Trowers' property litigation weekly update
This week’s round up reports on access to neighbouring land, as considered in a recent case, and an Upper Tribunal decision on failure to comply with HMO licencing obligations. Followed swiftly by Insight from our colleagues around the firm, positive news and the usual quiz.
Prime London Holdings 11 Ltd v Thurloe Lodge Ltd
This recent case concerns Amberwood House in South Kensington, a former home of Dame Margot Fonteyn. You may have read about the property in the press, or seen it featured on either Channel 4's Britain’s Most Expensive Houses or Extraordinary Extensions with Tinie Tempah (although you may not admit to it!). The case is the first High Court decision as to the interpretation and effect of the Access to Neighbouring Land Act 1992 and offers useful guidance in cases where access is contentious.
The Claimant owns Amberwood House and the Defendant owns neighbouring Thurloe Lodge. Both are undergoing very substantial redevelopment, although the redevelopment of Amberwood House is at a more advanced stage. The Claimant required access to the Defendant's land to re-render and paint the flank wall of Amberwood House. The parties having fallen out in 2019, access could not be agreed.
The 1992 Act enables the Court to grant an “access order” where one landowner wishes to enter land belonging to another. The order can only be made if it is “reasonably necessary” for the preservation of the whole or part of the applicant's land and the works are impossible, or substantially more difficult, without access. The Court can impose terms (such as restricting access to certain dates and times), award compensation (which could include delays to the adjoining owner's works, additional project management costs, loss of privacy or damage to property by way of example) and, in the case of non-residential land as per provisions in the legislation, require that consideration is also paid (being a fair and reasonable sum for the privilege of entering the adjoining owner's land). The court will refuse to grant an access order if it is satisfied that the works would interfere with the adjoining owner's rights to enjoy its land or would cause it hardship
The court found that it had to consider five questions in order:
- Are the works reasonably necessary for the preservation of the whole or any part of the claimant's land?
- Would it be impossible, or substantially more difficult, to carry out the works without entry to the other land?
The answer to both questions must be yes, otherwise the Court has no jurisdiction.
- If the order is granted, would the adjoining owner whose land is accessed or any other person suffer interference with, or disturbance of, his use or enjoyment of the servient land?
- If the order is granted, would the adjoining owner or any other person occupying the land to be accessed suffer hardship?
If the answer to both those questions is no, then the Court should grant an order, although the judge retains a discretion as to the terms of the order. If the answer to either question is yes, then the court needs to consider:
- Would the interference, disturbance or hardship occasioned by reason of the entry onto the land be to such a degree that it would be unreasonable to make the order?
In this case the order was granted with conditions. The works were properly considered works of preservation, the location and character of the properties being considered relevant. It was common ground that the works could not be done without access.
When considering the effect of an access order on the adjoining owner "and any other person", this could include an occupier of the adjoining land, such as the Defendant's contractor. However, the Court did not accept that there would be any substantial delay to the Defendants’ own building works. Any prejudice that the Defendant would suffer was not such as to make it unreasonable for the Court to grant the order. On the issue of "hardship", this connoted more than mere inconvenience and could include financial hardship. However, the Act provided for payment of compensation and potentially consideration. Where the adjoining owner was compensated under the terms of the order, it cannot be said to have caused financial hardship.
There were certain matters here which would require financial compensation (such as the costs incurred by the Defendant in having a suitable professional oversee the works) which, if they could not be agreed, would need to be determined once the works had been completed. No consideration was found to be payable, because the case concerned access facilitating works to residential land. It did not matter that the property had not been occupied for a substantial period and was undergoing substantial redevelopment; once a property was characterised as residential land it retained that character until the property was used for something else (such as commercial or agricultural use) and does not attract any additional consideration which may otherwise be awarded in the case of works to non-residential land.
Aytan v Moore and others  UKUT 27 (LC)
The case of Aytan v Moore and others involved two appeals to the Upper Tribunal (Lands Chamber) in relation to rent repayment orders from the First Tier Tribunal (FTT). Both cases raised the issue of the amount of rent to be repaid when such an order was made. One of the appeals also concerned the defence of reasonable excuse to the offence of managing or being in control of a House in Multiple Occupation (HMO) without a requisite licence.
The landlord of an HMO must obtain a licence from the local authority. Furthermore, a person in control of managing an unlicenced property commits an offence if he does not do so, unless they can rely on a defence of reasonable excuse.
In each of the appeals, the tenants had sought Rent Repayment Orders from their landlords who let their properties without having obtained a licence. The landlords did not dispute that the properties should have had a licence but pleaded the defence of reasonable excuse. They argued they had been unaware that the property needed to be licenced and had relied on their managing agents to advise them of this.
However, the Upper Tribunal was not impressed with their arguments. They held that a landlord who sought to rely on the failure of the managing agent as giving rise to a reasonable excuse for failing to obtain a licence would need to demonstrate that there was a contractual obligation on them to do so. The landlords did not provide any evidence of such a contractual arrangement with the managing agents and there was nothing to say that the agents had taken responsibility for updating the landlords in relation to legal requirements placed upon them. The appeal of reasonable excuse therefore failed.
In dealing with the appeal in relation to the amount of the rent repayment order, the Upper Tribunal, having regards to the conduct of the landlord and the tenant, the financial circumstances of the landlord and whether the landlord had at any time been convicted of another relevant offence, did substitute the original order made. Whilst a serious view of the conduct was taken, on the other hand, it was noted that the condition of the property was good. It held that the original amount of rent ordered to be repaid was disproportionate. However the reduction made was not that significant: rather than the landlords being ordered to repay the whole of the rent for the 12 month period, being the sum of £31,200, the Upper Tribunal substituted this with an order to repay 85% of that sum being £26,520.
In view of the Upper Tribunal's decision, we may see amendments being made to express terms placing clear obligations on managing agents to be responsible for licencing obligations.
Insight from around the firm:
- Is Covid over in the workplace?
- Special purpose acquisition companies
- Conversation with Martyn Evans, creative director of U+I
Positive news stories:
- In a positive step towards ending plastics pollution, France has placed a ban on plastic packaging for most fruit and vegetables which could prevent use of as much as a billion items of single use plastic each year. Fruit and veg unwrapped: France’s plastic packaging ban begins
- Having spent 17 years honing his skills as a furniture maker and two years building his first prototype, Andy Dix has created a bike made from British-grown ash with a view to minimising emissions figures and the environmental impact of aluminium. The bicycles that grow on trees
- A revolutionary gene-editing treatment is being trialled in the US targeting sickle cell. Sickle cell: ‘The revolutionary gene-editing treatment that gave me new life’ - BBC News