Rights of light: developers - don't be afraid of your own shadow
Rights of light: developers – don’t be afraid of your own shadow
Rights of light are one of the oldest property rights, yet they are arguably of increasing significance to property developers as our towns and cities grow upwards as well as outwards.
In this article, we provide a reminder of what rights of light are, the risks that such rights pose to residential and commercial property developers, and how those risks can be assessed, reduced and removed.
What is a right of light?
We explained what rights of light are in our earlier article, Shining a light on rights of light (25 January 2023). To recap, a right of light is a right to enjoy the natural light that passes over someone’s land that enters a neighbour’s building through defined apertures (such as windows, skylights and glass roofs).
A right of light gives the neighbour the right to receive sufficient natural light through the aperture to allow the room or space behind to be used for its ordinary purpose. Rooms used for different purposes are entitled to receive different levels of light (for example, a greenhouse requires more light than a storage room).
How are rights of light acquired?
Rights of light can be acquired by express grant (by deed); reservation (in a transfer or conveyance when someone sells part of a larger plot); statute; implied grant; or, most commonly, prescription (long use).
Why do rights of light pose a risk to developers?
Constructing a new building, or adding storeys to an existing one, could obstruct the passage of light to neighbouring properties.
If the obstruction would cause a reduction in light that would make the neighbour’s property substantially less comfortable and convenient than before, and that neighbour has a right of light, this might amount to an actionable nuisance.
If a right of light has been or is going to be infringed, the owner of the right is entitled to apply to court for an injunction. An injunction might prevent a proposed development from proceeding, or require any building already constructed to be demolished or cut-back.
The court has a discretion to award damages (compensation) instead of an injunction. Even where the developer can persuade the court to award damages instead, the amount of compensation can be substantial.
In addition to the threat of claims for injunctions or damages by the owner of the right of light, the developer may face delays, compensation claims from contractors and others as a consequence of those delays, and possibly having to apply for a new planning permission for a smaller or reconfigured development.
The risks to a developer are therefore considerable.
What can developers do?
There is no one-size-fits-all approach to dealing with rights of light. The strategy will depend on various factors including the scale of the development, what information is known about neighbouring properties, and the developer’s (and its lender’s) attitude to risk.
We consider below, however, certain initial steps that most developers will want to take, and the main options to be considered.
Establishing whether rights of light exist and identifying potential owners
Developers should seek advice at an early stage from a specialist rights of light surveyor.
The surveyor will produce a “right of light report”. This will identify those neighbouring buildings that may have a right of light, the extent of the loss of light those buildings may suffer as a result of the proposed scheme, and the options the developer might take to design buildings within a “development envelope” to eliminate or minimise the risk of a claim being brought.
The surveyor’s report can be supplemented with advice from experienced solicitors. This might be particularly useful where further detailed investigation of neighbouring property interests is required. It is worth noting that in some circumstances tenants of premises in neighbouring buildings can acquire rights of light, as well as freehold owners, so it may be necessary to review the terms of leases of nearby premises.
The results of the initial investigations will inform next steps. Potential losses caused by cutting back the scheme can be compared to the cost of potential claims, and the proposed development can be revised accordingly. A strategy can then be formed for dealing with any remaining potential claimants.
Preventing rights of light from being acquired
There are various ways in which the acquisition of a right of light can be prevented.
In many cases, rights of light will be acquired through prescription. This is often under section 3 of the Prescription Act 1832 where the person claiming the right would need to show that the light has been enjoyed without interruption, and without written consent, for at least 20 years calculated back from the date of their legal challenge.
It may be possible to prevent the acquisition of such a prescriptive right by stopping the flow of light before the requisite period of uninterrupted enjoyment has been achieved. This can either be by some physical obstacle (possibly the new development itself), or by a notional obstruction in the form of a Light Obstruction Notice under the Rights of Light Act 1959.
Obtaining a Light Obstruction Notice involves first applying to the Upper Tribunal (Lands Chamber) for a certificate, notifying neighbours as directed by the Tribunal, and registering the certificate with the local authority or the Land Registry. A temporary certificate can be sought in cases of exceptional urgency.
Rights of light can be avoided in certain other circumstances too, such as where the land that receives the light comes into the same ownership as the land over which the light passes (unity of ownership). Properties built in the City of London are subject to special rules (under the Custom of London) that may also need to be checked.
Overcoming rights of light that might already exist
Where a right of light has been acquired, it is very difficult to argue that it has been abandoned and there is no equivalent procedure for applying to discharge or modify the right as there is with a restrictive covenant.
This means that the most common ways to deal with overcoming rights of light that already exist, or that might exist, are to take out insurance against any potential infringement or negotiate a formal release with the owners of the right, and very often both.
Crucially, insurance will generally not be available if negotiations have already started with neighbouring owners. Investigating the availability of, and taking out, indemnity insurance should therefore usually come first.
Insurance companies will often require the grant of planning permission as a pre-condition to offering cover. It may be that the planning process will itself flush out potential claimants, which may affect the premium payable and the terms of the policy. It will be important to check the insurer’s requirements, including whether they may need to approve, or be kept informed, of any subsequent negotiations with neighbouring owners.
When negotiating, compensation for an interference or loss of a right of light is often based either on the reduction in the value of the right-owner’s property interest or on a share of the developer’s gain. The specialist surveyor will be able to assist with the assessment and the negotiations. Solicitors can help properly document any settlement that is reached, in a deed of release that should be registered at the Land Registry.
Depending on the circumstances, there may, however, be other options.
Although not commonly used, it may be possible for a developer to apply to the court for a declaration confirming that a proposed scheme will not substantially interfere with a neighbour’s right of light. This might be considered where, for example, negotiations have been unsuccessful, and the specialist surveyor’s evidence is compelling.
For larger schemes, consideration could be given to asking the local authority to exercise its compulsory purchase powers. For example, where the local authority has acquired land or appropriated it for planning purposes it can, under section 203 of the Housing and Planning Act 2016, authorise building work even though this might interfere with a right of light, subject to the payment of limited compensation.
It is vital that developers identify neighbours who may have acquired, or be about to acquire, rights of light in the early stages of planning a new scheme. Ignoring rights of light can have disastrous consequences, leaving greater scope for claims to be made that might at best cause significant delays and additional costs, or at worst prevent the development from proceeding or render it uneconomic to pursue.
Getting early advice from specialist surveyors and solicitors will help inform the strategy for mitigating the risk of potential claims and negotiating the release of rights from neighbouring owners.