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What Is A House? Landmark Court of Appeal Ruling

Shopping precinctWhat is a house? That would appear to be a simple question, but it has taxed judges for decades. However, in a decision which will assist thousands of tenants to acquire the freehold of their premises, the Court of Appeal has ruled that a shop with a flat above is, indeed, a house.

When built in the 1920s, the shop included a stairway which gave direct access to the flat above. However, works were carried out in the 1970s by which the stairs were moved outside and internal access to the flat severed. The premises were subject to a 99-year lease but had been sublet to a company which wished to purchase the freehold or extend its lease.

The company’s enfranchisement application fell on fallow ground after a judge ruled that the premises did not qualify as a house within the meaning of Section 2(1) of the Leasehold Reform Act 1967. However, in allowing the company’s appeal, the Court ruled that the judge had erred in law.

The Court found that the removal of the internal stairway did not have the effect of taking the premises outside the statutory definition of a house. Although the shop space was thereby increased and the means of access to the flat changed, the layout and use of the premises had remained essentially the same.

Taking a broad interpretation of the statutory definition, the Court emphasised that claims to enfranchise buildings comprising shops with accommodation above should not be rejected on the basis that they would ordinarily be thought of as shops, rather than houses, or because the accommodation is not linked internally to the rest of the building.

Noting that an office block with a caretaker’s flat would still not meet the definition of a house, the Court was confident that judges would be adept at dismissing unmeritorious enfranchisement claims. However, in the light of its ruling, the Court noted that there would be no warrant in future to distinguish between similar types of building solely on the basis of their external appearance or internal layout.