Brownfield – Historical title issues


Our team: Tim Foley


Fundamentally the challenge in unlocking opportunities and realising value of brownfield sites is managing the transition and change of purpose from the former use.  In circumstances where the brownfield use has been established for many years, possibly decades, there may well be historic title issues that present a challenge for the developer.  What issues can present problems?  What, if anything, can be done to mitigate their effect?

In this piece I will address three common title issues that are likely to be relevant to development of a brownfield site:

  • Restrictive covenants
  • Access rights
  • Rights of light

Restrictive covenants

A restrictive covenant is an agreement that restricts the use of land by one party that benefits land belonging to someone else.  Restrictive covenants are, as the name suggests, negative in nature so in terms of brownfield sites restrictive covenants may:

  1. restrict the use of the site to the former brownfield use;
  2. restrict the number of types of buildings that can be built on site; or
  3. restrict the height of buildings.

Provided that the restriction in question benefits land owned by the parties seeking to enforce the terms of the covenant then the covenant is enforceable by injunction, thus, unless there is a technical loophole in the legal architecture of the covenant, if the proposed new use conflicts with the terms of the covenant, then the covenant can amount to a significant impediment to development.

What can a developer do to eliminate or mitigate this problem?

  • Express release – most things can be addressed by agreement. If the beneficiary of the restrictive covenant is willing to negotiate it may be possible to agree an express release of the restrictive covenant for a money payment or for some other consideration.
  • Insurance – it might be possible to obtain indemnity insurance to protect against the risk of a person with the benefit of a restrictive covenant seeking to enforce it. This does not solve the problem of the restrictive covenant itself but rather addresses the consequences of a successful enforcement of the covenant.
  • Application to modify or discharge the covenant – under section 84 of the Law of Property Act 1925, the Upper Tribunal has jurisdiction to discharge or modify the restrictive covenant if it is satisfied that one of the following grounds applies:
    • the covenant is obsolete;
    • the covenant impedes some reasonable use of land;
    • by agreement;
    • whereby the Upper Tribunal is satisfied that no injury will be caused

Access issues

For those sites that have no direct access to the public highway it is necessary to consider the terms upon which access to the land is being secured by an appropriate right of way (easement) but that permits the owner of the brownfield site access across neighbouring land to the public highway.  The mere fact that an easement exists however does not in and of itself mean that there is no problem.  It is necessary to consider the ambit of the rights granted to ensure that they will be sufficient not only for the redevelopment of the brownfield site but also to facilitate the proposed new use.

Easements can be created by an express grant or alternatively by an implied grant/prescription (i.e. where an easement has arisen over a period of time arising from actual use of the right of way).  In terms of express grant, it will be necessary to carefully construe the wording of the agreement that gave rise to the easement to ensure that its terms are sufficiently generous to facilitate the development.  Bearing in mind that any agreement may well have been reached many years previously to accommodate the brownfield use of the site, it may be that the terms of the easement are problematic.  For example, how wide is the physical extent of the right of way?  Would it permit access adequately for redevelopment?  Similarly, in the case of an easement that has arisen by, say, prescriptive use in order to determine the parameters of the easement it will be necessary to consider, in historical terms the actual way in which the easement was used and the extent of the use of the right as actual use giving rise to rights also describe the ambit of the rights that arise.  This could give rise to considerable uncertainty.

Even if it is possible for the developer to satisfy itself that the terms of the easement are sufficient for its purposes that is unfortunately not the end of the story.  In circumstances where the future use of the right of way is significantly greater in amount or different in character to that originally anticipated by the terms of the easement then this might give rise to the problem of what is known as “excessive use”.  Excessive use will fall outside of the terms of the easement, even if the terms of the easement are sufficient to admit that type of use.  By way of example, an easement that clearly permits vehicular access from time to time arguably would not apply to constant use on a 24/7 basis.  Needless to say, a site that does not have sufficient access rights to permit development or subsequent use of the property post-development is a vital consideration.

Rights of light

Rights of light are a species of easement that present an issue well known to developers. The principles are as applicable to brownfield sites as they are to other sites.

By way of reminder, a right of light gives the beneficiary the rights to receive light through an aperture, usually a window, and thus may constrict the development of neighbouring land over which the light passes to reach that window.  If the right of light is infringed then this amounts to an actionable nuisance which is enforceable by injunction.  If an injunction is granted it can stop a development in its tracks, and potentially require expensive redesign late in the project.

The attitude of the Court towards attempts to stop or materially restrict developments through the assertion of rights of light by the grant of an injunction has fluctuated over the past decade.  In 2011, the Court demonstrated great willingness to grant injunction in circumstances that chilled developers, but in the past few years the pendulum has swung back in the direction of granting damages in lieu of an injunction, favouring development over private property rights, where those rights can adequately be protected by a monetary award.

Rights of light is a complex area, and it is essential to take legal advice at an early stage along with advice from a rights of light surveyor.   If this is done then the possibility of adverse rights can be addressed early by negotiation or by development design.  However it would be foolish to ignore the issue of rights of light altogether.

Conclusion

Each site has its own title issues and particular characteristics.  The redevelopment of brownfield sites are perhaps more likely than other sites to present these challenges, due to historic use of those sites for a different purpose.  However, as with many developments, awareness and identification of challenges at an early stage give the developer the best chance to address them before they present an existential threat to the project.

View by author:


Would you like to hear more?