Mortimer and others v Eco Chic Limited
In this case the Court determined a novel issue as to whether holiday homes fell within the definition of a "house" for the purposes of enfranchisement under the Leasehold Reform Act 1967.
The dispute arose when the Claimants sought to acquire the freehold of four respective properties which were held on long leases. The Claimants served notices of claim on the Defendant freeholder to acquire the freeholds in accordance with section 5 of the Leasehold Reform Act 1967 (the 1967 Act). The Defendant refused to accept the validity of the notices on the grounds that the holiday homes were not "houses" within the meaning of the 1967 Act. If correct, this would mean that the 1967 Act does not apply and therefore that there would be no statutory right for the tenants of these properties to acquire the freeholds.
The Court had to consider two questions arising from section 2(1) of the 1967 Act: first, is the building one designed or adapted for living in and secondly, is it a house reasonably so called?
The first question fell to be decided by reference to the physical characteristics of the property. Although these were holiday residences, the Court concluded that the buildings had indeed been designed for living in. In relation to the second question, the Court considered that the use of the property was a decisive factor in determining whether the property was a house reasonably so called. The terms of the lease (limiting use as a holiday residence) and planning conditions limiting occupation of the property during certain annual periods were considered but the Court concluded that the holiday homes were correctly to be classed as houses reasonably so called. This was primarily because the properties were used exclusively for residential purposes and the Claimants regarded the properties as one of their homes, even if not their principal residence.
Although judgment was found in favour of the Claimants, it is important to note that significant weight was placed on the use and design of the house, meaning not all holiday homes would qualify for the statutory right to enfranchise.
For further information and advice on enfranchisement issues, please contact our enfranchisement expert, William Bethune.