NEW Local Gov NH PT(2)

Dealing with blocks on the development or sale of land

Nathan Holden, partner

Paul Tomkins, partner

Blocks on development

Come in different forms

• Interests in land – leases, licences etc

• Interests affecting the land – restrictive covenants/rights of way etc

• Public rights affecting the land – public rights of way/town and village green

rights


Interests in land

• What are your options?

– Contractual?

– Statutory – CPO


Interests affecting land

• What are your options?

– Contractual negotiation

– Compulsory acquisition

– Appropriation (if the Council owns the land)

– Restrictive covenants

• section 84 Law of Property Act 1925


Public rights affecting land

• Types:

– Public rights of way

– Town and Village Greens

– Community Right to Bid/Community Right to Challenge

Compulsory Purchase Powers

Which power?

• Town and Country Planning Act 1990

• Housing Act 1985

• Others?


Key issues:

• Power of last resort

• “compelling case in the public interest”

• Public benefit outweighs private harm

• Real prospect of implementing the scheme


Town and Country Planning Act 1990

• section 226 – power to acquire land compulsorily if a local authority

thinks by developing, redeveloping or improving it they will promote the

economic, social or environmental well-being of their area.

• section 227 – power to acquire land by agreement for purposes they

could have acquired it compulsorily.


Housing Act 1985

• section 17 – power to compulsorily acquire land, houses or other

properties for the provision of housing accommodation. Acquisition must

achieve a quantitative or qualitative gain.

• Policy advice contained in Circular 06/2004 “Compulsory Purchase and

the Crichel Down Rules” issued by the ODPM specifically advises that

the power may be used to acquire land for private development


Effect on rights affecting the land

• In most cases the power to acquire includes a power to override restrictive

covenants and easements etc, affecting the use of the land for the statutory

purpose for which is acquired.

• Specific provision in made in section 237 Town and Country Planning Act 1990

for these purposes.

• Section 271(1) Town and Country Planning Act 1990 applies to land acquired by

a local authority compulsorily under any legislation or appropriated for planning

purposes and provides that where a statutory undertaker has rights to:

– place, replace and maintain plant and equipment; and/or

– has equipment it is using in the land

• then a special procedure applies.

Appropriation Powers

Section 122 Local Government Act 1972

• Power to transfer land from being held pursuant to one function to another

• 2 qualifying requirements:

– no longer required for the purpose (see R v (Maries) v Merton LBC

[2014]); and

– to a purpose for which the local authority could have acquired it in

the first place – i.e. statutory function.

• NB the same requirements apply to appropriation as they do to disposals

under section 123 Local Government Act 1972 – i.e. prior advertising

requirement before appropriation e.g. held for open space purposes.


Effect of Appropriation

• Planning purpose – section 237 Town and Country Planning Act 1990

applies:

– Rights affecting the land are overridden to the extent required for the

purposes of fulfilling the planning purpose;

– in return, compensation is payable on a basis similar to compulsory

purchase compensation to the extent it applies rights over land are

affected by a CPO – i.e. The extent to which the land diminishes in value.


Effect of Appropriation

• Does appropriation override town and village green status?

– section 241 Town and Country Planning Act 1990

• BDW Trading Ltd (t/a Barratt Homes) v Spooner [2001]


Procedural issues

• What are the procedural formalities:

– like a compulsory purchase order

– no written procedure

– practice varies from local authority to local authority – general consensus

two stage process:

• no longer required (step 1 – in principle decision);

• consultation with affected parties – necessary (step 2 – confirm in

principle decision taking on-board representations made – maintains the

balance of public v private interest)!

Town and Village Green

The Law:

• Town or Village Green

– Section 15 Commons Act 2006 – possible to apply to register a new town

or village green if “a significant number of the inhabitants of any locality, or

of any neighbourhood within a locality have indulged as of right in lawful

sports and pastimes on the land for a period of at least 20 years”

• Effect of Registration

– Criminal offence to cause damage or interfere with enjoyment of right,

build or drive on land registered as a town or village green.


