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05 February 2013

Can a commercial property qualify as a house?

The meaning of the word ‘house’ has been the subject of legal debate on many occasions. Many of the debates have had their origin in the Leasehold Reform Act 1967, which gives leaseholders the right to buy the freeholds of their properties in certain circumstances.

The Supreme Court recently ruled on whether or not two properties that were originally built as houses but subsequently used for commercial purposes (in one case as an ‘aparthotel’ and in the other as a solicitors’ office) should be classed as houses for the purpose of the Act.

Under the Act, for the leaseholder to apply for ‘enfranchisement’ (the right to buy the freehold), the property must be ‘designed or adapted for living in’.

The Court ruled that in the case of the self-catering hotel, the building could not be classed as a house because it was used for wholly commercial purposes. A place that allows short-term occupation cannot be said to be a place that is ‘lived in’.

Similarly, a building that is used for commercial purposes as offices is not a house but an office, no matter what the superficial appearance of it may be.

In both decisions, the Court put weight on the use to which the building was put at the time when the enfranchisement application was commenced.

For legal advice concerning leases of commercial premises contact associate property lawyer Jasmin Hare.

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