By Fenella Maddan, Legal Adviser
November 2012
The recent Supreme Court decision of (Day and another v Hosebay Ltd and Howard de Walden Estates Ltd v Lexgorge Ltd) focused on the definition of a house under the Leasehold Reform Act 1967. The properties concerned were originally built as houses but subsequently used as offices and a self-catering hotel.
It was held that the original purpose and outward appearance of the buildings was not sufficient to make them houses for the purposes of the 1967 Act. Both properties were used entirely for commercial purposes and this use meant they could not be houses reasonably so called. It seems clear now that properties solely in commercial use will not be able to obtain their freeholds or extend their leases under the 1967 Act.
However, this leaves the question of mixed use properties open. It is clear from past cases that some proportion of mixed use is acceptable, but the exact proportion is not clear. It would seem that 11% residential use is not enough but 25% is. In the case of Tandon v Trustees of Spurgeons Homes [1982] A.C. 755 the property consisted of a shop with a flat above. The shop made up either 50% or 75% of the building depending on whether a covered courtyard and two storey stable used by the shop were counted. This property was held to be in “substantial” residential use.
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