A recent Court of Appeal decision in Cloisters Business Centre Management Company Ltd v Anvari & Anor [2026] EWCA Civ 17 provides important clarification on when premises will be treated as a “dwelling” for the purposes of service charge statutory protections under the Landlord and Tenant Act 1985. The judgment will be of particular interest to managing agents and freeholders dealing with mixed-use buildings and service charge recovery.
Background to the Dispute
The case concerned Unit 6 in a mixed-use development. The lease allowed the unit to be used as offices, but it also permitted some residential use. A dispute arose over service charges, with the leaseholders arguing that the unit fell within the statutory definition of a “dwelling”, meaning the service charge provisions of the 1985 Act applied and the First-tier Tribunal had jurisdiction.
At first instance, the County Court agreed with the leaseholders. The freeholder appealed, arguing that the mixed-use nature of the premises meant it could not properly be regarded as a dwelling for statutory purposes.
The Court of Appeal’s Decision
The Court of Appeal dismissed the appeal and upheld the original decision. In doing so, it confirmed that Unit 6 was a “dwelling” within the meaning of section 38 of the 1985 Act, despite its mixed-use character.
The Court emphasised that the concept of a dwelling must be interpreted purposively, taking into account the protective aims of the legislation rather than adopting an unduly narrow or technical approach.
Key Points from the Judgement
- Mixed-use premises are not automatically excluded from being classed as a dwelling for the purposes of the Landlord and Tenant Act 1985 as there us no requirement for them to be used mainly for residential purposes.
- Where a unit is self-contained and capable of residential occupation, the existence of permitted business or office use will not necessarily prevent statutory protections from applying.
- The Court confirmed that statutory coverage matters more than how the premises are actually used.
Why This Matters for Managing Agents
For managing agents and freeholders, this decision has practical implications for service charge administration and dispute resolution, particularly in mixed-use developments.
If a unit is treated as a dwelling, statutory service charge protection applies in full. That affects among other things, the content of service charge demands, the need to include summaries of rights and obligations and the reasonableness requirements for service charges. It is further relevant in respect of conferring jurisdiction to the First-tier Tribunal to determine disputes.
This judgement also reinforces the importance of careful lease analysis. Use clauses that allow residential occupation, even on an ancillary basis, may be enough to engage statutory protections, regardless of how the unit is actually used on a day-to-day basis.
Practical Takeaways
- Managing agents should not assume that service charge statutory controls are disapplied simply because as unit has a commercial or mixed-use element.
- Lease wording should be reviewed carefully when assessing whether service charge demands must comply with the 1985 Act.
- Where there is any doubt, treating the premises as a dwelling and complying with the statutory regime may help avoid enforcement difficulties and jurisdictional challenges.
Conclusion
This decision provides helpful clarity in an area that frequently causes uncertainty for managing agents operating mixed-use buildings. A purposive approach to statutory interpretation means that residential protections can apply more widely than might be expected from the lease description alone.
