Rights to Light, a challenge for Developers and Funders
One of the aspects of property due diligence that I love is the continual opportunity to grow my knowledge on aspects of law and construction. Every development is unique and brings its own peculiarities but, a bit like buses, I do then see phases where a previously infrequent issue crops up on multiple cases at once. One such example is on ROL (Rights to Light) and following requests from a number of colleagues, I have agreed to focus the spotlight here for this blog.
Normally, we would start at the beginning but as that started with ‘the word’, let’s just skip forward the light bit…
What is ROL?
A right to light is an easement; in other words, it is an acquired benefit to the enjoyment of the light that passes over another’s land and enters via an aperture into a building. It is not an automatic entitlement and rarely documented in the deed (personally, I have only seen this twice – where someone has sold off a portion of their land and clarified ROL on titles at Land Registry).
How is ROL acquired?
Unless clearly stated in the deed, any ROL would need to be proven. However, ROL may be acquired by anyone who has had uninterrupted access and use of light to and for any dwelling house, workshop, or other building for a period of 20 years, openly and without threat, with no interruption for more than a year. The complication arises that if the aperture has moved at some time, if there have been historic agreements to receive light across the neighbouring land, if there has been an unchallenged interruption of more than a year to the light etc it is difficult to know whether there is still a case for ROL or as a Developer, whether or not you would infringe upon ROL.
I have planning permission – so this doesn’t affect me
A common misunderstanding that I see is the assumption that because someone has planning permission, a neighbour cannot make a claim to ROL. Unfortunately, this is not the case! Whilst planners consider questions of daylight and sunlight when assessing a planning proposal, ROL is a point of law and not planning. Therefore, pressing on with a development, even with approved planning, can leave you open to a dispute, claim and potential injunction from the court. Furthermore, it is worth noting that even where buildings have been completed, the court can require alterations to the building to remedy the offending parts and award damages to the offended parties. This is potentially a lengthy and costly process.
Can I insure against the risk?
Indemnity insurance is often our friend when it comes to issues of defective titles and easements. However, due to the complexity of ROL it is not recommended that insurance be viewed as a cure-all to the issue. One reason for this is that traditional indemnity policies often require that there be no disclosure of the problem, otherwise it invalidates the policy. However, in ROL cases, the courts will take into consideration the efforts to liaise with potentially affected neighbours and an injunction might be more likely in instances where there has been no contact at all. Appropriate insurance policies do exist, but they are not an ‘off the shelf’ product and can be very costly. For example, I know of one development where the cost of ROL insurance was circa 1% of the GDV. In that instance, expert third party opinions of the policy were also required from an independent insurance expert and quantity surveyor before all parties got comfortable.
What does this mean for a Developer?
ROL should be considered by any Developer that will build in the vicinity of existing buildings. Given the current trend to go up and the regeneration of brownfield sites, this is the case for most sites I see. Due to the complexity of the issue, a survey by an ROL specialist is always recommended and organisations such as https://www.rics.org/ can help you find someone appropriately qualified in your area. It is always better to address the issue at the start and factor it into the costs of your development and the programme for construction: funders will always welcome pro-active Developers that present proposals addressing such issues. The courts are also likely to look more favourably on Developers that have taken the appropriate steps to avoid going to court in the first instance.
Blog written by our very own Credit Operations Manager, Alexandra Phillips BA (Hons), PgDip, ACMI
November 2019
