In an important ruling for landlords and tenants, the court of appeal has decided that a shop with a flat above it could not reasonably be described as ‘a house’ within the meaning of the enfranchisement provisions of the Leasehold Reform Act 1967. The decision scotched the flat dwellers’ hopes of acquiring the building’s freehold.
The property had a greetings card shop on its ground floor and its first floor had been converted for residential use by the long leaseholders without the landlord’s consent. Notwithstanding that breach of covenant, the tenants had sought enfranchisement soon after the unauthorised works were completed.
Dismissing the tenants’ appeal against a first instance decision to like effect, the court ruled that, in circumstances where the conversion of the flat had been carried out in breach of the landlord’s rights, the building could not be brought within the definition of ‘a house’ under section 2(1) of the act.
The court noted that there was a direct and close connection between the unlawful alterations to the building’s first floor and the statutory right which the tenants sought to enforce. Had the works not been carried out in breach of covenant, there could have been no argument that the act had any application to the case.
The court concluded: “No case has been made out for holding that benefit of the enfranchisement provisions of the 1967 act is available to a long leaseholder in such circumstances. As a matter of statutory construction it cannot have been intended by Parliament to give the lessee the right to enfranchise by making, in breach of covenant, the very adaptation of the building for living in that is necessary for him to exercise the right. The tenants seek to enforce a right acquired by committing a wrong. In general, the law should not and does not allow that”.