12 Days of Christmas 2025 - Day 1

As the festive season is now upon us, the Real Estate Litigation elves have been busy compiling their list of the most important cases and legal developments in the real estate sector for 2025. In our “12 Days of Christmas” feature, we take you on a whistlestop tour of our shortlist to help you keep up to date.

Day 1 finds us looking back at one of the first cases to come out of the blocks in 2025, and one of only a handful of cases that help shed light on the interpretation of Part 1 of the Landlord and Tenant Act 1987 (the Act). In particular, this case provided guidance on the definition of a ‘building’ for the purpose of offering tenants first rights of refusal under Part 1 of the Act.

 

Relevant facts

The Act creates a right of first refusal for qualifying tenants in residential buildings, where the landlord intends to dispose of its reversionary interest. Where the Act applies, a landlord must first serve offer notices to qualifying tenants before making a “relevant disposal” of its interest. Section 5(3) of the Act provides that a landlord intending to dispose of an estate/interest in more than one building must sever the transaction, dealing with (and making offers to tenants in connection with) each ‘building’ separately. Unhelpfully, ‘building’ is not defined in the Act.

In this case, the landlord Defendant wished to sell the freehold of one residential development, made up of four blocks: A, B, C and E. In the line of fire was the landlord’s decision to serve two s.5 Notices: one for block A, and one for blocks B, C and E.

A key question thus arose: was the Defendant correct to differentiate between the blocks, or did the entire residential development operate as one ‘building’ for the purposes of the Act?

 

High Court decision

In reaching its decision, the High Court confirmed that a number of different competing factors should be considered when determining whether more than one structure constitutes a single ‘building’. These included:

1. Plans of structures
2. Underlying structural support
3. Lessees’ rights to use appurtenant premises
4. Connections at any level
5. The dates of construction of the structures
6. How structures are managed and serviced
7. How the service charge is operated
8. Visual impressions
9. Means of access to the structures and any appurtenant land
10. The extent to which common amenities and facilities are shared
11. The planning history of structures, and any enforcement action taken
12. The requirements of housing legislation/other applicable regulations

This list is not exhaustive, and the Judge emphasised that in each individual case, some factors may ‘exert a magnetic attraction in favour of a certain conclusion’.

The magnetic factor here? The leaseholders’ car parking rights.

The Court placed significant emphasis on the residents’ shared use of Back Beau Street, which served as the access route to car parking spaces allocated to Block A leaseholders, but physically situated between B, C and E.

The residential development was thus held to constitute one ‘building’ under the Act, and the landlord’s offer notices were consequently invalid.

 

Lessons learned

This case confirms the importance of a detailed assessment when deciding what notices need to be served for land interests comprising several structures. Crucially, parties must recognise that the definition of ‘building’ will be viewed by the Courts contextually, and a single compelling factor can ultimately dictate the outcome. If you would like to read more about this case, you can take a look at the article we wrote earlier in the year.

If you have managed to read this far, we thought we would reward you with a festive joke to get you in the Christmas spirit: Why did Santa hate small chimneys? He had terrible Claus-trophobia!