Nov 1
The claimant, as nominee purchaser of the participating tenants in a building, served a notice pursuant to section 13 of the Leasehold Reform, Housing and Urban Development Act 1993 on the first defendant, the owner of the freehold of the building, in order to make a claim to exercise the right to collective enfranchisement with respect to the building. Section 13 required, inter alia, that notice be given by a number of qualifying tenants of flats contained in the premises that was not less than one half of the total number of flats so contained and that all qualifying tenants of flats in the specified premises be named. The initial notice was given on the basis that there were 26 flats in the building. On the same day, and without prejudice to the initial notice, a second notice was given on the basis that there were 30 flats in the building. Both notices were signed by a solicitor purportedly on behalf of 17 participating tenants of flats, but the initial notice did not name the four tenants of flats on the sixth and seventh floors of the building. At the time the notices were served the sixth and seventh floors were undergoing substantial works of construction. The first defendant served counter-notices pursuant to section 21 of the 1993 Act disputing the validity of the notices and the participating tenants’ entitlement to acquire the freehold. The first defendant contended, inter alia, that the correct number of flats in the building was 30 since there were on the sixth and seventh floors of the building four new “flats”, as defined by section 101(1) of the 1993 Act, each having been “constructed or adapted for use for the purposes of a dwelling”, even if the premises had not yet been fitted out as dwellings. The second defendant, the owner of the original headlease of the building, was joined to the claim. The judge held that since the four flats on the sixth and seventh floors of the building each had a separate physical identity, were leased to different tenants under separate underleases, and were built to be occupied as dwellings, they were “flats” for the purposes of section 101(1) and the long leaseholders of those flats were qualifying tenants by section 5(1) of the 1993 Act; and since the initial notice did not name the tenants on the sixth and seventh floors, and thus did not name all of the qualifying tenants, it did not meet the requirements of section 13 of the 1993 Act and was invalid.
On the claimant’s appeal—
Held, (1) whether two areas formed a “separate set of premises” depended on the physical configuration of the premises, rather than their use or intended use. The relevant question was whether there was or was not physical separation between the various spaces. Although it was doubtful whether the judge had applied the right test, the test he applied appearing to be a mix of title, future intention and physical configuration, on the judge's findings the physical separation between the areas was enough for each area to amount to a “separate” set of premises. The fact that the separation was potentially reversible with little effort did not mean that the two areas were not in fact separate on the relevant date. Accordingly, the judge had been right to hold that each of the areas comprised in the underleases of the sixth and seventh floors were a “separate set of premises” (paras 14–19).
But (2), appeal allowed. A separate set of premises was not a “flat”, as defined by section 101(1) of the 1993 Act, unless at some stage in its history it had reached a stage of construction to be suitable for use for the purposes of a dwelling. On the judge’s findings that the physical condition of the areas on the sixth and seventh floors precluded actual use for residential purposes, the intended flats on the sixth and seventh floors had not reached that stage. Accordingly, they were not flats. It followed that at the relevant date the building contained 26 flats rather than 30. The initial notice having been validly authorised by 13 qualifying tenants or more, it had been validly served (paras 30, 34, 36, 54, 56, 57, 58).
Edwin Johnson QC (instructed by Forsters llp) for the claimant.
Stephen Jourdan QC and Thomas Jefferies (instructed by Stephenson Harwood llp) for the second defendant.
The first defendant did not appear and was not represented.