Housing Secretary, Sajid Javid, recently announced that the government will support new planning policy to make it easier to build upwards by extending existing blocks of flats, houses, shops and offices in urban locations. These changes are to be included in the revised draft National Planning Policy Framework which is due for consultation in early 2018. Click here for further details of the Government’s recent statement.
Two additional storeys to be permitted
The government propose to allow the construction of up to 2 additional storeys on top of existing structure, provided that doing so is in keeping with the roofline and character of other buildings in the area.
The intention is to encourage developers to be more innovative and to “look up” when considering urban development opportunities as part of the Government’s much publicised drive to deliver more housing.
Upward urban development is not a new phenomenon and many developers have already embraced the vertical development potential. That said, upwards development will often not be appropriate for a range of reasons including planning & practical considerations, cost and physical restraints such as the integrity of the existing structure.
There are also a number of legal factors which should be considered when considering upward only development not suit every developer including the following:
- Terms of existing leases
The terms of existing leases of the building may conflict with the proposed redevelopment. The Landlord’s quiet enjoyment clauses which are likely to be included within any existing leases of the building may be breached by the Landlord’s proposed development if the construction works materially interfere with the tenant's possession and enjoyment of their property. Rights may also already exist for the existing tenants to use the roof space or roof voids or items situated on or within them such as roof gardens, plant and equipment etc.
Well drafted leases should reserve sufficient rights for the Landlord to undertake further development on parts of the property not already demised but this is unlikely to be sufficient to overcome claims for breaches of quiet enjoyment for existing residential tenants, particularly on the upper floors, where the interference caused by the construction is significant.
- Telecommunications masts
The existence of telecommunications masts on the roof will need to be addressed and their removal or relocation negotiated. Telecommunication tenants may well have the benefit of security of tenure pursuant to the Landlord & Tenant Act 1954 which may cause complications or result in compensation being due to the tenant if a renewal is contested on development grounds. Telecoms operators will also have rights under Telecommunications legislation.
- Rights of light
Upward urban development is more likely to infringe the rights of light enjoyed by adjoining properties. A developer will need to assess the potential impact of rights of light and could face a lengthy and costly legal battle or have to incur the cost of settling potential claims.
Indemnity insurance may be available to cover the risk of rights of light claims depending on the circumstances.
A thorough rights of light assessment should be undertaken.
- Health & Safety requirements
The developer will need to ensure that the upward development is undertaken in accordance with health and safety requirements so as not to risk the health & safety of existing occupiers. The necessary arrangements could have significant practical implications for the way in which the proposed development is undertaken.
- Residential tenants’ right of first refusal
Where a building comprises existing residential units which have been sold on long leases, the long leaseholders are likely to have the benefit of a statutory right of first refusal (pursuant to provisions of Landlord and Tenant Act 1987) if the freeholder/landlord intends to dispose of the roof and air space above to a developer.
This process will, at best, cause delays and expense to the freeholder/landlord and at worst will prevent the freeholder/landlord exploiting the development potential.
The 1987 Act contains criminal sanctions if the procedure giving the tenants right of first refusal is not complied with and/or allows the Court to unwind any transaction entered into in breach of the Act.
- Collective enfranchisement
The Leasehold Reform, Housing and Urban Development Act 1993 gives long leasehold tenants the right of collective enfranchisement. If the qualifying criteria set out in the Act are met the tenants may have a right to acquire the building, along with the roof which will hinder or prevent further development by the current owner.
- Party walls
The provisions and procedures of the Party Wall Act 1996 should be considered. The Act applies to both horizontal as well as vertical party structures (such as floors or ceilings) between adjoining flats or between flats and the roof/roof void.
The Government’s appetite for vertical urban development may present new urban development opportunities and make it easier to obtain planning permission for upward development but consideration should be given at an early stage to potential legal obstacles in order to accurately assess the viability of roof top developments.