The Law:

• What did the Growth and Infrastructure Act 2013 do:

– TVG use having ceased – application has to be made within a year of

use ceasing.

– Introduce landowner statements –

– Prohibition on registration where trigger events have occurred


Trigger events that stop an application being made

• A draft of a local development order is first published for consultation

• A local development order

• A draft of a neighbourhood development order is first published for

consultation

• A neighbourhood development order is made

• Application for planning permission

• A development plan document which identifies the land for potential

development is published for consultation and then again when it is adopted

Community right to challenge

The Law:

• Section 81 Localism Act 2011

– Requires local authority to consider expressions of interest from a

relevant body wanting to provide a relevant service on behalf of

a local authority

• “relevant body” = voluntary or community body; charitable trust;

parish council; or employees of local authority


Draper v Lincolnshire County Council [2014]

– The facts:

• Challenge to library closures in Lincolnshire

• Council conducted a consultation exercise and invited organisations

wishing to submit expressions of interest in running library services

should complete an Expression of Interest Form

• Greenwich Leisure submitted an Expression of Interest to run

Lincolnshire’s library service which was turned down.

• The Court (HC) held that the expression of interest should have been

properly considered which included, because that is what the statutory

guidance says, making requests for further information.


Draper v Lincolnshire County Council [2014]

– The Implications:

• This is potentially a legal minefield

• The expression of interest does not need to cite the

legislation

• What happens if the service and the land upon which the

service is performed are connected – e.g. If land is used for a

statutory purpose can it dispose of it independently with

dealing with the service?

Obtaining Vacant

Possession

The all important first

question...some are more difficult

than others....

On what basis are the parties in

occupation?

1.Licences

2.Contracted out tenancies

3.Tenancies enjoying protection

under the Landlord and Tenant Act

1954

Licences

Licences are a permission which

prevent an act from being a

trespass.

The land owner continues to

have control of the land and can

revoke the licence depending on

the terms of it.

It is the substance, not the form

of the agreement that is important.

Street –v- Mountford

If the occupier is granted the right

to exclusive possession of the

property for a term and at a rent,

the arrangement is likely to give

rise to a tenancy rather than a

licence irrespective of the label put

on the document.

The key question tends to be

“does the occupier have exclusive

possession?”

Clear Channel UK

Limited –v- Manchester

City Council

The Council granted Clear Channel a

licence to use 13 different sites. The

licence contained a statement declaring it

was a licence.

Clear Channel claimed a tenancy over

the concrete bases for the hoardings.

The Court of Appeal held the agreement

created a licence and not a tenancy.

Licence or lease?

Does the agreement reserve a

right to enter for the licensor?

Does the agreement contain a

covenant by the licensor for quiet

enjoyment?

Can the licensor require the

licensee to transfer his occupation

to other accommodation?

Does the licensor retain control

of the premises?

Lease/licence disputes

Contracted out

tenancies

Prior to entering into the tenancy,

the tenant agrees to “contract out”

its statutory right to a new tenancy.

This gives the landlord certainty

that it can recover possession of

the premises on expiry of the lease.

Unless there is a break right for

the landlord, the tenant has the

right to occupy for the whole of the

contractual term.

Landlord and Tenant

Act 1954

The Act provides tenants in

occupation of business premises

with a statutory right to a new lease

on expiry of their current lease

subject to the landlord being

entitled to oppose the grant of new

leases on grounds set out within

the Act

The lease continues until such

time as it is determined under the

Act

Termination by

Landlord

Where L is opposed to the grant

of a new lease to T:

Section 25 Notice

Not less than 6 nor more than

12 months’ notice

Cannot expire before

contractual expiry date of lease

Must set out ground(s) of

opposition to new tenancy

Termination by

Landlord

Opposing New Lease

(a) Failure to repair

(b) Persistent delay in paying

rent

(c) Other substantial breaches

(d) Suitable alternative

accommodation

(e) Uneconomic sub-letting

(f) Redevelopment

(g) Own occupation

(a) Failure to Repair

Discretionary Ground

Ought the tenant be granted a

new tenancy of the premises in

view of the state of repair of the

holding?

