sharing of accommodation with someone other than the landlord, the tenancy is ‘deemed’ to be assured. This ensures that tenants can enjoy the protection of assured tenancies even though they are sharing accommodation with other residents in the building. But there is no such ‘deemed ‘ provision in section 38 of the 1985 Act so the law developed in the cases on the effects of sharing have to be applied. As a result the leases of these units are not of separate dwellings. The FTT does not, therefore, have jurisdiction to determine service charge disputes. One wonders whether if the students had assured shorthold tenants, they could challenge the rent in the FTT? However, this and other points have become academic as the local housing authority has made a closing order and the residents have in consequence had to leave. James Driscoll is a solicitor and a writer