It is rare to see county court decisions in the legal news, but Francia Properties Ltd v Aristou [2016] PLSCS 229 will be of huge interest to practitioners. The question that the judge had to answer was whether a landlord was entitled to construct a new flat in the air space above a small block of flats, which was managed by a right to manage company formed in accordance with the Commonhold and Leasehold Reform Act 2002.
The landlord had specifically excluded the roof from the leases of the flats and Hannon v 169 Queens Gate Ltd [2000] 1 EGLR 40 is authority for the proposition that, if a landlord owns the space above or below premises demised by a lease, then it is free to develop that space as it chooses. So there was nothing to stop the landlord from constructing further accommodation at roof level – or was there?
The tenants of the top floor flat had a roof terrace that faced north-east (which meant that it did not receive the same amount of sunlight that a south or west facing terrace would do). However, the building was relatively new and, even if it were not, rights of light attach only to buildings. So the tenants could not claim that they enjoyed rights of light to the terrace – and tried instead to persuade the judge that the development was expressly or impliedly prohibited by their lease.
The landlord had reserved the right to build, rebuild or alter any buildings on the land that it owned, “other than the Building”, even though this might obstruct the light reaching any windows or other openings in the flat. The tenants claimed that this prevented the landlord from altering or developing “the Building” in which their flat was situated – but the judge decided that the clause had been inserted into the lease to ensure that the tenants did not acquire prescriptive rights to light against the landlord. The clause was protective and not prohibitory, and did not prevent the landlord from developing or altering its property.
Would the construction of the new flat amount to a breach of the landlord’s covenant for quiet enjoyment and/or derogation from grant? The answer to this question turned on whether the development would render the top floor flat unfit or substantially less fit for the purpose for which it was let. The judge decided that it would not. The terrace formed only a part of the demise and was not just a space for enjoying the sunshine. It provided a view, access to fresh air, an area for relaxation and a space for drying laundry and growing plants – and, although the roof top development would affect the amenity of the flat, it could not be said that the increased shadowing that it would cause would reduce access to sunlight below an “irreducible minimum”, thereby rendering the flat materially or substantially less fit for its purpose.
The judge also resolved the conflict between the landlord’s right to build and the rights and functions of the right to manage company in the landlord’s favour. Further analysis of this aspect of the ruling, which is a legal first, will be provided by James Driscoll in a Legal Note that will appear in the Estates Gazette shortly.
Allyson Colby is a property law consultant
