PP 2013/72

The county court has rejected a claim to enfranchise fully furnished flats used to provide temporary accommodation for a transient population Tenants of blocks of flats have been able collectively to acquire the freeholds of their blocks since the Leasehold Reform, Housing and Urban Development Act 1993 came into force in 1993. The issue that the county court had to decide in Smith and Dennis v Jafton Properties Ltd [16 April 2013] was whether premises that looked like flats satisfied the legislative requirement that they must be “constructed or adapted for use for the purposes of a dwelling”. The premises in question were fully-furnished apartments, created as part of the refurbishment of a building, for use by businesses whose employees were visiting London. The apartments were capable of accommodating a transient population and those who wanted to stay longer. The tenants argued that, if the premises were available to be used as a home, had the potential to be used as a home and, in effect, were sometimes used as the equivalent of a home, then they satisfied the requirement laid down in the legislation. The landlord relied on the decisions in Day v Hosebay Ltd and Howard de Walden Estates Ltd v Lexgorge Ltd [2012] UKSC 41 concerning the effect of similar provisions in the Leasehold Reform Act 1967, which enable long leaseholders to buy the freeholds of premises that can reasonably described as a “house”. The Supreme Court held that it was not reasonable to describe buildings that were being used as offices and as a “self-catering hotel” as a “house”.  However, the language in the 1993 Act is slightly different. The legislation does not stipulate that it must be reasonable to describe premises as a “flat”; but should the result be any different here? The county court judge saw no reason to imply such a stipulation into the 1993 Act and was far from confident that the policy that underpins the statutes was necessarily identical.  The tenants tried to persuade the judge that the words “use for the purposes of a dwelling” embraced use for day-to-day habitation without any degree of permanence.  The landlord acknowledged that non-residents, and even investors or speculators, may now be able to take advantage of rights conferred by the legislation, but argued that their investment or speculation must still be in properties that are “residences” or “homes” in themselves.  The judge weighed the evidence carefully. He rejected the suggestion that the premises must be occupied as “some kind of a home”, let alone that they should constitute a “main or only residence”, because this would exclude second homes and “pied a terres” and require the investigation of the tenant’s intentions.  However, the lettings history showed that most of the occupiers stayed for less than a month. The premises provided a place to stay and were similar to rooms and flats provided by hotels and aparthotels. In addition, the booking system and general pattern of occupancy were more like those of a hotel. Consequently, although it was a finely balanced decision, it was impossible to say that the premises had been adapted for use as “dwellings”. As a result, the flats fell outside the scope of the Leasehold Reform, Housing and Urban Development Act 1993. Allyson Colby is a property law consultant