Dwelling in the past?

If you are advising residential tenants, perhaps with security of tenure under the Rent Act 1977 (‘RA 1977’) or the Housing Act 1988, then you will be able to say with confidence whether they have the protection of the various service charge provisions in the Landlord and Tenant Act 1985 (‘LTA 1985’).  But what of someone who has a tenancy of a pub or a shop with a flat above: a business tenant of mixed-use premises who has no security under the aforementioned acts but who may well (subject to the contracting out procedure) have the protection of Part II of the Landlord and Tenant Act 1954 (‘the LTA 1954)?  Do they, like their purely residential neighbours, have rights which would enable them to – for example – challenge the reasonableness of their service charges?

This was the question which faced the Court of Appeal in a judgment handed down on 21 January 2026: Cloisters Business Centre Management Company Limited v. Anvari & Anor [2026] EWCA Civ 17.  Lewison L.J. led the charge and Baker and Elisabeth Laing L.JJ. agreed with him: the answer, which may surprise many, is that they do.

The specific answer to the question depended on whether such premises would be held as falling within the definition of ‘dwelling’ in s. 38 LTA 1985.  S. 38 LTA 1985 (‘minor definitions’) defined ‘dwelling’ as

‘a building or part of a building occupied or intended to be occupied as a separate dwelling …’

S.18 LTA 1985 defined service charge (for the following provisions of LTA 1985 as

‘an amount payable by a tenant of a dwelling as part of or in addition to rent.’

Is a tenant of premises comprising, say, a pub with a flat above, a tenant of a dwelling?

Lewison L.J.’s approach to the question followed a number of routes.

One of those routes involved the genesis and development of service charge protection.  In the Housing Finance Act 1972 a tenant of a ‘flat’ was entitled to request information about service charges.  The definition of ‘flat’ in that act was ‘a separate set of premises … constructed or adapted for use for the purpose of a dwelling’.  The right to seek information was supplemented by the right for the tenant of a ‘flat’ to curtail service charges to reasonable levels by s. 124 of the Housing Act 1974, which had a similar definition of ‘flat.  Lewison L.J. explained that those rights were consolidated in the LTA 1985 which also contained a similar definition of a ‘flat’.  Lewison L.J. pointed out that the service charge protection under those three acts was for tenancies which satisfied a dual test: they had to be (1) of separate sets of premises and (2) let “wholly or mainly” for living.

However, that duality was changed by the Landlord and Tenant Act 1987 (‘LTA 1987’).  S. 41 LTA 1987 extended the aforesaid protections to ‘dwellings other than flats’ and, importantly, inserted the word ‘dwelling’ into s. 18 LTA 1985 in place of the word ‘flat’, thereby giving the present wording of the section (set out above), to be construed in accordance with s. 38 LTA 1985 (also set out above).  In his judgment, the effect of that amendment was to remove the use requirement and to leave only the physical requirement: it was no longer a requirement that the tenancy was ‘wholly or mainly’ for living.  All that remained was a requirement for a letting of a dwelling.

Having observed that the meaning of the word ‘dwelling’ had no fixed meaning and that the purpose of service charge protection was to protect the tenant ‘in his pocket’ (unlike security of tenure provisions which were to protect the tenant ‘in his home’) Lewison LJ went on to refer (adding his own emphasis) to the words of Bovill C.J. in Thompson v. Ward (1871) LR 6CP 327 which had been approved by Lord Millett (in Uratemp Ventures Ltd v. Collins [2001] UKHL 43):

‘The following may also be mentioned as familiar instances of parts of houses being considered houses, viz chambers in the Albany, chambers in the Inns of Court, rooms in the colleges at the universities, shops in the Burlington Acrade, flats in Victoria Street, apartments in Hampton Court Palace.’

He also cited a holding in JLK Ltd v. Ezekwe [2017] UKUT 277 that there was no requirement imported by the word “dwelling” that it had to be someone’s home.

