The price of daylight rockets

The price of daylight has rocketed following the outcome of a recent landmark court case, says commercial property specialist Underwoods. Developers that interfere with the Right to Light of an adjacent property owner or occupier are warned that they may be held liable to pay substantial damages.

The High Court, in the case of Tamares (Vincent Square) Limited v Fairpoint Properties (Vincent Square) Limited - has ordered that the developer must pay the owner of a neighboring office building £50,000, just below 30% of the developer’s profits, as compensation for loss of light.

Craig Mattocks, Head of Building Surveying Services at Underwoods, says: “The case centres around the re-development of Rochester Row Magistrates Court and Police Station by the defendant. The High Court found that the claimant’s right to light to two windows to a stairway leading to the basement of the adjacent building in Vincent Square, Westminster had been infringed. The court considered that, in the special circumstances of the case, it would be oppressive to grant an injunction to require the defendant to carry out the demolition works necessary to remedy the breach and that instead the claimant should be entitled to a remedy in damages only.”

The judge, taking the half way point between two expert valuations, concluded that a one third split in the profit resulting in a sum of £58,166 ought to be paid in damages but, given the insignificance of the infringement actually suffered, reduced this figure to £50,000 to give a fairer result.

The actual loss in value caused to the defendant’s building by the loss of light was, at most, only just over £3,000. However, if the amount that the claimant could have reasonably demanded in return for allowing the development to proceed unaltered would have been greater than the actual loss suffered, then the claimant can recover this sum instead.

Craig Mattocks adds: “This ruling gives clear guidelines as to how damages for infringing a right to light are to be calculated and has made it clear that such damages are not be restricted to the actual loss of amenity suffered but are to be calculated by reference to the amount of profit being made by the developer.”

“No doubt, in light of this judgment, many property owners will now appreciate that they should not simply tolerate infringements as to their rights however minor, but should hold out for substantial compensation or damages to any such proposed or actual infringement.”

This case follows that of Regan v Paul Properties in October 2006, when the Court of Appeal ordered the developer to stop work on the final floor of a five-storey mixed-use scheme in Brighton after a neighbour won an injunction because of lost daylight. The developer was also ordered to partially demolish the offending structure.