Time given for negotiations before compulsory acquisition of rights to light
Having failed to negotiate the settlement of a rights to light dispute with the owner of neighbouring 1 Finsbury Circus, the developer of 120 Moorgate sought help from the City Corporation. The Planning Officer's report recommended the use of statutory powers to facilitate the development but the Planning and Transportation Committee appeared reluctant to approve their use. This article looks at the issues and asks the all-important question of where this leaves developers.
Planning permission was granted in 2011 for the proposed development of 120 Moorgate into almost 200,000 square feet of office and retail space. The scheme has been on hold since then due to a dispute with the owner of 1 Finsbury Circus over the likely loss of light to their building. During the five years since planning permission was granted, negotiations between the developer and the neighbouring owners have been very slow. In order to try and move the discussions forward the developer obtained permission in December 2015 for a revised 'cut-back' scheme reducing the loss of light. A report put before the City's Planning and Transportation Committee concluded that, notwithstanding all of the developer's efforts, a negotiated settlement was unlikely. Therefore, the recommendation was for the Committee to exercise its powers under Section 227 of the Town and Country Planning Act 1990 to acquire the development site for planning purposes and effectively allow them to override the neighbouring owner's rights under Section 237 of that Act.
Acquisition for planning purposes
Given the serious consequences of the operation of these powers, local authorities are reluctant to use them other than as a last resort. The last documented case where the City was asked to engage these powers was the Goldman Sachs headquarters. In that case two neighbouring owners had refused compensation payments of £1.3 million each and so Goldmans asked the City to step in and assist. As with 120 Moorgate, when the recommendation first came before the Committee it was postponed to allow time for further negotiation. The Goldman Sachs development amounts to almost one million square feet of office space to house one of the City's largest employers. It is easier to see the wider public benefit in that case, which is an important factor in the exercise of these powers.
Where now for 120 Moorgate?
The owners of 1 Finsbury Circus sent a last minute email to the City shortly before the meeting at which the recommendation was to be considered indicating they were prepared to negotiate. Whether this was a cynical ploy to buy further time remains to be seen. For now consideration has been postponed to the next meeting in March and it will be very interesting to see what happens should a settlement not be achieved by then.
Where does this leave developers?
The uncertainty surrounding the resolution of rights to light disputes remains a major factor on the developer's risk register. There is a real need for more certainty which could come in one of three possible ways:
- new laws enacted by Parliament;
- a decision of the higher courts;
- increased assistance from local authorities through the use of their statutory powers.
The Law Commission produced recommendations for change in December 2014 but there is no sign of those being advanced any time soon. The City's approach to 120 Moorgate shows that local authorities remain nervous about stepping in to assist. There is, however, a glimmer of hope from the courts in the shape of a case due before the Court of Appeal in July this year which may provide further guidance.
Q&A: Am I insured for COVID-19?
Laura Bushaway writes for Estates Gazette on a recent claim under the “disease clause” of business interruption policy.
Snail farms and other slow moving business (rates mitigation schemes)
New permitted development right to convert unused commercial premises into homes to come into force
Looking beyond the benefitted land: confirmation that an objector’s wider property may be considered in applications to discharge/modify restrictive covenants
Read our recent case study on applicants who were prevented from developing a new house due to a restrictive covenant covering their land.
Further extension of coronavirus restrictions affecting residential properties: Where are we now?
The extension will be implemented from and including 31 March 2021 by the Coronavirus Act 2020.
Case Study: One Blackfriars Limited
An informative and positive judgment for administrators selling high-value property in distressed and complex scenarios.
Temporary restrictions on winding-up petitions extended until 30 June 2021
As the restrictions are extended, read what it means for you here.
Commercial rent arrears: what are the latest restrictions on landlords’ remedies this quarter day?
What you need to know for this Quarter Day.
To Promote or not to Promote, that is the Option: Top 10 Tips with Promotion Agreements
Providing you with the top ten tips with promotion agreements - what should you know?
Q&A: Do the Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 apply to agricultural tenancies?
Reviewing whether the Electrical Safety Regulations apply to agricultural tenancies in the private rented sector.
Q&A: Parking privileges
James Souter and David Nicholls address a resident’s parking dilemma.
Property Patter: Business as usual? The impact of COVID-19 on commercial lease negotiations
What impact has COVID-19 had on commercial lease negotiations and will we see the effects last?
Off Quay? Town and Village Green case of interest for developers
No cliff edge for tenants - but what's on the horizon for commercial landlords?
David Haines quoted by CoStar and Estates Gazette on the extension of the rent moratorium
The extension of the moratorium again “delivers another blow to commercial landlords”, with rent arrears already totaling around £4.5bn.
Property Patter: The Spring 2021 Budget – what news for property?
Join us as we review some of the measures introduced by Rishi Sunak to provide a boost to COVID-hit businesses and workers.
David Haines quoted by Estates Gazette on the end to the rent moratorium
The rent moratorium has effectively stopped landlords from evicting occupiers unable to pay rent since the start of the pandemic.
Property Professionals: Spring Budget Announcement
Join us as we discuss the highlights of the recent budget announcement.
Q&A: Terminating a contract – matters of materiality
Megan Davies and Nicholas Grant address a homebuyer’s query over a shrinking master bedroom.
Charles Russell Speechlys advises shareholders of Douglas & Gordon Estate Agents on its sale to Foxtons
Established in 1958, Douglas & Gordon is a London-based, family owned independent estate agent.