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Flat Dwellers Entitled to Prefer Owner/Occupier Neighbours

In emphasising that it is reasonable for flat dwellers to prefer that their neighbours be owner/occupiers, rather than short-term tenants, the Upper Tribunal has refused to amend a provision in a lease which restricted the use of residential premises to the long leaseholder and his family.

OfficesThe flat, which was held under a 90-year lease and formed part of a small residential block, contained no restrictions on assignment or sub-letting but included a covenant whereby the leaseholder agreed ‘to use the flat as a private dwelling for the lessee and his family and for no other purpose’.

When applying under the Leasehold Reform, Housing and Urban Development Act 1993 for an extension to his lease, the leaseholder had sought deletion of the words ‘for the lessee and his family’. The landlord would not agree to the amendment and the leaseholder’s arguments on that issue were subsequently rejected by the Leasehold Valuation Tribunal.

In dismissing the leaseholder’s appeal, the Upper Tribunal found that the covenant should be interpreted in accordance with its natural and ordinary meaning. In the context of a residential building, comprising flats let on standard terms which were intended to be enforceable by the leaseholders against each other, an intention to restrict use to leaseholders and their families was neither improbable nor surprising.

The tribunal noted that it was only to be expected that owner/occupiers might prefer their neighbours to themselves be owner/occupiers, rather than tenants with a more limited interest. In the circumstances, a covenant which sought to restrict use to the leaseholder for the time being and his family was reasonable and, on the evidence, had been ‘included deliberately’ in the lease.