Right to Buy a House Even if Not Living There

by Kidd Rapinet on November 10, 2013

Did you know that a tenant may have the right to buy the freehold of a house even if they don’t live there? Because of a recent decision in the Court of Appeal, this may be the case even if the “house” is not being used as a residence.

Caroline Clark a Licensed Conveyancer at Kidd Rapinet’s London office says: “This case raises significant issues that both tenants and landlords need to take on board. One of the judges even stated the position is a good example of the law of unintended consequences”.

In the case, Day & Anor v Hosebayn Limited, the Court of Appeal confirmed that for the purposes of the Leasehold Reform Act 1967, which gives tenants of let houses the right to buy them in appropriate circumstances, a “house” need not be used as a residence in order for the right to buy to be exercised. Also, the legislation governing the right to buy does not require tenants to live in the property.

In this case, three terraced houses in London were being used for short-term accommodation by tourists when the tenant, who had a lease over all three properties, applied for the right to buy them. The 1967 Act was not created to allow commercial tenants to acquire residential property freeholds but, when the necessary circumstances are met, it does allow this, because there is no requirement that a tenant must occupy a property in order to exercise the right to buy it.

On the basis of the definition of a house, the three buildings qualified as houses and thus the tenant was able to exercise the right to buy them. In his judgment, Lord Neuberger described this as a good example of ‘the law of unintended consequences’.

If you feel you may need advice, either as a claimant or as a defendant Kidd Rapinet can advise you on the latest law in this field. Call Caroline Clark on 020 7024 8066 for further information.