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Are rights of light for sale?

The right to light can be acquired surprisingly easily. Magdalene Haywood explains to property developers how to avoid being held to ransom.

Rights of light have been hitting the property news headlines following a run of cases where injunctions have been granted rather than damages.

Previously, developers could confidently expect to 'buy' rights to light in return for a compensation payment. That was before Marcus Heaney took on Highcross and, in September 2010, obtained an injunction requiring the demolition of part of their development at Toronto Square in central Leeds.

During the court hearing, Marcus Heaney and his advisors insisted that his only interest in exerting his right of light was the preservation of the amenity of his property, the former head office of the Yorkshire Penny Bank; a grade II Victorian building which he had renovated at a cost of £3 million.

The demolition works ordered by the judge were assessed at up to £2.5 million and so, inevitably, Highcross appealed the decision.

The case has occupied many column inches in the property press over the past year and has caused near panic amongst many property professionals. So are the days of 'buying off'' rights of light over?

Whilst the right to receive natural light through a specific aperture into a room dates back to the 12th Century its full impact has only recently become apparent in the context of 21st Century development. The right can be acquired by way of an express agreement between the owners of adjacent land but more often it is acquired by reason of an aperture enjoying the right for 20 years without interruption. Infringement occurs when a room is left with insufficient light for 'ordinary purposes'.

This right, which can be acquired surprisingly easily, can be used to ransom a development.

With this in mind potential rights of light issues must be identified at the earliest possible stage in the development process. The starting point is to inspect the title to the development land and surrounding titles for evidence of any express rights. Next, a site inspection will identify any neighbouring apertures that have the potential to benefit from a long usage right.

Based on the information provided by these inspections, the development scheme should be designed 'around' any potential rights to avoid interference. Rights of light surveyors can model proposed developments against existing buildings to test for infringement.

But, what must developers do when the design of a development is unable to accommodate identified rights?

The answer is to face the problem head on and negotiate with potential claimants. In the current judicial climate the expectation must be that courts will award an injunction for all but trivial infringements. So negotiations must be approached with a sense of realism. Rights of light surveyors can provide advice on levels of compensation based on 'book value' principles but these figures will often be viewed as derisory to claimants who aspire to compensation commensurate with their ability to ransom the development.

Levels of compensation agreed in principle should be factored into the development appraisal to check that the scheme is still commercially viable. Importantly, and given the potential costs of demolition, no building works should start until all potential claims have been resolved and settlement agreements concluded.

Given Mr Heaney's insistence on preserving the amenity of his property, news that the case had settled prior to the appeal being heard was greeted with much surprise earlier last year.

Despite all his protestations to the contrary, it seems that there was indeed a sum at which Mr Heaney's right could be purchased. So rights of light are still for sale but afterHeaney the price has gone up - substantially.

This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.

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