Rights of light Recent cases have brought further complications to an already contentious issue. Ian McKenna explains the implications for developers and asks whether the law should be changed
Rights of light can make parties behave unreasonably. Some developers may undertake works with little thought of others’ legal rights to maximise profits while those that have the benefit of certain rights may see proposed developments as a means of extorting money from developers, beyond any loss in the value and amenity of their property.
However, one element that might suffer, but remains undefended, is a market requirement for redevelopment and space that, if not controlled for the public good, will give rise to urban sprawl.
Market demand and limitations on development
The demand for space, particularly in some central city areas, is relentless even in these recessionary times. For instance, the RICS UK commercial market survey published on 5 May reports: “Demand for office space in Greater London rose dramatically during Q1 2011”, and Stuart Fraser, policy chairman at the City of London Corporation, underlines that “Continued provision of new office space is an essential component of the City’s relationship with global business.”
Demand equates to a potential increase in built space at the expense of the natural environment. One option might be to build up and not outwards, but tall buildings have their critics and are not always appropriate. Another option may be to limit green-field development and maximise already developed space.
However, any development – tall, concentrated or otherwise – can strain the planning system and private property rights, especially rights of light.
Limitations on development are many-faceted and may be socially, economically, environmentally or aesthetically based. They may be of a public nature, imposed by the planning system or building regulations, or to protect private rights of ownership.
In all cases, factors connected with light – be they daylight, sunlight or the easement of a right to light – are important considerations.
The effect on light within the local area and the proposed development is an important consideration for designers and planners. BS 8206-2: 2008 entitled Lighting for Buildings – Code of Practice for Daylighting and the BRE guide Site layout planning for daylight and sunlight: a guide to good practice 2002 contain guidance and recommendations in respect of design and daylight and sunlight in buildings. They also consider other light and amenity related factors, such as energy efficiency, privacy, enclosure and microclimate and many local planning authorities use them.
However, the aim of the
Potential claim
A right to light may arise from grant or the common law, but usually follows the enjoyment of light at the benefitting building for more than 20 years without interruption, pursuant to the Prescription Act 1832.
Obstruction of the light entering the benefitting building below a certain measurable level gives rise to a potential claim. The party with the benefit of that potential claim may be the owner of a legal interest in the benefitting building or an occupier. It is not always possible to ascertain who are potential claimants. Unless they make themselves known, the risk remains that a claim will be made late or even after a neighbouring and offending development has been finished.
Enforcement
The courts can protect a right to light by granting an injunction before the offending development is commenced, while it is being carried out or after it has been completed.
A claimant may also seek an interim injunction before the court has had time to fully consider the case. This will prevent the commencement or the continuation of the offending part of the development but will require the claimant to give a cross-undertaking in damages. In the event that having heard the case, the court finds against the claimant, the cross-undertaking will be enforced and will compensate the developer for the delay. In such an instance, the claimant may have costs awarded against it and have to pay damages to the developer.
All a question of risk
If the claimant does not seek an interim order, it risks the development proceeding and the court not hearing the case before it has been completed. In such an instance, it was thought that the court would rule that the claimant could (or even should) have acted earlier and refuse the injunction. However, the decision in HXRUK II (CHC) Ltd v Heaney [2010] EWHC 2245 (Ch); [2010] 44 EG 126 underlines that the courts can and will make an order to demolish the offending part of the development even if completed and let, and even though the claimant could have acted earlier. This fact was highlighted by Nigel Webb of
“Claimants’ tactics, now supported by the English courts in cases such as Heaney, in seeking last minute or even after the event claims can be akin to blackmail. The current legal framework creates further uncertainty for the developer and will result in projects being delayed or possibly stopped at a time when the
Thus, the risk remains with the developer, which is what a claimant will want. There is little pressure on the claimant to bring an early claim to the attention of the developer or the courts. Further, delay heightens the likelihood that even if the developer believes that the claimant’s case is unsupportable, it will settle the dispute by paying the claimant a substantial sum to be rid of the problem. Late alteration of plans for which consents have been obtained is expensive and can affect the viability of a development.
Can the risk be eliminated or reduced?
A developer should take professional advice on the likelihood of a claim early when developing its plans. Potential claims can be settled by negotiation or plans cut back to eliminate the risk. Insurance can also be taken. However, could or should the law be changed?
The Law Commission recently published proposals in respect of easements following its 2008 report and a subsequent consultation. Although some recommendations, if developed, might clarify certain areas, such as abandonment, the commission noted that:
“In reporting now on our recommendations at the close of this general project, we note that there is scope for a further review of the law relating to rights to light. This is an important area with significant financial implications the general work that we have done lays a foundation for future work in this specific area.”
What other options might be considered? The planning process is lengthy and public. The owner of a right to light is unlikely to be unaware of the proposed development. It could be suggested that a claimant can seek an injunction only if it has brought its claim to the developer’s attention before the grant of a full planning consent. After that date, it could seek only damages based on the loss in value to its property interest.
Does a precedent for such a proposal exist?
The courts have the power to order damages in lieu of an injunction. However, they have underlined that the circumstances in which damages will be awarded are limited (thereby following Shelfer v City of
Further, section 237 of the Town and Country Planning Act 1990 enables a local authority acquiring or appropriating land on which works are to be conducted for planning purposes to override easements. The claimant may be entitled to receive monetary compensation for any loss in value to its premises caused by the development (which is similar to the statutory compensation payable for compulsory purchase).
In some instances, local authorities have adopted this approach. However, it can be a time-consuming and expensive process. In other jurisdictions, for instance in
Such steps require careful thought, consideration and consultation. It is perhaps unlikely that the Law Commission will go so far. Unfortunately, parliament too may not appreciate the commercial reality behind claims to a right to light.
Commercial reality
Parties can agree the monetary compensation that the developer should pay to the claimant. However, claimants can be known to hold out for excessive sums, which the developer has to weigh up against the costs of cutting back its development. Stuart Fraser says:
“Heaney has weakened the position of developers significantly. The out-of-court settlement has created huge market uncertainty and left them at risk of being held to ransom by numerous claimants with injunctable claims to rights of light.”
Looking for balance
The current, and perhaps worrying, move away from diminution in value based compensation to that calculated by reference to a share in development profit gives claimants additional leverage, which can lead to disproportionate compensation settlements. This trend seems likely to continue given the decision in HXRUK as perceived risk of injunctions escalate.
A delicate balance should be achieved between protecting people’s private rights and promoting the social, economic, environmental and commercial benefits of development. Getting that balance right is not always straightforward, but with the help of a skilled consultant team and a supportive local authority, it is not, in the majority of cases, insurmountable.
Ian McKenna is a partner and head of rights to light and daylight at building surveying consultancy Malcolm Hollis LLP
