Rights of light - the hidden costs of being un-neighbourly
Organisations will routinely become aware of developments adjacent to their premises, which might at first glance raise a few eyebrows, but not much more. However, it might be worth tasking someone with assessing the impact of the development on your property to prevent, what can be, a permanent interruption of your property rights.
Property rights are a valuable asset and can be protected from infringement to preserve the value of your property. Rights of light are one such property right and, often, such rights are regarded as complicated and relegated to the ‘too hard pile’. However, developers hope for exactly that response and often put up very significant buildings in close proximity to others, in full compliance with planning permission, but with little regard to potential infringements of an adjoining owners’ rights of light.
Understand what other building may be affected when developing your own property
Conversely, if you are contemplating developments on your own property, one of the early considerations should be to understand what other buildings are likely to be affected so that you can take early steps to mitigate what could turn out to be extremely costly claims from neighbours.
Put simply, rights of light are easements of natural light passing over someone else’s land for the benefit of windows/doors (apertures) in a building. These easements can arise from use of the light for 20 years.
A recent rights of light case
In a rights of light case, Beaumont Business Centres Ltd v Florala Properties Ltd (March 2020) which is getting widespread attention, we’ve been reminded by the High Court, that the primary remedy for an infringement of a property right is an injunction. The fact that the building is already completed, or mid-build, has not prevented courts from granting an injunction. In most of the relevant decisions in this area, the parties’ conduct with each other has been one of the important factors in considering whether or not to grant the injunction.
The Court was persuaded that there was evidence that by virtue of the reduction in light, Beaumont’s premises had been made “substantially less comfortable and convenient than before”. In practice that means it had to show a likely loss of rental income. Here, it was estimated that Beaumont (which was a high end luxury serviced office provider in London) would have a loss of rent of c.2.5%. While it was difficult to quantify the reduction due specifically to the loss of light, the court accepted that it was sufficient to establish that the reduction in light had caused a “substantial interference” with Beaumont’s rights of light such as to amount to a nuisance. Consequently, the High Court was prepared to grant in injunction to be cut back to avoid the nuisance.
It was then is for the developer to demonstrate to the court why an injunction should not be awarded and that, using its discretion, the court should award damages in lieu of an injunction. The distinction between common law damages, designed to compensate the injured party for any reduction in value, and damages in lieu of an injunction is significant. In this case, if Beaumont was not entitled to an injunction in the first place, common law damages would have been £240,000. However, where the court was persuaded to grant an injunction, as an alternative to an injunction, Beaumont was entitled to damages in lieu of an injunction, which were based on the profit to the developer in being allowed to retain the building as developed without having to cut it back. In this case, those negotiated damages were assessed at £350,000.
Communication is key
This case is widely being considered to be a warning to all parties to engage reasonably with each other before and during any proceedings. The decision to award an injunction was, to a large degree, influenced by the fact that the developer on this occasion went ahead with the development, knowing of the potential concerns raised by Beaumont and the risk that it was taking. It had acted in a high-handed, or at least unfair, and un-neighbourly manner.
The lesson to take away must be for affected parties to make their concerns known at a very early stage, and to avoid any suggestion that they’re simply in it for the money! All developers should take a cautious approach and to maintain neighbourly conduct at all times to hopefully avoid an injunction to remove part of all of its building, even after construction has started (or worse) has completed.
While this case does not represent new law, it does serve as a timely reminder that these matters are far from routine and, if mishandled, can be very costly indeed for the wrongdoer both in terms of time and outcome.
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