How JLN Advised a Central London Leaseholder on Right to Light and Why Lease Covenants Matter

We recently acted for the owner of a long leasehold flat in a Central London mansion block regarding a Right to Light dispute arising from a major neighbouring commercial development. 

This case demonstrates that securing a compensation offer from a developer is only half the battle. Ensuring the leaseholder has the legal capacity to accept it without breaching their lease is equally critical.

The Background

Our client, the long leaseholder of a residential flat in Central London, was approached by the developers of a neighbouring site. The developers were constructing a large commercial workspace, the massing of which would interfere with the light entering our client’s windows.

Prior to instructing the Jonathan Lea Network, the client had engaged a specialist Right to Light surveyor. The surveyor successfully negotiated a compensation figure with the developer in exchange for releasing the Right to Light. The client instructed us to review the formal legal documentation (the Deed of Release and Compensation Deed) to finalise the settlement.

How We Assisted

While the commercial terms had been agreed in principle by the surveyors, our role was to ensure the client had the legal standing to grant the release without placing their own property interest at risk.

Detailed Lease Analysis 

Upon reviewing the client’s lease, we identified a specific and restrictive covenant regarding “encroachments”. The lease stipulated that the tenant must not permit any encroachment or easement to be acquired against the demised premises without the Freeholder’s consent, and must give notice to the freeholder immediately upon becoming aware of such an attempt.

Specialist Legal Research 

To fully protect our client, we conducted detailed research into the intersection of leasehold covenants and easements. We specifically analysed the case of Metropolitan Housing Trust Ltd v RMC FH Co Ltd. This case law suggests that a leaseholder may not be entitled to release a Right to Light if doing so constitutes permitting an encroachment that could damage the freeholder’s reversionary interest over the property.

Strategic Advice and Risk Mitigation 

We advised the client that proceeding with the Deed of Release without the freeholder’s consent would likely constitute a breach of their lease. This could have exposed the client to legal action from their own landlord, including potential forfeiture proceedings or damages.

Liaising with the Freeholder 

To resolve this, we drafted and served a formal letter to the freeholder to notify them of the proposal and seek their consent for our client to enter into the deed.

The Outcome

The freeholder responded, asserting their own potential rights against the developer. They indicated that they would only consider granting consent if they could review the deeds, and they required an undertaking for their legal costs to be covered by our client.

We provided a cost-benefit analysis to the client. To proceed safely with the settlement, the client would likely need to:

• Fund the Freeholder’s legal costs for reviewing the matter.
• Potentially pay for a Deed of Variation or a formal Licence to Alter.
• Navigate a conflict where the freeholder wished to reserve their own rights to sue the developer.

We advised that the escalating legal and administrative costs required to secure the Freeholder’s consent would significantly erode, if not exceed, the compensation sum. Acting on our advice regarding the financial and legal risks, the client decided not to proceed with the settlement.

Why This Matters

While the settlement did not complete, our intervention was a success for the client. By identifying the restrictive lease covenants and the implications of the Metropolitan case, we prevented the client from unknowingly breaching their lease. Had they signed the developer’s deed without our specific advice, they would have faced significant legal liability from their landlord far exceeding the value of the compensation.

How We Can Help

Right to Light disputes involve a complex intersection of easement law and leasehold property law. Even when compensation is agreed upon by surveyors, the legal mechanism for releasing rights must be carefully scrutinised.

We can assist with:

• Reviewing Heads of Terms, Deeds of Release, and Compensation Deeds.
• Analysing lease covenants to ensure you have the capacity to release rights.
• Liaising with freeholders and developers’ solicitors to secure necessary consents.
• Advising on the risks of injunctive relief versus compensation.

If you are a leaseholder or freeholder affected by a neighbouring development, please contact us to ensure your interests are fully protected before you sign any agreements. Please do get in touch via wewillhelp@jonathanlea.net – we will be more than happy to help. 

Disclaimer: The case studies on this website are provided for illustrative purposes only and do not constitute legal advice. All identifying details have been removed or altered to protect client confidentiality. Outcomes described are specific to the circumstances of each case and may not be indicative of future results. You should seek independent legal advice before taking any action based on the information provided.

Photo by london.nanzhi on Unsplash