On 4 December 2014 the Law Commission published its final report setting out its recommendations to reform the law concerning rights to light.
In basics terms a right of light is a type of easement, enabling someone to enjoy the light that passes over another person's land and enters through defined apertures in a building. The owner of the land over which the light passes cannot substantially interfere with it by, for example, building on their land so as to obstruct the light. Should a dispute arise, this can result in delay, new planning consents being required, compensation being paid, redesign of the building scheme and even demolition. The case of HXRUK II (CHC) Ltd v Heaney 2010 is a case in point where an injunction was granted requiring two floors to be cut back even though they had been finished and let and despite the claimant failing to take steps to prevent the development during its construction.
The law governing how rights to light are acquired and enforced has developed in a haphazard manner over the years. More recently this has led to decisions that seemed to put those who hold rights to light in an unfairly powerful position when it came to extracting large sums of money from developers, appearing to have driven up the price at which settlements were being agreed. The report has sought to shed some light (excuse the pun!) on whether the law can be clarified and whether the remedies available to the courts (namely injunctions and damages) are reasonable, sufficient and proportionate. The Commission aimed to strike a balance between the competing interests of developers and beneficiaries of rights to light and find solutions to discourage landowners from using delay/inaction to extract higher premiums from developers in exchange for their rights.
To give the report some context, under current law:
- rights to light can be created by several methods including the prescriptive methods of 1) common law prescription, 2) the doctrine of lost modern grant and 3) the Prescription Act 1832. Among these methods it is possible for tenants (not just property owners) to gain rights to light and it can be very hard for developers to determine who may have rights to light
- rights to light can be extinguished by (amongst other things) physical impediment, abandonment, the service and registration of a light obstruction notice under the Rights of Light Act 1959 and agreement between the parties
- it is very difficult to prove a right to light has been abandoned as it requires evidence that the owner of the land enjoying the right had a fixed intention never to assert the right or attempt to give it to someone else. Lack of use for a long time is insufficient
- there is no way of modifying a right to light other than by negotiation between the parties
- the calculation of equitable damages (in lieu of an injunction) is uncertain
The report's key recommendations are:
- replacing the three prescriptive methods of acquiring rights to light with just one statutory method based on enjoyment of the right for 20 years. Rights would also be as between freehold owners only
- introducing a new statutory notice procedure which allows landowners to ask neighbours to tell them within a set timeframe whether they intend to seek an injunction, failing which they will not be able to claim one although they can still claim damages
- a new system for landowners to stop the prescriptive acquisition of rights to light over their land by registering a certificate of light interruption as a local land charge. Only freeholders, tenants with more than seven years left to run on their leases and mortgagees in possession would be entitled to use the new process
- that if a right to light has not been used for 5 years then this would be evidence of an intention to abandon the right
- that the Upper Tribunal (Lands Chamber) should be able to modify or discharge rights to light (much the same as it can for restrictive covenants that can often impede developments)
- a new statutory test to determine when courts may order damages rather than granting an injunction to either (i) halt development or (ii) order demolition if this would be disproportionate in all the circumstances
Unfortunately, the Commission has deferred any reform in relation to the calculation of equitable damages at this stage.
The Commission anticipates an interim response from the government by this summer and a final response by the end of this year. Hopefully this will result in this archaic area of law being transformed into a clearer, more certain system than that currently in place.