Shining a spotlight on the importance of Rights to Light insurance

With recent rights to light cases resulting in large out-of-court settlements, injunctions and lengthy halts to construction, Rights to Light insurance can help you to mitigate these costly and time-consuming risks.

So, what is Rights to Light and why is it so important?

If a property has received natural daylight for more than 20 years, its right to continue to benefit from this established level of light is protected by law. Importantly, rights to light is applied to the property itself, not to its occupants. Even if planning permission has been granted, this does not void the neighbouring properties’ rights to light.

If it can be proven that a property’s access to natural light has diminished below the acceptable allowance as a result of your development - regardless of whether the project is at its proposal stage or completed - you could find yourself in the precarious position of being faced with hefty fines and ongoing legal disputes.

In what is now considered a landmark court case within the insurance industry, HKRUK II (CHC) Ltd v Marcus Alexander Heaney [2010] saw a judge upholding an individual's rights to light against a commercial property construction by ordering an injunction against the developer's building. Mr Heaney owned a Victorian Grade II listed bank building in central Leeds.

A developer began refurbishing the building opposite Mr Heaney's in 2008, with the plan being to extend the building's fifth floor, as well as developing sixth and seventh floors. The developers and Mr Heaney began negotiations concerning rights to light before construction began, but did not reach an agreement on how to proceed. Once construction had started, Mr Heaney still did not seek an injunction preventing the construction.

In 2009, the construction was completed and the developer initiated court proceedings in an attempt to legalise Mr Heaney forfeiting his rights to light by failing to seek an injunction. In 2010, the judge sided with Mr Heaney and a mandatory injunction was granted that required the developer to demolish the sixth and seventh floors, rather than paying damages.

This was despite the fact that the refurbishment was complete and the seventh floor had already been let out to an accounting firm, and as such the repercussions for the developer could have been catastrophic. During the subsequent appeals process, the two parties settled out of court before the appeal could be heard, which meant that the building was allowed to keep the additional floors.

This case evidences a shift in expected outcomes and highlights the importance of Rights of Light insurance. With our network of specialist insurers, we can source a bespoke Rights to Light policy that is comprehensive and suited to your requirements as a developer.

With policies covering settlements, abortive costs incurred as a result of a third party claim, rebuilding costs and legal costs in addressing claims against your business, we have the knowledge to help you to mitigate these risks - to find out about how we can help you, get in touch with us today.

Source: assets.publishing.service.gov.uk