A judge at the High Court in London ruled today that a head lessee of a building by London’s Royal Mint can’t sell the “right of light” attached to its lease.
The case was brought by Metropolitan Housing Trust Ltd, which owns the head lease of a block of 20 flats known as 1-20 Royal Mint Street, in Wapping, E1.
The block is opposite a development site. The developers have obtained planning permission to build a mixed development of 354 apartments and a 236-room hotel. Buildings on the site will be as tall at 15 storeys.
Metropolitan wants to “release to the owners” of the proposed new development “rights of light acquired by the leasehold interest in” 1-20 Royal Mint Street. Or give up their right of light in exchange for money from the developers.
Metropolitan says there is nothing in the leasehold agreement that stops them from doing this. However, the freeholder, British Virgin Islands property company RMC FH Co, disagree.
RMC bought the Royal Mint site, opposite Tower Bridge and the Tower of London, for £75m in 2015. One-bedroom flats in the area are on offer for £750,000, according to Rightmove.
RMC says the lease does, in fact, bar Metropolitan from selling away its right to light because to do so would “encroach” on the rights of the owners of the flats in the building who hold their properties via a demised under-lease.
In his ruling, Mr Justice Morgan backed RMC.
“I consider that the erection of a building on the development site resulting in an actionable interference with the right of light enjoyed by 1-20 Royal Mint Street would be an encroachment on the right of light,” he said in his ruling.
“As the ‘demised premises’… include the right of light, such interference would be a encroachment upon or against the demised premises,” he wrote. “A permission for such interference would be to permit such an encroachment.”
“In these proceedings, the head lessee has sought a declaration that it is entitled to release the right of light appurtenant to the head lease. For the reasons given earlier, I will not make that declaration,” he said, in conclusion.
Metropolitan Housing Trust Limited -v- RMC FH Co Limited
Chancery (Morgan J) 24 October 2017
