Your development is at risk if neighbours’ rights to light are not taken into account. Good conduct, prompt action and appropriate advice are key to managing exposure.
How would you feel if a judge ordered you to demolish part of your development? In 2010 the High Court ordered an injunction, instructing a developer to remove two floors of a fully constructed building. The matter was appealed and ultimately, before the Court of Appeal made judgement, settled out of court.
While the developers’ nightmare didn’t come true, the case - Heaney (HXR UK ll (CHC) Ltd v Heaney) - brought the legal issues surrounding rights to light to the fore.
And worryingly the question in many developers’ minds - “Could my project be at risk?” – remains.
WHAT IS RIGHT TO LIGHT?
A right to light is a form of easement which gives the owner of a building receiving light through an aperture, usually a window, the right to maintain a certain the level of natural illumination.
The amount of light to which an owner has a right is not necessarily all the light they currently enjoy. It entitles the owner to receive sufficient natural light to allow a room to be used for its “ordinary purpose”. As a result, the amount of light required can depend on type of property and the room itself.
It is important to consider a development’s effect on surrounding properties. If a new building limits the amount of light coming in through a window of an adjoining property and the level of light available falls below the accepted level, then the development would be considered an obstruction to a neighbours’ rights to light.
WHAT IF THE COURT FINDS AGAINST YOU?
Schemes in England and Wales can be affected hugely by rights to light issues. If rights to light are obstructed a neighbour can seek legal redress.
If a court finds against them, developers could be subject to the following penalties:
- An injunction requiring alteration or potential demolition of their project.
- Payment of compensation to the injured party.
Additionally, they will also have to deal with additional expenses and inconvenience, including:
- Legal and professional costs
- Delay expenses
- Construction costs, if the building has to be remodelled
- Costs of ‘rehoming’ tenants while rebuilding work is undertaken
- Diminished asset value
- Reputational damage
There are many variables at play and complacency can be a real danger.
200 YEARS OF UNCERTAINTY
Developers and their neighbours have been quarrelling about rights to light for nearly two centuries. During this time, the government and the courts have sought to clarify how and when those rights can arise or be extinguished.
In addition, they have long debated what should be the appropriate remedy for interference with those rights. Injunction? Damages? If damages are awarded, how should they be calculated?
“The issue of rights to light remains an uncertain and usually highly contentious area of risk for most development schemes,” according to industry publication, Real Estate Gazette.1 The Heaney case left the law in an uncertain position and made it crucial that developers and property owners obtain expert advice if they want to develop in a built-up area.
In 2015, how strictly courts should apply an injunction was addressed in the case of Coventry v Lawrence.
This went right to the core of the considerations a judge would have to make, including whether damages were more appropriate in some cases than a de facto injunction.
The case of Scott v Aimiuwu  seemed to support a shift in law away from the immediate use of an injunction. Here, the court decided that the injuries to Scott’s property were small, the use of the rooms was secondary, and ultimately it was an injury that was capable of remedy by way of damages.
However, even the judges have been cautious as to how far this flexibility should extend. In Coventry, Lord Neuberger commented that some judges would still lean towards granting an injunction.
And cases have since been heard which show the courts’ willingness to grant injunctions where a developers’ conduct is poor.
THE IMPORTANCE OF GOOD NEIGHBOURLY CONDUCT
The case of Ottercroft v Scandia Care  was a specific rights to light example. Scandia was deemed to have acted in an un-neighbourly manner by giving undertakings to Ottercroft that its building’s light would not be affected.
When Scandia infringed Ottercroft’s rights to light the judge was willing to support an injunction even though the areas affected seemed to be closer to the facts in Scott: the effects were minor and only to a commercial kitchen. The courts were keen to emphasise the importance of good neighbourly conduct.
More recently, in the world of covenants, an injunction was awarded in Humphrey v Rogers . Again, poor conduct was brought to the fore as Mr & Mrs Humphrey entered into a covenant against development without consent of the purchasers and then went on to breach it. The Humphrey’s maintained that the Rogers’ could be financially compensated and that an injunction was not appropriate. However, the courts disagreed.
While the court agreed that damages may have been appropriate, it still retained discretion to grant an injunction. The original trial judge described the Defendant’s conduct as “reprehensible” and accordingly granted the injunction. Mr and Mrs Humphrey found not only that they could not sell remaining land in development but also that the breach had to be restored.
The courts are therefore sending a clear message to developers: ensure good conduct in your dealings with neighbours. This does not necessarily mean an approach to every affected party is necessary but it does mean that those who engage on your proposals for redevelopment must be taken seriously.
A developer must ensure that they have taken appropriate advice from lawyers, rights to light surveyors and a specialist broker to ensure that a suitable risk management strategy is put in place.
HOW CAN DEVELOPERS REDUCE THEIR EXPOSURE TO RIGHT TO LIGHT LITIGATION?
In a recent JLT seminar on the subject, Ian McKenna (partner at Malcolm Hollis) highlighted the importance of specialist advice.
McKenna discussed the advantages of radiance analysis, an alternative form of mitigation that includes reflected light components. This approach creates a more realistic outcome than a direct light-only approach and can reduce the likelihood of nuisance being demonstrated. It also allows for mitigation to be ‘designed in’ to the model.
He added that if the decision is made to proceed with a development which has a potential to infringe a right of light, it may be possible to obtain insurance coverage to indemnify the developer for the costs arising from a claim.
He offered the following considerations, when seeking insurance:
- Generally, insurers will want to see the grant of planning permission although policies are often available 'pre planning'.
- Before offering coverage, insurers will also consider the rights of light report, copies of relevant title deeds, details of any planning representations made by neighbours and an assessment of the reduction in value of the development.
- Working with specialist surveyors and brokers to address the issues before they arise can save developers a great deal of time and money.
In addition, Real Estate Gazette advises that developers take care to engage a proper and effective rights to light strategy. This could include:
- Negotiation with neighbours to obtain a release of any rights to light
- Seeking assistance from the local planning authority.
Different schemes require different strategies. The key is to be vigilant, aware and flexible. And to discuss any potential issues with your advisors.
RIGHT TO LIGHT INSURANCE: TALK TO A SPECIALIST BROKER
Specialist advice is essential in this area of risk and insurance. Contact a specialist broker to advise you on all aspects of risk management, including how to mitigate exposure to rights to light claims.
For more information, call Ross Nicol on 020 7558 3450. Or email email@example.com.