(b) Persistent delay in

paying rent

Discretionary Ground

Court will consider payment

history

(b) Persistent delay in

paying rent

Hurstfell v Leicester Square

Property Co Ltd [1988] 2 EGLR 105

T in arrears on 11 consecutive

days

Paid promptly from s25

Hazel v Akhtar [2001] EWCA

Civ 1883

T paid rent few days in arrears

to L’s first agents

New agent appointed

(c) Other substantial

breaches or other

reason connected with

T’s use or

management of the

holding

Horne & Meredith Properties Ltd

v Cox & Billingsley [2014] - CA

(d) Suitable Alternative

Accommodation

Suitable accommodation must

be on reasonable terms

Court will consider:

Terms of current tenancy

All other relevant circumstances

Must preserve tenant’s goodwill

Nature of tenant’s business

Facilities provided by holding

(e) Uneconomic Sub-

letting

Discretionary ground

L could re-let the whole of a

building for more than if it were let

to individual tenants on a floor by

floor basis

(f) Redevelopment

L intends to carry out works of

demolition, reconstruction or substantial

works of construction which could not be

carried out without obtaining possession

Mandatory ground

Two tests for a landlord

Does L have a genuine intention;

and

Is there a realistic prospect of L

implementing its intention?

(g) Own occupation

L intends to occupy for own

business purposes or as a

residence

L’s occupation can be through a

manager/agent

5 year rule

Compensation

Grounds (e), (f) or (g)

Not payable if new tenancy

refused on other ground

Rateable value

Contracting out

Strategy

1.Identify the basis on which the

party is in occupation.

2.Check the occupancy agreement

to work out when the relevant

termination notice can be served.

3.If the occupier is a protected

tenant, decide which ground you

are going to rely on and evidence

that ground.

Rights to Light

A right to light is an easement

arising by grant or prescription and

benefits parties by allowing them to

receive light into their buildings

through particular apertures.

If a party enjoys a right to light,

this may prevent someone

interfering with that right by erecting

buildings on their own land.

Does a right exist?

Prior to commencing a

development, the developer needs

to consider whether the amount of

light received by neighbouring

buildings will be reduced.

If so, the developer should

consider the deeds to that

neighbouring property and whether

rights may have arisen by way of

prescription.

What amounts to an

interference?

It is not enough to show that the

light enjoyed will be less than it was

before.

Carr-Saunders v Dick McNeill

Associates Ltd

A dominant owner is entitled to

enough light to leave the property

adequately lit for “all ordinary

purposes for which the property

may reasonably be expected to be

used”.

How to deal with a

right to light

If a right to light exists, the developer can:

1.Revise the scheme;

2. Consider LONs;

3.Seek insurance;

4.Seek to obtain consent from the

neighbouring owner; or

5.Proceed with the scheme, but beware

the threat of a claim for an injunction

and/or damages

HKRUK II (CHC) Ltd v

Heaney

Mr Heaney enjoyed a right to

light which the developer interfered

with.

At first instance, the court applied

the Shelfer test and granted Mr

Heaney an injunction obliging the

developer to remove the part of its

development that infringed Mr

Heaney’s rights.

The matter settled before

proceeding to the Court of Appeal

Coventry v Lawrence

Damages may be a suitable alternative to an

injunction if:

1.The injury to the claimant’s legal rights is

small;

2.The claimant can be compensated in money;

3.A small payment would be adequate

compensation;

4.It would be oppressive to grant the injunction

However, the Shelfer test must not be rigidly

followed

Strategy

1.Carry out right to light survey to see

if there will be an actionable

interference with any parties’ potential

rights to light.

2.Consider deeds, Land Registry

documents and whether prescriptive

rights may have arisen.

3.Consider insurance/consents/LONs

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NEW Local Gov NH PT(2)

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