Supreme Court stops occupiers from enfranchising commercial premises

In a brave move, the Supreme Court has allowed appeals by two London landlords in Day v Hosebay and Howard de Walden v Lexgorge and clarified what can reasonably be called a house under the Leasehold Reform Act 1967. Senior Associate, Tim Reid, applauded the unanimous decision for its clarification of the law: "It has been confirmed that if a property was adapted some time ago for commercial use and is occupied by a commercial entity or for commercial purposes rather than as a residence, it cannot reasonably be called a house." Background The 1967 Act was drafted to redress the balance between freeholders and their residential tenants by enabling leaseholders to extend their leases or buy the freehold. Changes in property law in 2002 removed the residency requirement as so many occupiers held their leases through a company. Following this change, the only real hurdle to enfranchisement was the condition that the property be designed or adapted for living in and could reasonably be called a "house". The question that this raised was whether houses which had subsequently been adapted for commercial use could also be enfranchised. This ambiguity led to speculative applications by commercial tenants to acquire the freehold of properties which had been converted for commercial use. The Supreme Court has decisively closed this loophole by confirming that the Court should avoid conferring rights going beyond those which Parliament intended. If a property was adapted for commercial use and is occupied for commercial purposes, it cannot be called a house and tenants cannot enjoy a right of enfranchisement.

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