UK: A House Is A House… "Reasonably So Called"

Last Updated: 13 December 2012
Article by Georgina Redsell

In early October 2012, the Supreme Court handed down a decision clarifying what is a "house" under the Leasehold Reform Act 1967 (the "1967 Act").

The 1967 Act allows tenants under long leases of houses to compulsorily acquire the freehold of their properties for a premium. The 1967 Act was subject to significant reform in 2002 which removed the requirement for the applicant tenant to be resident in the property. However, the property must be a "house" within the statutory definition. One aspect that was not clear was whether this included "houses" which had subsequently been converted for non-residential use.

Section 2(1) of the 1967 Act defines a "house" as follows:

"..."house" includes any building designed or adapted for living in and reasonably so called, notwithstanding that the building is not structurally detached, or was or is not solely designed or adapted for living in, or is divided horizontally into flats or maisonettes; and

(a) where a building is divided horizontally, the flats or other units into which it is so divided are not separate "houses", though the building as a whole may be

(b) where a building is divided vertically the building as a whole is not a "house" though any of the units into which it is divided may be."

The Supreme Court focused on, and looked at the authorities in relation to the main part of the definition i.e (i) is the building one "designed or adapted for living in"? and (ii) is it a "house... reasonably so called"? The Court found that the statute had to be interpreted with its original purpose in mind.

The Supreme Court's decision overturned two Court of Appeal cases. The first case, Day v Hosebay [2012] UKSC 41, involved properties in Rosary Gardens, South Kensington which were originally built as separate houses as part of a late Victorian terrace but were currently being used as short term accommodation for tourists and other visitors to London. The property comprised individual rooms for letting out (including beds, storage space, cooking facilities and "wet rooms" with shower, basin and WC). One room was used for reception/office purposes and one room for storage.

The second case, Howard de Walden v Lexgorge [2012] UKSC 41, related to 48 Queen Anne Street, in Marylebone which was built in the early 18th century originally as a house comprising five floors in a terrace but was later used for commercial purposes. The whole building was used as an office in 2005 but by the time of trial in October 2009 the upper two floors use had reverted to residential. The lower floors continued to be used as offices.

With regard to the property in Hosebay the Court found that a building which is wholly used as a "self catering hotel" is not "a house reasonably so called." The fact that the property had the external appearance of a town house should not have been given such determinative weight by the Court of Appeal. The fact that buildings looked like houses was not sufficient to displace the fact that their use was entirely commercial. For the same reason, the property in Lexgorge was also not a "house". A building used for offices, whatever its original design or current appearance, was not "a house reasonably so called."

Therefore, even if a property looks like a house and is described as a house for certain purposes, if its use is now commercial it will not qualify as a house for the purposes of the 1967 Act. The judgment is a certain victory for landlords who own valuable converted buildings and who can now be confident their tenants will not be able to obtain the freehold by way of enfranchisement

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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