UK: The Sky's The Limit…

What would you do if;

  1. your property development business had obtained planning permission to construct a 62 storey tower comprising 200,714 sq.m;
  2. you had secured funding in principle to commence the development; BUT
  3. the proposed development infringed the rights to light of 61 properties – of which 53 were maintaining their fundamental right to an injunction to prevent loss of light from the development as their primary remedy;
  4. you could see a failure to meet demand for space if pre-contract orders for materials are not placed in April 2016; and
  5. your investors had threatened to exit if the threat of injunctive remedies was not removed?

Answer– You could approach the Local Planning Authority to use their statutory powers to remove the block on development. The LPA's powers come from sections 227 and 237 of the Town and Country Planning Act 1990. In essence s237 states that land can be developed if it is acquired/appropriated by a local planning authority for planning purposes notwithstanding that it involves (a) interference with an interest or right or (b) a breach of a restriction as to the user of land. This power is akin to compulsory purchase and has been described by some as a method of cleansing a site of rights that would otherwise prohibit or hinder development.

One of the significant issues with this solution is that its application would deprive 61 property owners (90 legal titles) of their legal rights to light, all of this in a year when a YouGov poll revealed that half of Londoners think the new "tall towers" proposed for the capital will have a negative impact on the skyline.

The above is the real life situation being played out at 22 Bishopsgate, London.

On 5th April 2016 the City of London Corporation resolved to use s237 to allow the development to proceed. The decision was taken in the public interest to promote the delivery of this building and bring this long-standing and long-stalled development to fruition. The City of London Corporation decided this interest trumped that of the property owners' rights to light. The deprived owners will receive statutory compensation for the loss of such rights; however, this is generally less than the owners may have received if a negotiated settlement had been reached. The City of London Corporation believes this decision is justified when balancing the following rights against the proprietary rights of the neighbouring landowners as:

  1. the development would bring an otherwise unused site back to life to "deliver a significant increase in flexible office accommodation and support the strategic objective of the City of London Corporation to promote the City as the leading international and finance business centre. It is considered desirable [by the Corporation] for the development to progress and be completed as soon as possible".
  2. the size and configuration of the development would benefit the business community and (importantly) be in line with, and deliver, some of the targets outlined in the City of London Development Framework.
  3. the Development will secure benefits to the area in terms of the appearance of the new building and improved public realm. (There will be a free viewing gallery at floor 58.)
  4. the City of London Corporation recognise that waiting for commercial negotiations to conclude with all parties will render the scheme unviable.

Conclusion – These powers have rarely been invoked by the City of London Corporation and their use is seen as a last resort given they unilaterally remove property owners' rights. It is, however, encouraging for developers that the public interest has triumphed over the property owners' rights, as development has been promoted, not stifled. Land owners can see that a precedent has now been set and the qualified Human Right that "every person is entitled to peaceful enjoyment of their possessions" was deemed less important than the public good of the development. This hearing may also promote early settlement of disputes of rights to light across the City of London as it is now apparent that the City of London Corporation is willing to use their statutory powers forcing property owners to accept less compensation than they may otherwise have agreed....Developers, if you can think BIG and justify that the benefits of the scheme outweigh the burdens and the rights deprived.....the sky might just be the limit...

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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