JLK Ltd v Ezekwe

Landlord and tenant – Service charges – Dwelling – Student accommodation comprising demised bed-sits with shared use of lounges, kitchens and dining space – First-tier Tribunal assuming jurisdiction to consider service charges for bed-sits as units were “dwellings” under section 38 of the Landlord and Tenant Act 1985 – Landlord appealing – Whether bed-sits being “part of a building intended to be occupied as a separate dwelling” – Whether tribunal having jurisdiction in relation to service charges – Appeal allowed The appellant was the landlord of Alexander Terrace, a large building on four floors, erected in the 19th century as headquarters of the Liverpool Fire Brigade. In 2012, it was converted to provide 93 units of residential accommodation intended for occupation by students. All but six of the units comprised a bed-sitting room with en suite facilities (the remainder had the use of shared showers and toilets). Each of the units was let on a long lease which demised the unit together with the right to use communal kitchens, lounges, showers and toilets situated on the same floor. The respondent leaseholders made applications under section 27A of the 1985 Act concerning service charges payable to the respondent. An issue arose whether the First-tier Tribunal had jurisdiction under the 1985 Act to determine the applications. The FTT would only have jurisdiction, and the respondents would only be entitled to the protection afforded by sections 18 to 30 of the 1985 Act, if the units were “dwellings” within the meaning of section 38. The FTT decided that the units were “dwellings” and ruled that it had jurisdiction to determine the applications under section 27A. The appellant appealed. The issues were: (i) whether, for a unit of accommodation to be a “dwelling” for the purposes of the 1985 Act, it was necessary that it should be used as, or be intended to be used as, someone’s home and, if so, whether the units satisfied that requirement; and (ii) whether, in any event, each of the units was occupied, or intended to be occupied, as a “separate” dwelling, or whether the availability of communal facilities meant that the necessary element of separateness was missing. Held: The appeal was allowed.  (1) For the purpose of section 38 the question regarding the subject of the letting was simply whether the premises were a building or part of a building. That required consideration of the physical characteristics of the premises, not whether they were someone’s home. Whether a building or part of a building was “occupied or intended to be occupied as a separate dwelling” required a consideration of the objective purpose for which it was occupied or intended to be occupied. That purpose would often be apparent from the design of the unit itself but, as in this case where occupation for any purpose other than as or incidental to a private dwelling was prohibited, the terms of the letting might also be significant. If part of a building was physically capable of being occupied as a separate dwelling there was nothing in the language, context or purpose of sections 18 to 30 of the 1985 Act to require additionally that it had to be occupied as someone’s home: Horford Investments Ltd v Lambert [1976] Ch 39, Uratemp Ventures Ltd v Collins [2001] 3 EGLR 93 and Oakfern Properties Ltd v Ruddy [2006] 3 EGLR 30 considered. King v Udlaw Ltd [2008] 2 EGLR 99 disapproved. The fact that six of the units had no washing facilities of their own and depended on communal facilities would not have been sufficient to disqualify them as dwellings for the purpose of the Rent Acts or the Housing Act 1988. Nor would the absence of cooking facilities in any of the units. Section 38 was not intended to have a narrower application. The inclusion in the leases of a power for the landlord to make regulations in the interest of good estate management was a standard feature of residential lettings, and the fact that the manager had imposed stricter limitations on student residents than might normally be encountered was not material. The fact that the units were let with the intention that the occupiers should share a number of facilities, including kitchens and lounges, was relevant to the question whether each unit was occupied “as a separate dwelling” but did not exclude them from the scope of section 18 to 30 at any earlier stage on the grounds that they could not be someone’s home. (2) The 93 bed-sitting rooms were clearly parts of a building and the contrary was not suggested. They were therefore capable of being dwellings for the purpose of sections 18 to 30 of the 1985 Act, and would be if they were “occupied or intended to be occupied as a separate dwelling”. It was not possible to interpret section 38 of the 1985 Act without regard to meaning which had been given to the expression “as a separate dwelling” for the purpose of the Rent Acts and the Housing Act 1988. It was necessary to consider the effect of the shared living accommodation. The tenant of each unit had the right to share a kitchen, lounge, shower and w.c. with every other tenant on the same floor. It could not then be said that the tenant was the tenant of a part of the building which was occupied or intended to be occupied as a separate dwelling. The bed-sitting room plus the right to use the communal space would not satisfy the requirement because the tenant was not tenant of the whole of that accommodation, but only of part of it; the bed-sitting room itself would not do, because that was not occupied as the tenant’s dwelling, but only as part of it. Accordingly, the units were not dwellings because they were not occupied or intended to be occupied as separate dwellings: Baker v Turner [1950] AC 401 applied. Neale v Del Soto [1945] 1 KB 144, Cole v Harris [1945] 1 KB 474 and St Andrews Place (Liverpool) RTM Company Ltd v JLK Ltd (unreported, 21 January 2016) considered. Justin Bates (instructed by EAD Solicitors LLP, of Liverpool) appeared for the appellant; Adrian Carr (instructed by Bury & Walkers LLP, of Leeds) appeared for the respondents. Eileen O’Grady, barrister Click here to read a transcript of JLK Ltd v Ezekwe.