A development which infringes a neighbour’s access to light may cause a dispute. Depending on the severity of the infringement, this may lead to an award for compensation, cutting back of the development, or the issue of a court injunction to halt the development completely.
There are a number of ways in which Rights of Light can be conferred; by express or implied grant, or more often at common law by a process of long, uninterrupted enjoyment know as prescription, this being for a period in excess of 20 years.
A right to light is a civil matter which is enforceable whether or not the development has planning permission. With the increasing number of high rise developments and ‘infills’ being constructed, the risk of a claim against a developer for light obstruction in built up areas has escalated significantly.
Although the law relating to Rights of Light dates back to the 19th century, it is only in recent years that the courts have supported the remedy of injunction, as opposed to damages via compensation.
In the landmark cases of Regan vs Paul Properties (2006) and HKRUK 11 (CHC) vs Heaney (2010), the courts established that if the infringement was serious enough to meet certain tests, they would be prepared to award an injunction resulting in the demolition of the offending part of the development.
Insurance Solution
As a result of this recent trend a small, specialist insurance market has developed providing protection to developers against the cost of cut-back or abandonment as a result of mandatory injunction. This protection will extend to third party financiers making the obtaining of funds easier.
At Clear Insurance Management we have worked closely with surveyors and insurers to develop specialist knowledge of this subject. This has led to the successful provision of insurance coverage for many developers and financiers faced with this potential dilemma.
We provide expertise and assistance to all parties involved (developers, architects, solicitors) to guide them through the process, Circumstances vary with each development, and part of our role is work closely with all parties to ‘bespoke’ a policy for the specific needs of the principal, whether that be the seller, buyer or developer.
The standard cover provided by the policy includes:
Damages and compensation awarded as a result of an enforcement action
Costs of alteration or demolition necessarily incurred to comply with that action
Diminution of market value
Costs incurred prior to the action which render the development abortive
In addition, a policy can be tailored to cover other potential costs such as increased interest payments incurred by the developer following a temporary injunction.
Additional Benefits
At a time when investors are cautious about providing finance, Rights of Light Indemnity Insurance will give peace of mind that their financial interest can be protected
Such policies are transferrable to successors in title – a valuable asset to developers ‘selling on’
Cover can be provided for a) specifically identified properties or b) on a ‘blanket’ basis to cover all surrounding properties
How to proceed?
If this insurance is of interest to you and/or your principal, please contact us and we will explain the process. A professional Rights of Light report is fundamental for insurers to assess, at first stage, if insurance can be considered, and we can recommend a number of specialist surveyors in this field.
Once that is established we will work with you to obtain the additional information insurers will require to underwrite the risk and provide you with a quotation.
Note that at no point should you discuss with potentially injured parties that you are seeking insurance as this would automatically preclude insurers from providing cover for those properties
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