A developer may have to cut back a development to restore rights of light

Rights to light often pose problems for developers. Beaumont Business Centres Ltd v Florala Properties Ltd [2020] EWHC 550 (Ch); [2020] PLSCS 45 concerned an office building in London. The freeholder, Beaumont, had granted an associated company a 15-year lease before selling the freehold to a third party. Contemporaneously with the sale, all three parties executed a rights of light deed (the RoL deed) addressing what was to happen if a neighbouring landowner were to increase the height of its own building by up to 11.25 metres. In those circumstances, Beaumont was to receive any rights of light payment made by the adjoining landowner, Florala, during the next 15 years. Florala sought and obtained planning permission to develop its property and was on the brink of making an offer to extinguish the rights of light when it discovered the existence of the RoL deed. Its contents convinced Florala that Beaumont and its tenant were trying to extract a ransom payment, as opposed to seeking to preserve their rights of light. So it went ahead with its project without making any concessions, despite Beaumont’s warning that it did so at its own risk, and was served with proceedings for an injunction. Florala argued that the loss of light caused by its development was relatively small. It claimed that a reduction in rental/capital value of just 1% or 2% was insufficient to constitute a nuisance. And it suggested that a reduction in light that makes a badly-lit room darker is not actionable. The High Court disagreed. The judge ruled that a claimant does not need to show that the owner of the servient tenement has acted unreasonably, or establish a loss in value of any particular percentage, so long as the interference with its right to light is permanent and its financial loss is more than trifling. Furthermore, an interference with light that makes premises substantially less comfortable and convenient than they were before is just as much of a nuisance as it would have been had the premises been better lit. After considering the valuation evidence, the judge concluded that the interference with the rights of light would reduce the annual income from the dominant tenement by £20,000. This did constitute a nuisance. Furthermore, it is not up to a claimant to enlarge its windows; it is entitled to retain its rights of light without having to make alterations. Should an injunction be denied because the existence and contents of the RoL deed indicated a willingness to release the rights of light in return for money? The judge accepted that Beaumont was seeking to preserve rights of light to a building that was used to provide high-class serviced offices, where the nature of the accommodation is very important. And there was no evidence that the cost of cutting back the development by one or two rooms would make it oppressive to award an injunction. So the court decided that Beaumont was entitled to the injunction that it sought. However, Florala’s tenant had not yet had an opportunity to be heard. So Beaumont would have to join the tenant to the proceedings and persuade the court that it too should be bound by the injunction – failing which Florala would be liable to pay Beaumont damages instead, in the sum of £350,000.   Allyson Colby, property law consultant