Lewison L.J. referred to the reliance which the appellant landlord (who had been unsuccessful before the District Judge and the Circuit Judge) in the County Court at Central London attempted to place on the Court of Appeal’s decision in Tan v. Sitkowski [2007] EWCA Civ 30; holding that it did not assist its argument.  In Tan the Court of Appeal had held that the letting of commercial premises with accommodation above in 1976, with protection under Part II of the LTA 1954 did not become a protected tenancy under RA 1977 when the business use ended because it had not been ‘let as a separate dwelling’ within the meaning of s. 1 RA 1977.

In Tan the court had been considering the security of tenure of mixed use premises under s. 1 of the Rent Act 1977 which provided that ‘a tenancy under which a dwelling house … is let as a separate dwelling is a protected tenancy for the purposes of this Act’.

Lewison L.J. explained that the reason for the decision in Tan was a change in the provisions in providing residential security of tenure in 1965.  The law under the Rent Restriction Acts (1915, 1920, and 1939) was changed by s. 3(3) of the 1965 Act which expressly provided that the 1965 Act would not apply when the LTA 1954 did.  That is to say, it was only from 1965 that a mixed use letting would fail to obtain security of tenure (at least for residential purposes).  Prior to 1965 that exception did not exist.  Consequently, prior to 1965 a mixed-use tenancy would have been ‘let as a separate dwelling’.  This was entirely consistent with pre-1965 cases such as Epsom Grand Stand Association Ltd v. Clarke (1919) 35 TLR 525 which held that mixed uses did not prevent a letting from being of ‘a separate dwelling’ the effect of which had been codified by statute in s. 12(2)(ii) of the Increase of Rent and Mortgage Interest (Restrictions) Act 1920 thus:

‘The application of this Act to any house … shall not be excluded by reason only that part of the premises is used as a shop or an office of for business, trade, or professional purposes.’

The net effect being that, absent express provision (such as that in the 1920 act), mixed use premises would indeed constitute a ‘dwelling’.

Lewison L.J. held that the same reasoning applied to the LTA 1985.  He rejected a submission for the landlord that where parliament wished to bring mixed use premises within the definition of ‘dwelling’ it did so expressly (as had been the case in 1920).  He held that, in fact, the opposite was the case: mixed-use premises would be within the definition of ‘dwelling’ unless the contrary was made clear.  In doing so, he relied on the following:

The provisions of ss. 1 to 3A of the LTA 1985 requiring information to be provided to ‘the tenant of a dwelling’ and of s. 17 LTA 1985 giving to ‘a tenant of a dwelling’ the remedy of specific performance of the repairing obligations in ss. 11 LTA 1985 (which by virtue of s. 13 LTA 1985 are implied into ‘a lease of a dwelling-house’) are expressly disapplied by s. 32(1) LTA 1985 in relation to tenancies to which Part II of the Landlord and Tenant Act 1954 applies.  He observed that if the landlord’s argument that mixed use premises automatically fell outside the definition of ‘dwelling’ (or dwelling-house’), then there would have been no need for the draftsperson to have included s. 32(1) LTA 1985.

The covenant that a dwelling is fit for human habitation provided by s. 9A LTA 1985 applies, by virtue of s. 9B LTA 1985 to leases where a dwelling is ‘let wholly or mainly for human habitation’.

This was all to be contrasted with s. 38 which contained no ‘user’ requirement.  Not only that, but Lewison L.J. considered that the doctrine in Vickery v. Martin [1944] KB 679 applied such that the fact that the letting was mainly for business and only to a minor degree for living would make no difference.

Consequently, a tenant of a mixed-use property is entitled to the service charge provisions of the LTA 1985 even if the residential use is limited in extent.

However, the effect goes still further.  The particular property in issue in this case was part of an old convent which had been divided up into units and was known as ‘Cloisters Business Centre’.  While the permitted user of the unit in question was for ‘offices (and ancillary residential use)’ it was currently used only for storage purposes.  That is to say, that there was no current residential use.  Lewison L.J., in holding that ‘there is nothing in the factual context which would undermine the conclusion I have reached’ seems to be implying that a complete lack of residential use would make no difference.

Owners of reversions of mixed-use premises will have to bear in mind that the Court of Appeal has confirmed that their tenants have the benefits of the service charge provisions in LTA 1985.  This may come as an unpleasant surprise to many of them.

Article by John Clargo