Will the new Rights of Light Professional Standard make life easier for developers and adjoining landowners?
Insight
The third edition of the RICS Rights of Light Professional Standard for England and Wales took effect on 1 June 2024, which:
- Seeks to further regulate and increase standards of work in this complicated space, and
- Introduces a new pre-action protocol and dispute resolution process for what it hopes to be a clearer process to be followed by both developers and adjoining landowners from the outset.
As developers will know, rights of light matters can have a significant impact on development proposals and timeframes. An actionable right of light can lead to or result in:
- Injunctions that delay or prevent a development,
- Compensation payouts to adjoining landowners, or
- Worst case scenario: demolition
Historically, insurance has often been seen as a solution to mitigate the implications of rights of light on a development. However, in the current insurance market, premiums and excesses for such policies are ever increasing (to the point of unviability) as a growing number of rights of light claims have filled the courts.
The new professional standard aims to reduce the instance and impact of rights of light disputes on developers and landowners by introducing mandatory requirements for RICS members to follow, alongside "best practice" recommendations. The aim is to better safeguard the interests of developers and landowners as they navigate through this highly specialised field.
Interestingly, the new professional standard casts doubt on the traditional “Waldram analysis” for assessing what is “adequately lit”. Considering this has been the standard followed for quite some time, it will be interesting to see how this method is either modified or re-evaluated going forward as the changes come into effect.
The professional standard also introduces a new protocol which has the ambitious aim of helping to resolve rights of light issues quickly and cost effectively. In brief summary:
- At the outset the developer is to write to the adjoining landowner summarising the key elements of the proposed development and lay the ground for assessments to be undertaken to assess any loss of light. The adjoining landowner is then expected to respond to such letter within a reasonable timeframe (of up to 21 days).
- The next step is for the parties to exchange and request the relevant information. This will mainly facilitate the organising of any required inspections and surveys. The expected timeframe for each party to respond to each other is 14 days.
- It discourages going through the courts system, instead favouring alternative dispute resolution processes such as arbitration, mediation, expert determination or valuation by an independent third party (such as a barrister, solicitor, or experienced surveyor).
The importance of engaging properly qualified and knowledgeable professional advisers throughout the rights of light process for both a landowner and a developer is emphasised by the professional standard, particularly in:
- Establishing whether a landowner has a right of light that might be infringed by the proposed development,
- Guiding a client through the pre-action protocol and the dispute resolution process,
- Considering the terms of any rights of light insurance before the steps contemplated by the protocol are followed, and
- Drafting rights of light agreements, by way of a deed of release, where a landowner has agreed to release its rights for compensation.
As this new professional standard highlights, rights of light is a specialist and complex area and disputes in this field can be difficult to navigate. Farrer & Co, with our wealth of experience and expertise on such matters, continues to guide clients through this ever-evolving area.
This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.
© Farrer & Co LLP, June 2024