Are you a landowner? Have you granted a licence to someone else to use part of your land? Have you checked recently whether the person using your land has changed or whether the way in which they are using your land has changed? Have you reinforced your claim that the rights under the licence are by your permission?

If you are a landowner and, at some time in the past, you have entered into any personal arrangement – however informal – with someone else allowing them to use part of your land in a certain way, then it is important that you check that nothing has changed. Otherwise, there is a risk that the other person or his successor will establish a permanent right, known as an easement, over your land for the benefit of his land. The easement will be registrable against the title to your land. What was once a personal understanding between two people will have been transformed into a permanent property interest in favour of the other person’s land.

This concern is demonstrated by the case of London Tara Hotel Limited v Kensington Close Hotel Limited (2010) EWHC 2749 (“Tara”) where the Court of Appeal has recently upheld the High Court’s decision that the use of a road for a period of 20 years or more without the owner’s consent established an easement. This was the case even though the right granted was by way of a personal licence without any other documentation ever being entered into.

Background to Tara

Tara concerned a dispute between two large London hotels – the London Tara Hotel (“the Tara Hotel”) and the Kensington Close Hotel (“the KCH”). The Tara Hotel and the KCH are adjacent to each other and are separated by a private service road belonging to the Tara Hotel. A licence was entered into in 1973 allowing the then owner of the KCH, its agents and business visitors (but not guests) to use the road. The licence was to carry on from one year to the next (unless determined by either party on notice) and was to be at an annual cost of £1 payable by the owner of the KCH if demanded by the owner of the Tara Hotel (in practice, the £1 was not asked for nor paid).

In 1978, the owner of the KCH ceased trading and was dissolved and, in 1980, ownership of the KCH changed. These facts were unknown to the owner of the Tara Hotel and there was nothing obvious in what was then happening at the KCH which should have put the owner of the Tara Hotel on the alert that things had changed. Ownership of the KCH was transferred several times after 1980 and the KCH was renamed and rebranded, with new signage, in 1996. Meanwhile, the use of the service road continued, much as before but included use by coaches full of guests of the KCH.

Eventually, in 2007, London Tara Hotel Limited claimed that the owner of the KCH was trespassing and sought an injunction to stop the use of the roadway, plus damages. Kensington Close Hotel Limited, as defendant, argued that it had acquired an easement by prescription, in other words a formal right of way benefitting the KCH and burdening the Tara Hotel.

The Decision in Tara

The High Court decided in favour of the KCH. The Court of Appeal has upheld the High Court’s decision. This means that the KCH now has a permanent easement, comprising a right of way, over the Tara Hotel. It does not matter who happens to own either of the hotels, now or in the future. The right of way is and will be permanent and extends to use by coaches of guests for the KCH, even though the original 1973 licence made it clear that the use of the roadway was not for the benefit of such guests.

To be successful in a claim for prescription, there must be at least 20 years’ use “as of right” which has to be use which is not by force, nor stealth nor the permission of the owner of the land which is used. It was clear that the use of the roadway was not a forcible use, nor a secret use, so much of the argument in Tara dealt with the issue of whether or not the use of the roadway was with the permission of the owner of the Tara Hotel.

Land licences are by nature personal and permissive. If the grantor’s land or the grantee’s land changes hands or if either the grantor or the grantee dies or ceases to exist, the personal permission terminates automatically. At the outset in 1973, the use of the road was by permission by the owner of the Tara Hotel. But the personal licence to use the road came to an end automatically in 1980 when ownership of the KCH changed (it may even have come to an end earlier in 1978 when the then owner of KCH ceased trading and was dissolved). When the licence came to an end, the element of permission came to an end with it. So, after 1980, the subsequent use of the roadway was not by permission. This subsequent use extended to use by coaches full of guests for the KCH. The owners of the KCH continued this use – without any permission – from 1980 onwards and established the requisite minimum period of 20 years.

The owner of the Tara Hotel argued that an implied permissive licence had arisen after the 1973 licence had ended. The judgement in Tara makes it clear that it does not matter what the parties think the status of the right might be. The High Court considered that for a licence to be implied, there must have been some positive, overt act on the part of the owner of the Tara Hotel – mere inactivity or mere tolerance of the use was not enough to establish permission. “Permission” was more than “acquiescence”.

The implications of Tara

The moral of the story is that the owner of the Tara Hotel could have taken some positive steps to protect its position. It could have checked as the end of the 20 year prescription period was approaching (say, after 18 years) that the owner of the KCH was the same person that had entered into the personal licence in 1973. If it had found out that the owner of the KCH had changed, it could have sent a letter saying that any continued use of the road was by way of licence or express permission only. It could have asked for payment of an annual sum of £1 or more (which would have evidenced an implied licence). And it could have complained earlier about the use of the roadway by coaches which was something not permitted by the 1973 licence. In other words, the owner of the Tara Hotel should have acted more vigilantly.

The Law Commission’s recommendations

Tara is not only a useful reminder that prescriptive rights can be acquired after 20 or more years of use provided that the use if “as of right” but is also a useful prompt that the law in this area is in urgent need of reform. One commentator has described the law relating to prescription as a “complicated mess”. The recent Law Commission report (“Making Land Work: Easements, Covenants and Profits a Prendre” – published June 2011) states that it has “become too complex over decades and even centuries”. The Law Commission report outlines how difficult the different sets of rules relating to prescription are. Some of these rules are based on an 1832 statute and others rely on common law (a presumed use since 1189 – “since time immemorial”) or the legal fiction known as the doctrine of “lost modern grant” (which involves the pretence that the right must have been spelled out in writing between the parties at some stage but that the document has been lost). The Law Commission has recommended that the current laws of prescription should be abolished and replaced with a new statutory scheme for the prescriptive acquisition of easements which will be simpler to understand and operate and which will help to avoid litigation.

What Should You do?

It is not yet known when the Law Commission’s recommendations will become law and what the details, as enacted, will be. Even then, it is unlikely that the new law will have retrospective effect so anything you as landowner are doing now – or, rather, are not doing now – can have a long term effect. Landowners should continue to be on the alert. They should be vigilant and act promptly to take positive action to protect their land where it is being used under the terms of a licence. So, if you are such a landowner:

  • Make enquiries to check who is using your land
  • Check that it continues to be used in the way you originally agreed
  • Make sure you continue to take positive steps to show that the continued use of your land is by your permission, whether that means asking for payment of a licence fee or writing reminders to the user to state that this is the case.
  • Interrupt the use of your land from time to time as long as you have not agreed with the user that there will be no such interruption

You need not do this all the time. But doing so at 18 year intervals from the time when the use started may prevent a real difficulty arising.