28 commercial property
The perils of ignoring property rights
A spate of recent cases have exhibited a common theme: landowners who disregard or fail to pay adequate heed to the property interests of others are increasingly likely to come unstuck, writes Mark Withers of Paris Smith
Courts have a discretion to award damages where property interests are interfered with or restrictive covenants are breached. The starting point however is that an aggrieved party will be entitled to an injunction.
The developer who constructed two additional floors to an existing office block (and so infringed a neighbour‘s rights of light) was no doubt hoping the discretion to award damages would be exercised when proceedings were commenced. In the event, it wasn‘t and an order was made requiring the removal (demolition) of the completed development.
Car parking rights aren‘t generally the most exciting of legal concepts
but their implications were put into stark relief in a case where parking spaces needed to be relocated to enable a development to proceed. The parties entitled to park objected. The Court refused to imply a right to move the spaces and weren‘t receptive to suggestions that damages would be an adequate remedy. The relocation of the parking spaces and the proposed redevelopment were therefore prevented.
A developer undertook works (a housing development) in breach of a restrictive covenant apparently in the hope that once complete, the works would have the effect of changing the nature of the locality (enabling
an application to be made to the Lands Tribunal for their discharge). A discharge of the covenants could therefore be obtained from the Lands Tribunal post completion, couldn‘t it? The Lands Tribunal wasn‘t minded to cooperate and made it clear that it was “not inclined to reward parties who deliberately flout their legal obligations in this way“.
These cases provide a flavour of what appears to be a hardening of judicial attitudes towards those who disregard the property interests of third parties. The moral is clear: landowners should first ascertain whether any rights affect their land before then
Mark Withers
working with anyone whose interests stand to be prejudiced by any redevelopment. Rushing forward headlong or sticking one‘s head in the sand in the hope that compensation will resolve any claims from third parties for infringements of their rights is, to say the least, perilous.
Details: Mark Withers 023-8048-2274
Troubling times for landlords and tenants
Landlord and tenant disputes continue to rise in the south as both parties are faced with the harsh realities of the current economic climate
Mike Caton, a senior partner at law firm Moore Blatch, believes these issues will continue to feature in the south‘s commercial property market as struggling companies look to terminate leases and landlords focus on keeping tenants in their properties.
“We always advise clients on both sides about the importance of detailed lease documents but never has this been more important,‘‘ said Caton whose team works with landlords and tenants across the region to minimise potential liabilities during the term of any lease.
“A tenant may be facing difficulties and want to downsize to smaller, and cheaper, premises but may not fully appreciate their legal obligations,‘‘ said Caton. “On the other hand we also work with landlords who will pursue all legal channels to keep a valuable tenant.‘‘
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Caton said that break clauses are one of the most common areas for dispute and a number of cases have already been heard which illustrate the lengths a tenant will go to in a bid to extricate themselves from a lease and the hard line approach of landlords in pursuing anything they believe to be in breach of a lease.
“Our experience in working with landlords and tenants in the commercial sector gives us an insight into issues affecting everything from offices to the retail sector and commercial units,‘‘ said Caton.
Examples include cases which have questioned the tenant‘s lease compliance – even when tenants believed they had fully met the terms of their lease.
In one case, a landlord claimed that its tenant had not operated its break option properly as
complied with its lease on the basis that the landlord had not paid the premium.
However, Caton said a second case in the High Court determined that a tenant had failed to operate its break option properly after failing to pay default interest which had fallen due on arrears of rent under the lease.
“These cases both illustrate the importance of legal assistance in drawing up any documents with long-term effects on a landlord or a tenant but if the worst does happen we can also advise on serving notice and the subsequent legal work.‘‘
Mike Caton
it was in arrears of rent at the expiry of the break notice citing a demand for insurance rent issued before the tenant‘s break notice as the basis for non-compliance.
In this case it was ruled that the tenant had
THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – OCTOBER 2012
Details: Mike Caton or Kate Stewart Commercial property team 023-8071-8000
www.mooreblatch.com
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