Head Lessee Can be Qualifying Tenant.

In certain circumstances, the Leasehold Reform, Housing and Urban Development Act 1993 allows 'qualifying tenants' of private landlords to require the landlord to give them a new lease. Private landlords with significant property portfolios have faced a series of claims under the legislation and recently conjoined appeals were heard by the House of Lords to decide whether a lessee could be a qualifying tenant regardless of the nature or extent of the property that was let.

The first claim was made by a company, which was the head lessee of a six-storey building that was split between commercial and residential use. The second claim was made by a trust, which was the head lessee of a five-storey block, all of which was sublet for residential purposes. In both cases the head lessee also let the common parts of the building from the landlord and the underleases were not leases which themselves would have created the right to make a claim under the Act.

The Law Lords ruled that in both cases the head tenants were qualifying tenants under the Act and thus could demand a new lease from the landlord. The fact that the lease included property other than flats, or was for part of a larger block, did not exclude the tenant from being a qualifying tenant.

This decision has significant implications for landlords as it means they could well face demands for new leases from head lessees that were previously not considered to be qualifying tenants under the Act.

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