The dispute between the Crosthwaite family, the owners of a neighbouring residential cottage, and Chelsea FC highlights the risk of a developer assuming it can acquire a neighbour's right to light by offering the neighbours suitable compensation. A developer must always remember that the primary remedy for infringement of a property right, including a right to light is, an injunction.

Background

Chelsea FC successfully secured planning permission for a significant GBP 1 billion redevelopment of their Stamford Bridge stadium. However, the scale of the redevelopment threw up a number of right to light claims from neighbouring residents occupying properties around the stadium. Despite compensatory payments proving satisfactory for the majority of the residents, the Crosthwaites had not reached an agreement with Chelsea FC and wished to continue to oppose the footballing giants.

The Crosthwaites successfully obtained an injunction in May 2017, putting the brakes on Chelsea FC's redevelopment plans. The injunction prevented development and even the demolishment of the existing stadium. The courts do have a wide discretion to grant damages in lieu but in this instance, an injunction was nevertheless granted.

Section 203 of the Housing and Planning Act 2016 ("HPA 2016")

Under s. 203 HPA 2016, a local authority can carry out a development if planning permission has been granted, even if it interferes with third party property rights like rights of way, easements and rights to light. However, the land in question must be held by the local authority and it must be shown that the development is in the public interest. If these requirements are met, instead of an injunction, the right holder is only entitled to statutory compensation based on injurious affection. Such statutory compensation is commonly a lot less than the likely damages that might be agreed with a developer or that the court might award in lieu of an injunction.

Taking advantage of s. 203 HPA 2016, Chelsea FC leased the land to Hammersmith and Fulham Council ("HFC") before securing a leaseback from them. The stadium development was successfully argued to be in the public interest due to the community wide benefits it brought, such as, amongst others, increased affordable housing. Therefore, by relying upon the local authority utilising their powers provided by statute, Chelsea FC was able to proceed with the redevelopment.

However, the Crosthwaites next proceeded to challenge HFC's decision by proceedings for judicial review. Following this, it is understood that the Crosthwaites and Chelsea FC were able to agree an acceptable compromise allowing the development to proceed.

Right to light versus right to build

A right to light is a quirky form of easement but as this dispute shows, such a right cannot be underestimated. To ensure that a proposed scheme is not substantially cut back or stopped altogether, developers should be aware at an early stage of any right to light issues that may arise in relation to their proposed development.

In order to do so and prevent potentially disastrous financial consequences and lengthy delays, developers should consider commissioning a right to light report from an experienced specialist surveyor. Such a report produces calculations revealing the extent of any potential infringement upon an occupier's right to light and lawyers can assist to identify the affected occupiers. If the infringement is such that a claim could arise, developers can then create an appropriate profile for the intended development and identify a maximum envelope for development or calculate the optimum building size of the development whilst eliminating or minimising the risk of interference to any rights to light.

Of course, if the rights to light are such that infringement is inevitable, this may not always be viable. In such a situation, the developer may wish to negotiate a financial settlement with those affected prior to committing to the development. The compensation agreement would normally be formally recorded in a deed of release and often many other neighbourly matters like noise and other disturbance would also be dealt with. Whilst this can involve some costs, it avoids any uncertainty and the potential for litigation further down the line.

However, as illustrated above, compensation will not always be agreed. Whilst insurance maybe available to cover potential compensation claims or the legal costs associated with an injunction, this is often of a second best and may not allow the development to proceed.

Comment

In Chelsea FC's case, HFC were willing to intervene but this is not always a possibility where public interest is not present. Such uncertainty means developers must adopt a very cautious approach when it comes to rights to light and, as stressed, it is advisable to address any issues early on. Whilst financial settlements often do allow for developments to proceed, albeit at a cost, as the Crosthwaites have demonstrated, they are not always an acceptable solution to someone whose access to light is substantially disturbed.