Cloisters Business Centre Management Company Ltd v Anvari & Anor (2026) EWCA Civ 17

A Court of Appeal decision on the application of ‘dwelling’ in section 38 Landlord and Tenant Act 1985, and so whether sections 18 to 27A, the service charge protection provisions applied.

For transparency, I acted for the (successful) respondent leaseholder, with Tom Morris of Landmark Chambers as counsel.

This was a claim by Cloisters for allegedly unpaid service charges for a unit in the business centre. This was defended on the basis of non-compliance with the service charge provisions under LTA 1985, and issues of payability and reasonableness of charges. At first instance, the District Judge held that the unit was a ‘dwelling’ for the purposes of section 38 and made an order transferring the charge issues to the First tier Tribunal. Cloisters appealed that order. The Circuit Judge dismissed the appeal, holding that the unit was a dwelling for the purposes of section 38. Cloisters appealed to the Court of Appeal.

The relevant user clause of the lease was as “Offices (and ancillary residential use)”. At the relevant time, it was being used for storage.

The Court of Appeal, in LJ Lewison’s lead judgment held that the amendment of LTA 1985 by the Landlord and Tenant Act 1987 meant that the only operative definition of dwelling was that in section 38, removing the previous section 30 “occupied wholly or mainly as a private dwelling”.

The consequence was that a property intended for mixed use could be a dwelling. The requirement that a property be ‘separate’ was a physical question, not one of use – JLK Ltd v Ezekwe (2017) UKUT 277 (LC)

but in the case of mixed-use property I would place more emphasis on the terms of the letting, which is the objective manifestation of the parties’ mutual intention, although plainly the physical configuration of the leased property will always be relevant. That has always been the approach of the court in determining whether property was “let as a dwelling” for the purposes of the Rent Acts: see Wolfe v Hogan (1949) 2 KB 194

The unit in this case was not disputed as being physically separate, with a kitchen and shower room. There was no shared living space.

The LTA 1985 expressly disapplied some of its provisions from applying to ‘business tenancies’ under Part II Landlord and Tenant Act 1954. But it did not disapply section 18.

where Parliament wished to impose a test of predominant residential use or to deny protection to business tenants, it said so expressly.

The extent of residential use was not relevant. There was no basis to read in a requirement of ‘non-substantial’ business use for a property to be a dwelling.

The terms of the lease were key to deciding whether the lease was used as or intended to be used as a dwelling. The main user clause clearly intended ‘ancillary’ residential use.

A further clause in the lease stated

Not at any time to use the Demised Premises or any part thereof or permit or suffer the same to be used (for residential purposes or as sleeping accommodation)…

But this also contained prohibitions on “any noisy noxious or offensive … manufacture.” amongst other things. The Judge below had taken this as a boilerpplate clause. The Court of Appeal agreed it was likely boilerplate in a secondary clause, but the Judge below had also found that the prohibition on residential purposes could be taken as ‘other than as ancilliary to office use’. Even if this were taken to mean ‘subordinate or subsidary’ to ofice use, as Cloisters argued, this would not prevent it being a dwelling.

Appeal dismissed and claim remitted to the County Court.

Comment

The judgment gives clarity that ‘mixed use’ or ‘live/work’ leases, or as here, leases for business purposes ‘with ancillary residential use’, do have the protections of sections 18 to 27A Landlord and Tenant Act 1985 on service charges. This remains the case whether or not they are actually used as a dwelling.