Rights of light - tips for developers

It is a fact of modern life that open space is at a premium and development on greenfield sites is rare. Development takes place in a closely built environment, impacting on existing buildings and thus the rights of light enjoyed by neighbouring buildings have become an increasingly important – and restrictive – factor in development. Rights of light can require the re-design or cutback of a scheme, they may necessitate the payment of a large compensation sum or even stop a development altogether. It is essential, therefore, that any issues relating to light are dealt with at the earliest possible stage.

What is a right to light?

A right of light is an easement and is the right to receive sufficient natural light through defined apertures (for instance windows, skylights and glazed doors) to allow the use of the building for the ordinary purpose for which it is or could reasonably be put. A right of light may be created by express grant, reservation or may be implied by law. Most frequently, a right of light is acquired by long user or prescription. Under common law this arises if it can be shown that the building has enjoyed the continuous access of light since "time immemorial" which is deemed to be the year 1189. Under the doctrine of lost modern grant it is acquired by proving enjoyment through any 20 year period. Most frequently, under Section 3 of the Prescription Act 1832 it is acquired by showing 20 years continuous enjoyment counting back from the time when the action challenging the right is commenced.

When is the right of light infringed?

In very general terms, the beneficiary of a right of light is entitled to a level of light which, according to ordinary notions, is sufficient for the comfortable use and enjoyment of the building. If it falls below this level, it amounts to an actionable interference, a common law nuisance. In assessing the severity of the infringement, one looks not at the amount of light removed by the development but the amount of light that is left. If the reduction is sufficiently great, the affected owner (which includes not just the freeholder owner of the building but may also extend to tenants if the benefits of rights of light are not excluded from their leases) may seek an injunction either to prevent the development, require it to be cutback or, if it has already been built, to demolish the offending part. Alternatively, it may be awarded damages to compensate for the loss.

In deciding the appropriate remedy in rights of light cases, the courts adopt the Shelfer principles, the general test titled after the case of the same name. These can be summarised as follows:

• if the injury to the neighbour's rights is small
• if it is one capable of being estimated in money
• if it can be adequately compensated by a small money payment, and
• if it would be oppressive to the developer to grant an injunction

then damages may be awarded instead of an injunction.

Can they stop the development?

Each case depends on its particular circumstances and the courts have a wide discretion. Additional guiding factors specific to rights of light disputes can be extracted from case law. The starting point remains the extent of the reduction of light to the affected premises. Conventionally, the "50/50 rule" has been applied by which an owner cannot complain if at least half of a room remains adequately lit – this is known as "the grumble point". The measurement of loss of light is extremely technical in nature and expert guidance from a rights of light consultant is essential. Nowadays, calculation of the loss is undertaken with the aid of advanced computer software by reference to both existing and post-development building profiles.

Technical calculation is not a rigid rule of law, but a starting point which may be disregarded in appropriate circumstances. In addition to the technical evidence, therefore, the courts consider the personal effect on existing occupiers and the social utility of the offending development. The impact of the development will be approached differently when considering residential premises as opposed to commercial premises. Not surprisingly, more sympathy lies with the claim of a residential occupier that the loss of light is not compensatible. The courts also look at the conduct of the parties. An injunction is an equitable remedy so how the parties behave is an essential element. Did the affected party seek to protect its rights early enough, did it seek an interim injunction or did it sit back? Did the developer deliberately ignore neighbour's protests and did it speed up its development programme in spite of them?

Damages instead

Unlike common law damages which are designed to compensate for actual loss, the courts have a great degree of discretion in assessing the quantum of equitable damages which are awarded in lieu of an injunction. If damages are awarded, the court calculates the level of compensation by what it considers a reasonable price to be paid for allowing the developer to buy off a right which would otherwise prevent the development, the impact of the loss of light and general amenity, the loss of sky visibility and sunlight and the general deterioration in the quality of the environment. That said, the courts have made it clear that the calculation of equitable damages is incapable of "strict rational and logical exposition", making precise quantification a difficult exercise.

From the case law, it is possible to extract two main methods of calculation, either:

• applying a multiplier of 2.5 to 3 to the actual diminution in value to the affected property which is calculated based on the loss of equivalent front zone or EFZ light, or
• as a percentage of the developer's profits that are made possible by virtue of the infringement. The share is usually 5-15%, but anything up to 33% is a possibility. This is assessed by reference to the amount which the beneficiary of the right could reasonably expect to receive, discounting any ransom value, but accepting that the developer would be prepared to give up some profit in order to "buy off" the right. Particularly in large commercial developments, six or seven figure sums are easily achieved.

Tips for developers

• The most important tip is that you should be aware of the neighbour's rights from the outset. You should obtain specialist rights of light advice from your surveyor and your lawyer early on in the project and plan to resolve any issues as soon as possible. The longer you wait, the greater the beneficiaries' ransom position. Potential claims must be factored into the development appraisal – even if an injunction can be avoided, you need to take into account potential cutback exercises or damages payments which may be substantial. If a number of parties are affected by a development (which is not uncommon) the quantum of damages – even where injunctions are avoided – can be a fundamental factor in assessing the viability of a development. At best, delay adds expense such as holding costs, financing costs and construction costs.
• It is important to consider strategy early on for eliminating or minimising the risk of a claim. The best way of resolving a claim is to agree a release in exchange for a sum of money. A different strategy may be required for residential as opposed to commercial occupiers. It is not unreasonable to assume that for a commercial occupier a financial payment is adequate compensation, however, the same rules do not necessarily apply to someone's home.
• If agreement cannot be reached and if an injunction remains a risk, remember that the courts look at the conduct of both parties when considering whether to exercise their discretion. With this in mind, but depending on the circumstances, it may be appropriate to commence negotiations early on. Communication is the key and keeping affected parties informed is not only best practice as part of any construction programme it will benefit you if an injunction is sought. If an open approach is adopted, it is essential that a compensation offer is made early on (and again this should be encouraged) and it should be put on an open basis. If the beneficiary expresses an interest, even if it does not accept the offer, this is best evidence that the infringement can be adequately compensated by money instead of granting an injunction.
• If time is sufficient, consideration should also be given to the use of the Light Obstruction Notice procedure. Once upon a time, people erected screens in order to prevent their neighbours acquiring rights of light. Under the Rights of Light Act 1959, a Light Obstruction Notice may now be registered as a local land charge against neighbouring properties. This acts as a notional obstruction that is deemed to block the access of light to those properties. The affected parties have one year to object to the registration which they can do by showing that they have existing rights of light which the notional obstructions infringes. This procedure is beneficial on a number of different levels. In broad terms, it is a useful exercise to flush out potential objections to the development in plenty of time. More significantly, it can eliminate possible objectors if they fail to act within the requisite timeframe. If a neighbour has prescriptive rights of light by virtue of 20 years' enjoyment, but fails to object within a year, the right is deemed to be interrupted and the 20 year clock starts to run from zero again. Finally, it is a tool to prevent a building nearing 20 years of age from acquiring prescriptive rights of light. This is useful if future development is planned and is a cost effective way of eliminating future problems.

For further information please contact Caroline DeLaney at [email protected]