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County court: restricting sunlight to a tenant's flat could be breach of leasehold covenant

Development work that restricts natural sunlight to property can in principle be a breach of a 'quiet enjoyment' covenant in a lease, even where no formal right to light exists, according to the county court.

However, there was no breach in the case in question, because the reduction in direct sunlight complained of by the occupants would not result in their flat becoming "substantially or materially less fit for the purpose for which the grant or demise was made", according to Mr Recorder Morgan, the judge in the case.

Francia Properties Ltd, which owns a block of flats in Battersea, south west London, had sought a declaration from the court that it was entitled to extend the building by constructing a new flat on its roof space. It was opposed by Optic Management Company, the building's right-to-manage (RTM) company, as well as the tenants of the current top floor flat.

The breach of covenant claim was one of three objections to the plans raised by Optic and the tenants, all of which were rejected by the judge. However, the RTM company has been given permission to appeal the decision in the Court of Appeal, as there is no previous case law on the rights of RTM companies in this type of situation.

The right for leaseholders to take over the management of their buildings was introduced under the 2002 Commonhold and Leasehold Reform Act. Where the RTM has been exercised, a RTM company takes over management functions such as services, repairs, maintenance and improvements, and the landlord is no longer entitled to carry out these functions without the agreement of the RTM company.

Property litigation expert Siobhan Cross of Pinsent Masons, the law firm behind Out-Law.com, said that issues around the interference with light enjoyed by neighbouring properties was becoming "an issue of real concern on developments in urban areas".

"Developers are familiar with the planning sunlight and daylight tests they need to satisfy for planning consent purposes," she said. "They are also aware of easements in the form of rights of light which may be impacted by a development. But the question of whether, where no such right of light exists, there may be other light-related matters which need to be considered is less well known."

"This case makes it clear that a loss of sunlight where there was no right of light was a matter that as between a landlord and tenant could constitute a breach of the landlord's covenants for quiet enjoyment or not to 'derogate from grant'. This is another risk that landlords intending to develop property in a way which would impact on their tenants' rights should be aware of - although the level of loss which would justify a claim by a tenant is likely to need to be very severe," she said.

A right to light gives the owner of a building the right to maintain a level of natural daylight, and to object to any sufficiently material obstruction of the light enjoyed by way of that right. The right can be created by express or implied grant or by 'prescription', which is a legal term used to refer to the enjoyment of light through a window without interruption for a period of 20 years.

Although there was no such right to light in this case, the lease did contain a covenant requiring the landlord to allow the tenant "quiet enjoyment of the demised premises"; in other words, the flat. However, the nature of the loss of light to the tenants from the construction of an additional floor was not "beyond that contemplated by the parties at the time of grant" and did not reduce the rights of the tenant "to below the irreducible minimum", the judge said.

On the RTM point, the judge found that the landlord's proposal to build a new flat was not something that the RTM company was "required or empowered to do" by virtue of the 2002 Act. Provided that the landlord took all reasonable steps to minimise the impact of the works on the RTM company's management functions, the RTM company's rights could therefore not trump the landlord's right to develop its own building, the judge said.

"The case does not give the landlord 'carte blanche'," said property litigation expert Nicola Buchanan of Pinsent Masons. "Instead, it takes a middle ground and confirms that a landlord can redevelop, but only if it has taken all reasonable steps to minimise the disturbance to the RTM company's management functions both during and after the works."

"Whether the landlord has satisfied this threshold will be judged on a case by case basis. As such, it is conceivable that there may be a point where a proposed development scheme is so significant that it can be said that the landlord has not taken 'all reasonable steps' - for example, as suggested in this case, by replacing a pitched roof with a flat roof if that will cost more to maintain," she said.

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