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News on the Block is a trading name of Premier Property Media Ltd.
© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
For those of us that have pondered if a self-catering hotel or an office could also be a house, we have been in good company. In the widely reported conjoined case of Day v Hosebay and Howard de Walden Estates Ltd v Lexgorge (2012), the Supreme Court concluded that commercially used buildings will not qualify as houses for the purposes of an enfranchisement claim under the Leasehold Reform Act 1967. The 1967 Act gives the tenant of a house held under a long lease the right to compulsorily acquire the freehold of the house from his landlord, provided he has owned the lease for two years, the building qualifies and subject to certain other conditions.
What amounts to “a house” (in statutory terms) appears a beguilingly simple question. However, the 1967 Act adopts a far more flexible definition that a house can include “...any building designed or adapted for living in and reasonably so called”. Identifying the limits of this definition did not cause too much trouble until 2002, when the government abolished the requirement to reside in the property before making a claim for the freehold. This was to address a perceived unfairness on second home owners and company tenants precluded from enfranchisement rights but susceptible to losing their homes at the end of the lease term. This change enabled companies like Hosebay and Lexgorge to make enfranchisement claims.
In both Hosebay and Lexgorge, the buildings were subject to claims under the 1967 Act. Hosebay concerned three buildings in South Kensington each constructed as separate houses but later converted into serviced apartments providing short term accommodation. Lexgorge related to a building in Marylebone originally built as a house but used for commercial purposes from 1961.
The question for the Supreme Court was whether or not these buildings were “houses” under the 1967 Act. In Hosebay, the freeholder asserted the buildings failed both these tests while in Lexgorge, Howard de Walden considered its office use meant it was not reasonable to call the building a house.
Importantly, in both Hosebay and Lexgorge the buildings were originally constructed as houses. They retained the external appearance of a house and in the case of Lexgorge two internal floors remained unchanged from their original design as residential accommodation. However, at the time the claims for the freehold were made, all buildings were in 100% commercial use. With compelling logic, the landlords argued such use meant the buildings could not possibly be “houses” within the 1967 Act.
The Supreme Court agreed and judgement was handed down on 10 October 2012 unanimously allowing both appeals. Buildings used entirely for commercial purposes, regardless of their original design or current appearance, were not houses reasonably so called. But, quite how matters stand for mixed use buildings remains a topic for further exploration!
Anna Favre is a Partner at Pemberton Greenish LLP