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26 April 2019

Are my rights to use leisure facilities enforceable?

Question

I am considering purchasing the freehold of a luxury four-bedroom house set in the grounds of a beautiful country estate. I understand that the property comes with the benefit of: (i) a right to use the extensive leisure facilities including an Olympic-sized swimming pool and riding stables; and (ii) the right to use an adventure theme park within the estate. To what extent are these rights enforceable?

Answer

An easement is a right benefiting a piece of land (known as the dominant land) enjoyed over land owned by someone else (known as the servient land). If a right amounts to an easement, it is capable of being enforced by whoever owns the freehold interest.

The right to use leisure facilities may be an easement provided it relates to the actual or intended use of the dominant land (in this case residential use) and if at least some meaningful use may be made of the facilities by the owner of the dominant land without: (i) the dominant owner taking possession or control of the servient land; or (ii) active and continuous management and operation of the facilities by the servient owner.

It is highly unlikely that the right to use rides at an adventure theme park could be an easement. It would rely on the active and continuous management and operation by the owner of the servient land and it does not obviously have anything to do with the normal use of the property as a home.

Explanation

The Supreme Court in Regency Villas Title Ltd v Diamond Resorts (Europe) Ltd [2018] UKSC 57; [2019] EGLR 1 recently considered whether recreational and sporting rights can take effect as easements. The Supreme Court decided that rights benefiting timeshare properties to use sporting and leisure facilities were capable of existing as easements.

The following criteria must be satisfied for a right to be an easement: (i) there must be dominant land and servient land; (ii) the easement must be linked to and benefit the dominant land in some way, not just a personal advantage to the owner; (iii) the dominant and servient owners must be different people; and (iv) the right must be capable of being granted as an easement. In this case, the first and third criteria were met, but the Supreme Court handed down useful guidance as to how to approach the remaining two.

First, the right must not only be linked to the dominant land, it must also be connected to or have something to do with the normal use of the property. It is not sufficient that the right adds to the value of the dominant land if it has nothing to do with the actual or contemplated use of that property, eg as a house or as a factory.
As timeshare properties normally encompass recreation and holiday use, the court determined the rights did benefit the dominant land. This will be a question of fact in each case and it is possible that such facilities would not be within the “normal use” of a house.

Turning to the next condition, two key points were raised to argue the rights were not capable of being granted as easements. First, a right that either deprives the servient owner of reasonable use or lawful possession and control of its property cannot be an easement: an easement grants the right to use land, not to possess it. However, it was decided the rights to use the facilities did not amount to possession. At the date of the grant of the rights, the parties expected the servient owner to maintain the leisure facilities and so it would manage, control and maintain them. In the event the servient owner gave up managing the facilities, the dominant owners would be entitled to reasonable access for maintenance, but the Supreme Court accepted that the facilities could be maintained by the dominant owners without taking possession or control of the land.

Secondly, an easement cannot generally require more than mere passivity on the part of the servient owner. In other words, an easement does not oblige the servient owner to manage, repair and maintain the servient land. Therefore, if the servient owner failed to maintain or provide the facilities the dominant owner would have to rely on their rights to step in to do the work in a reasonable manner to facilitate their use of the rights. The majority in the Supreme Court were heavily influenced by what they considered to be findings of fact by the Court of Appeal that some such use could be made of the leisure facilities even if the owners failed to maintain them. It is worth noting the comments in the dissenting judgment that no evidence appears to have been provided for such findings and, in particular, no consideration given as to the practicalities of such use.

While this decision is significant as it demonstrates that the categories of easements are not closed, it also clearly illustrates how every case will turn on its own facts. The Supreme Court criticised the legal structure used in this case as the servient owner was required to allow the dominant owners to use the facilities free of charge with no obligation to pay for the costs of maintenance. Parties should not enter into such an arrangement without checking who is obliged to maintain the facilities and who is to contribute financially towards the rights. Further, with a freehold property, any positive covenants by the servient owner are not enforceable against successors in title. Therefore, if the servient owner ceased to maintain the relevant facilities the dominant owner would not be able to force them to do so.


Lauren Fraser is a senior associate at Charles Russell Speechlys LLP and Katie Helmore is a barrister at Landmark Chambers.

Questions on any topic can be e-mailed to egq&a@crsblaw.com and egq&a@landmarkchambers.co.uk.

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