The Court of Appeal held on 21 January 2026 that mixed-use premises can be a "dwelling" under the Landlord and Tenant Act 1985, even where residential use is ancillary to business use, affecting lessees and landlords of such units.
Key facts
- Who: Lessees and landlords of mixed-use premises, part business and part residential.
- From: 21 January 2026 (judgment date)
- Source: Cloisters Business Centre Management Company Limited v Hamid Anvari & Anor [2026] EWCA Civ 17
The Court of Appeal (Civil Division) considered in [2026] EWCA Civ 17 whether the lessees of a unit in a business centre were lessees of a "dwelling", and so entitled to the benefit of statutory controls over service charges. Lord Justice Lewison, Lord Justice Baker and Lady Justice Elisabeth Laing heard the appeal on 14 January 2026. Judgment was handed down on 21 January 2026, with Lord Justice Lewison giving the reasoning.
Background
Unit 6, Priory House, Cloisters Business Centre in Battersea is on the top floor of a former Victorian convent converted into units in about 1987. It consists of a suite of rooms including a kitchen and shower room. The lease, dated 28 June 1989, runs for 999 years from 29 September 1987 and describes the property as a "self-contained unit". The lessee covenants to pay a service charge.
The lease specifies the use of the unit as "Offices (and ancillary residential use)". The unit currently appears to be used as storage.
In the county court, both a deputy district judge and His Honour Judge Hellman decided that Unit 6 was a "dwelling". As a result, the question of whether the service charge was recoverable was transferred to the First-tier Tribunal. Newey LJ gave the landlord permission to bring a second appeal, identifying the point of principle: whether section 18 of the Landlord and Tenant Act 1985 applies to "mixed-use" premises.
The question
Section 18 defines a service charge as an amount payable by a tenant of a dwelling. Section 38 defines "dwelling" as a building or part of a building occupied or intended to be occupied as a separate dwelling.
The decision and reasoning
Lord Justice Lewison concluded that mixed-use premises are capable of being a dwelling, even where the residential use is ancillary to the business use. He said this answered the point of principle identified by Newey LJ.
He noted that the 1985 Act contains several differing definitions. Some are limited to lettings wholly or mainly for residential purposes; sections 1 and 18 are not. Where Parliament wished to impose a test of predominant residential use, or to deny protection to business tenants, it said so expressly. Section 18 is not among the provisions disapplied for tenancies protected by Part II of the Landlord and Tenant Act 1954.
He relied on earlier case law, including the Epsom Grand Stand case and Vickery v Martin [1944] KB 679, in which the court rejected an argument that protection should be denied where residential use was merely ancillary to business use. He said that concluding otherwise would reinstate part (c) of the definition of "flat", which Parliament deliberately repealed.
What this means for lessees and landlords
The Court of Appeal's reasoning shows that, for the service charge provisions in section 18 of the 1985 Act, premises are not excluded from being a "dwelling" merely because the main use is business rather than residential.
Anyone with a dispute about service charges on mixed-use premises should get advice before any deadline passes.
Sources
- Cloisters Business Centre Management Company Limited v Hamid Anvari & Anor [2026] EWCA Civ 17, Court of Appeal (Civil Division), 21 January 2026: https://caselaw.nationalarchives.gov.uk/ewca/civ/2026/17