The case of Day v Hosebay Limited gave welcome guidance to the approach to the question “what is a house” for the purposes of the Leasehold Reform Act 1967 (“the 1967 Act”) and the enfranchisement rights under that Act.

There is similar legislation which relates to the enfranchisement right of tenants of flats: The Leasehold Reform Housing and Urban Development Act 1993 (“the 1993 Act”). A very recent case in the County Court has been decided under this legislation and the County Court has used this opportunity to try and reconcile the test under the 1993 Act in line with the Supreme Court decision in Hosebay.

The facts of Smith and Dennis v Jafton Properties Limited [2013] relates to a property in London which was originally a warehouse and which was converted into 4 loft style apartments. The Claimants each had leases of two apartments, and at the date of their claim for enfranchisement under the 1993 Act, the apartments were sublet to a company which used them as serviced apartments.

There had already been litigation which had reached the Court of Appeal as to the Claimants’ status, the Court of Appeal ruling that the Claimants were qualifying tenants for the purposes of the 1993 Act, and so capable of bringing a claim under the Act.

The matter was remitted to the County Court to decide whether the apartments were “flats” under the 1993 Act and whether the letting was commercial or residential.

The Court considered the circumstances of the case and reached the conclusion that the apartments had not been constructed or adapted for use for the purposes of a “dwelling” and therefore were not flats for the purposes of the 1993 Act. The way in which the flats were used and occupied, the Court held, was more akin to a hotel than a flat properly so called under the 1993 Act. Whilst the apartments may have had the physical appearance of flats, the physical aspects of the property were not in themselves conclusive of their status. The Court also held on similar reasoning that the apartments were not occupied for residential purposes. The Court held that the type of occupation was not residential and was in fact similar to rooms offered and provided by a hotel. Whilst the court did not go so far as to say that occupation for the purposes of the Act needed to be as a home, in order to satisfy the provisions of the 1993 Act the occupation must amount to more than a short term stay in the property.

The test under the 1993 Act is different from that in the Leasehold Reform Act 1967, on which the Hosebay case was decided. However, the test which was applied is very much in line with that using Hosebay i.e. an analysis of the use the property is put to.

For landlords of premises which include a long let residential element, this provides clarity and makes the law analogous with that for houses following the Hosebay case. It is the actual use of the premises and the type of occupation which the Court will consider primarily when deciding whether a particular property falls within the ambit of the enfranchisement legislation.

Whilst inevitably, the question of whether a house is house for the purposes of the 1967 Act, or a flat is a flat for the purposes of the 1993 Act will come down to the facts of each individual case, this does provide some helpful guidance.