Building around your tenants and neighbours

The ability to develop will depend on whether you can do so without infringing the rights of tenants and those living close to the proposed extension.

Quiet enjoyment

Nearly all leases contain an express covenant of quiet enjoyment. This means a landlord undertaking development must ensure that, in carrying out works to develop the roof, there is no interference with other tenants’ possession and enjoyment of their property. There is a balancing act between the rights reserved to the landlord to develop and the landlord’s obligation not to derogate from grant of the above covenant, where its works deprive the tenants of the benefit of their existing rights.

To mitigate matters as far as possible, a landlord proposing to develop its airspace should consider:

• giving tenants as much information as possible about the proposed works;
• designing scaffolding and making delivery and unloading arrangements that prevent access being obstructed as far as possible;
• agreeing with the tenants how to minimise disturbance from noisy works and limiting the times when these will be carried out (over and above planning controls); and
• taking steps to minimise the impact of dust and vibration during works.

Rights of entry?

It may be that rights are needed to enter into existing flats, parking spaces or communal areas to facilitate development. Or areas may need to be commandeered for storage or scaffolding. Existing leases should be checked to ensure that there are sufficient rights reserved to the landlord to make proposed development practically possible.

Sometimes a lease may allow the landlord to re-allocate an area for the tenants’ use (for example reallocating parking spaces). But where tenants have rights over the roof of the building which cannot be accommodated in the proposed scheme, the lease(s) would need to be varied to allow building up.
If any common service media needs to be moved or disturbed, this must be done without causing substantial interference to other tenants’ rights.

Avoiding a nuisance

A tenant can bring a claim in private nuisance if there is substantial interference with the use of an easement granted to them. The test will be whether the easement can be substantially and practically exercised as conveniently as before. Many leases contain clauses which permit development or reserve a right for the landlord to develop as they see fit. But such clauses are construed strictly against landlords/developers so advice should be taken at an early stage to ensure other leaseholders’ cannot prevent the proposed development.

Rights to Light

Other tenants and owners of neighbouring properties may have the right to light over the development site which could impede development.
The penalties for failing to respect rights to light can be severe – a tenant may be able to obtain an injunction to stop works or even to require demolition of all or part of the development. Damages and compensation could be significant.

A report from a specialist surveyor should be obtained if there is any doubt and agreement with any affected party may be required, although insurance is sometimes available. 

Service charges

The addition of new flats can cause difficulty in the operation of a service charge scheme. A landowner needs to ensure it can recover all of its expenditure on maintenance of a building post development.

It may be possible to recalculate the service charge proportions. Or to run a separate regime for the new flats. But the service charge provisions should dovetail with the existing flat leases and similar rights and reservations should be granted to simplify management.

Development may necessitate refurbishment or remedial works to the building. Give careful consideration as to whether such costs are recoverable through the service charge or whether they should be borne by the landlord.

Practical Matters

Building up is likely to require the use of cranes. Will the crane stand on or oversail third party land or the public highway? The development programme and plan must allow for the time and cost of agreeing necessary licences.

Does the existing building have sufficient structural strength and service capacities to accommodate the new build? Full surveys and appropriate warranties should be obtained. Modular construction techniques may minimise disruption and speed up the build process.

Party wall issues may arise with the existing tenants and neighbouring landowners. Again, professional advice should be obtained from a specialist surveyor at an early stage in the development process and any necessary documentation put in place before works begin.

This article was written by Suzi Gatward. If you require any further information on this article, please contact Suzi on +44 (0)20 7427 6619 or at suzi.gatward@crsblaw.com.