In Cloisters Business Centre Management Company Ltd v Anvari [2026] EWCA Civ 17, the Court of Appeal held that a self-contained unit (“the Unit”) let for use as “offices (and ancillary residential)” constituted a “dwelling” for the purposes of sections 18 to 30 of the Landlord and Tenant Act 1985, meaning that it benefited from the statutory controls in sections 18 to 30 of the Landlord and Tenant Act 1985 (LTA 1985) on service charges.
The case turned on the interpretation of “dwelling” under section 38 of the LTA 1985.
The Unit was originally a Victorian convent which was converted into units in 1987. It consisted of a suite of rooms including a kitchen and shower room. It was let on a 999 year lease, which specified the permitted use as “offices (and ancillary residential use)”. Separately, the lease obliged the tenant “not at any time to use the Demised Premises … [for residential purposes or as sleeping accommodation]”. The Unit was currently used for storage.
The County Court concluded that the Unit fell within the definition of a “dwelling” in section 38 of the LTA 1985 and referred the case back to the First-tier Tribunal (“FTT”) to determine the service charge recoverability. The landlord appealed, arguing that sections 18 to 30 of the LTA 1985 do not apply to mixed-use premises.
The Court of Appeal dismissed the appeal. Lewison LJ, giving the leading judgment, noted that sections 18 to 30 of the LTA 1985 originally applied only to flats that were “occupied wholly or mainly as a private dwelling”. However, following amendments made by the Landlord and Tenant Act 1987, the protections in sections 18 to 30 were extended to any “dwelling”, defined (in section 38) as “a building or part of a building occupied or intended to be occupied as a separate dwelling”. The definition of dwelling in section 38 contained no requirement that occupation as a dwelling should be the main or whole form of occupation.
The Court of Appeal held that if Parliament intended to exclude mixed-use premises from the definition of “dwelling”, it would have done so expressly (as it had elsewhere in the LTA 1985). It was also clear from previous case law that a mixed-use property could be a dwelling.
In this case, the lease of the Unit expressly permitted ancillary residential use. The restrictions on residential use elsewhere in the lease were subsidiary, likely intended to prevent use solely for residential purposes. The fact that the residential use had to be ancillary to the office use did not preclude the Unit from being a dwelling (Vickery v Martin [1944] KB 679 ). The leaseholders of the Unit were therefore entitled to the protections in sections 18 to 30 of the LTA 1985.
This case confirms that any degree of permitted residential use can activate the residential statutory service charge regime, even in premises that appear predominantly commercial. Landlords will need to focus on both the current use of the property and the use the lease permits and to be aware that the tenant may be able to apply to the FTT for a determination on the reasonableness of the service charge.
