Property Focus

Developers and rights of light – don’t be left in the dark!

Property developers need to consider a number of issues before buying a site and increasingly, rights of light is one aspect which can effectively put the brakes on plans for development.  Even the seeming reassurance of the grant of planning permission will not prevent an adjoining owner making a successful claim based on infringement of their rights of light.

So why are these rights so important and how do they impact on a development?

What is a right of light?

A right of light is a legal right (an easement) to receive a reasonable level of natural light to the windows in a building, but it does not extend to the garden or grounds.  There are several ways in which this right can be acquired, the most common being by prescription over a period of 20 years or by an express right in the deeds.  Once a right of light has been established it cannot be interfered with without consent and any development which infringes rights of light faces the risk of legal action resulting in either an injunction or damages.

• Damages – the court can award substantial damages which may include an element reflecting a proportion of the potential profit resulting from the development (usually calculated as one-third of the anticipated profits) to compensate for the interference with rights of light.
• Injunctions – the case of HKRUK II (CHC) Ltd v Marcus Alexander Heaney [2010] showed how drastic an injunction to restrain development can be when a judge ordered the demolition of the top two floors of an office block (in which the Bevan Brittan Leeds office now sits!) which reduced light to another building.  The court ordered demolition despite the fact that the block had been completed and one of the floors in question had been pre-let to a commercial tenant.

What checks should be carried out?

A rights of lights surveyor should undertake a technical risk assessment and once a risk has been established, a detailed investigation of the legal position should be carried out to include:

• Title investigation – there may be entries in the deeds of a neighbouring property which prevents an acquisition of a right of light. A previous owner of the site may have reserved a right of light over the surrounding area, but the enforceability of this would need to be clarified.  Deeds to neighbouring properties would need to be checked as well as to the site itself.
• Demolished buildings – in certain circumstances, a right of light can be transferred provided the windows in the new building closely match the position of the windows in the demolished one. Similarly, if windows are replaced, the right of light will not be lost as long as the old and the new windows are in a corresponding position.
• Leasehold buildings - a tenant can acquire a right of light for the benefit of its lease against its own landlord, another tenant of its landlord or a third party. Leases must be checked to see whether all rights of light have been reserved to the landlord which will prevent a tenant objecting to any reduction in light.  Otherwise, the rights of tenants as well as the landlord will need to be considered.
• Preventing rights – checking whether a Light Obstruction Notice has been served on a neighbouring property (or considering whether one can be served now). This effectively interrupts the length of time that light is enjoyed preventing a neighbour claiming 20 years enjoyment which is needed in order to claim a prescriptive right.
• Abandoned or extinguished rights – if it is claimed or appears that a historic right no longer applies, this would require detailed investigation as proving that a right to light is lost is not easy to establish unless it is documented in a deed of release. Even blocked-up windows may not be enough to claim that a right has been abandoned.

What are the options where rights of light exist?

• Insurance – specialist rights of light policies are usually negotiated and a bespoke policy issued, so it may be that such a policy exists (and provides sufficient cover of the risks) or one may be obtained.
• Redesigning the development – it may be possible to change the plans for the development so that either no infringement or a lesser infringement of the rights takes place.
• Negotiating with neighbouring owners – this has to be considered very carefully as there is the risk that insurance may not be available if possible claimants have been contacted. Once a policy has been issued contact can only take place with the prior approval of the insurers.
• Compensation – if negotiating with owners of affected properties is the best option, compensation paid for the loss of rights or potential rights must be documented, usually in a deed of release.

Practical points

Ignoring rights of light is not an option; the consequences of a successful claim being made against a developer can be catastrophic as the Heaney case showed.  Apart from the risk of an injunction which could result in the demolition of at least part of a development, there is the financial impact to consider; reducing or altering plans and/or paying out compensation will have an impact on profit, and any insurance policy is likely to be expensive.

A sensible developer should place investigating rights of light at the top of its list at the pre-planning stage, to assess the likelihood of a claim from neighbouring properties and the impact of the proposed development on those rights.  If claims for infringement of these rights are likely to affect the site, a strategy should be put in place to mitigate that risk from both the financial and legal consequences.