Tower Hamlets Community Housing Limited v Leaseholders of Painter House

The Upper Tribunal (UT) allowed the appeal on grounds 1 and 2.

The FTT misconstrued section 35(4)(b) by interpreting 'proportions' as only numerical, excluding descriptive proportions like 'fair proportion'. The UT held that even with descriptive proportions, the conditions of s.35(2)(f) could be met if it is obvious the proportions are unfair.

The UT dismissed the appeal on ground 4.

The UT disagreed with the appellant's argument that the commercial unit should be excluded from the consideration of whether to vary the leases, even if excluded in determining if s.35(2)(f) was met. The UT concluded that the extent of expenditure for the benefit of the commercial unit was a relevant factor.

The UT dismissed the appeal on grounds 5, 6, and 7.

Ground 5 failed because passing the gateway in s.35(2)(f) doesn't automatically require variation; Ground 6 failed because the FTT's decision on s.35(2)(e) was not irrational; Ground 7 failed because the UT considered the s.38 factors in light of its decision on grounds 1 and 2.

The UT refused to make the variation sought by the appellant.

The UT found that the proposed variation would substantially prejudice the respondents and was unreasonable because it would make the residential lessees responsible for the landlord's expenditure on the commercial unit. The UT rejected the appellant's alternative proposal as well.