Enfranchisement claims by commercial tenants seeking to buy the freehold
The Court of Appeal has ruled that a building designed as a house, but used entirely as an office could be considered a “house” for leasehold enfranchisement purposes.
The floodgates are open, for all sorts of buildings that nobody would perceive as being a house.
This ruling is clearly going to have a huge impact on a wide range of properties not only in London, but around the country.
Whether a building was a “house” for the purposes of section 2 (1) of the Leasehold Reform Act 1967 should be determined “at least in the main” by its physical appearance and character.
The judge said “One could, it seems to me, quite naturally describe a building built as a town house, which had subsequently been internally converted into offices, as a ‘house used as offices’: hence it would ‘reasonably [be] called’ a house, even though it was not used for residential purposes, and even if it was not permitted to be so used.
“If most people were asked whether a building could reasonably be called a house, I am not convinced it would occur to them to ask about the permitted use under any lease, or that they would be influenced if told what the permitted use was.”
He said: “The 1967 Act was originally intended to assist residential tenants occupying
their houses as their only or main residence to acquire their freeholds, but it can extend to buildings exclusively used for business purposes.”
Many commercial tenants will now seek to enfranchise. A lot of companies were waiting for this decision, particularly in central London, where so many properties built as houses are now in office use.