Leases are often seen as a starting point – a document agreed at the outset and then filed away while the property is occupied. But are cent Court of Appeal decision has demonstrated that overlooking the wording of a lease can have far-reaching consequences, particularly when it comes to service charges.
Aiden Wiffen, Senior Associate in Thrings’ Property Litigation team takes a look at the timely reminder that the outcome of Cloisters Business Centre Management Company Ltd v Anvari provides to landlords that even well-established assumptions about how a property is used may not be enough to avoid statutory obligations.
The case in brief: Cloisters v Anvari
The dispute centred on a long lease of a unit in a business centre in London. The lease described the premises as an office, for which it was primarily used, but it also permitted ancillary residential use.
The landlord, Cloisters Business Centre Management Company Ltd, sought to recover service charges under the lease but the tenant, Hamid Anvari, argued that the statutory service charge protections in the Landlord and Tenant Act 1985 applied, on the basis that the property was a “dwelling”.
The key issue for the Court of Appeal was whether a mixed-use property – in this case, an office with ancillary residential use –could fall within the definition of a “dwelling” for the purposes of the 1985Act. In the decision, handed down on 21 January 2026, it was confirmed it could.
Despite the commercial nature of the premises, the presenceof permitted residential use meant that the lease was capable of being a leaseof a dwelling. As a result, the statutory controls on service charges applied.
This meant that the landlord’s ability to recover service charges was restricted by the requirements of the 1985 Act, including reasonableness and consultation obligations.
Why this decision matters for landlords
For many landlords, the decision will feel counter-intuitive. A unit that looks and operates like a commercial office might not be expected to attract residential service charge protections.
However, Cloisters v Anvari reinforces an important point: it is the terms of the lease, not just how the property is used in practice, that will often determine whether statutory protections apply.
Mixed-use leases are common, particularly in town and city centres where buildings evolve over time. Allowing even limited or “ancillary” residential use can be enough to bring the lease within the scope of the Landlord and Tenant Act 1985.
For landlords, this has real implications. If a lease is treated as one of a dwelling:
Landlords who assume that a business tenant automatically falls outside the residential service charge regime may therefore be exposed to unexpected challenges.
What landlords can do to reduce risk
The decision highlights the importance of proactive lease management. Landlords can take practical steps to reduce the risk of finding themselves in a similar position.
Aiden Wiffen, Senior Associate in Thrings’ Property Litigation team, said: “This case is a practical reminder that small details in a lease can make a big difference. Landlords should look closely at what their leases actually allow, particularly in mixed-use settings, as labels such as “commercial” or “business use” are not always decisive and
“Regular lease reviews and clear drafting remain one of the most effective ways for landlords to protect their position and manage their properties with confidence. A short review now can prevent costly disputes later on.”
Thrings’ Property Litigation lawyers are experienced in reaching resolution in property disputes, acting for both landlords and tenants, often without recourse to court proceedings, and with an excellent track record when cases do go to Court. To find out more, get in contact.