The worth of natural light
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Andrew D. Thompson MRICS, FRGS is a chartered environmental surveyor and a partner in Wilks Head & Eve, a firm specialising in rights of light and environmental issues associated with natural light encountered in the development process. He is a member of the RICS Boundary and Party Wall Group, which is responsible for rights of light matters and was the winner of the IRRV Innovations in Valuations Award in 2004, for his paper ‘The development value of light’.
Abstract Ransom in a negotiation traditionally has been accepted in rights of light, however, the recent ruling in Mid-Town v City of London Real Property Company [2005] EWHC33 (CH) challenges both this style of negotiation and the legal basis that has allowed parties to benefit financially from another development’s aspirations. The developer awaits the inquiry into costs in this case and the issue of debate now is how will the court calculate the worth of a rights of light injury? The public attention that has been generated, due to this case, has brought light valuation methods into the open from what historically has been a closed area of professional practice frequented by only a few. This new focus on light has led some to ask if this method of valuation could hold the key to a new source of local government taxation based on the level of development profit.
Keywords: rights of light, valuation, environmental pollution, easements, local government taxation
INTRODUCTION
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It is now over 100 years since the landmark right of light case of Colls v Home and Colonial Stores Company Limited [1904] AC179. Recent events in the High Court, however, have shown that modern-day judges are just as prepared to look afresh at the ancient right of light, and bring this easement into a current-day perspective. Ransom or blackmail traditionally are not considered dirty words in rights of light circles (Anstey, 1988). The aim in a commercial negotiation has been to present the threat of the risk of injunction, then negotiate from this position of strength. Therefore, the background to the events, which led to the recent case of Mid-Town v City of London Real Property Company Limited [2005] EWHC33 (CH), is not immediately of any special note. Land Securities, via one of its subsidiary companies, was seeking to develop the New Street Square site located in the City of London. The adjoining owners, a firm of solicitors, sought to hold the scheme to ransom by seeking an injunction to force the payment of, what can be assumed, considerable compensation for the release of what was believed at the time to be an injunction position. The right of light held by Mid-Town was
q PALGRAVE MACMILLAN LTD 1742–8262/06 $30.00
Journal of Building Appraisal
VOL.2 NO.1
PP 44–51
Worth of natural light
not in dispute between the parties. The trial argument turned on the point of whether an adjoining owner had an automatic right to injunctive reli
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