You’ve all seen the advertisements: “Amazing development rooftop development opportunity” These offer a great chance for development where there is little available land on the ground but there is a lot to consider when considering taking a lease to add floors to an existing development and the devil is in the detail.
Rights under the existing leases: You must consider whether the existing long leases in the building contain rights of access on to the roof at the time of original grant and whether your proposed redevelopment would infringe those rights. You don’t want disgruntled tenants in the building arguing that your new levels constitute a derogation of grant.
Right of first refusal – In certain circumstances a disposal by a landlord of a roof space will be deemed a relevant disposal under the right of first refusal provisions of the Landlord and Tenant Act 1987 (Check out the decision in Dartmouth Court Blackheath Ltd v Berisworth Ltd  EWHC 350). Before taking on a lease of a roof space notices may need to be served on the tenants in the building to offer them to take up the right to buy the roof space themselves. We often find that tenants can be motivated to accept this opportunity – even if they have no development aspirations themselves, they may wish to thwart development going on above their heads.
Nuisance clauses – Many leases contain provisions restricting the tenant from using premises “in a manner that would cause loss, damage, injury, nuisance or inconvenience to the Landlord, its other tenants or any other owner or occupier of neighbouring property” and freeholders will likely be obliged under the terms of the existing leases to take action where there has been a complaint by one of the existing tenants.
Substantially the same form – many residential leases that we read contain covenants obliging the landlord to grant leases in the building in substantially the same form. Can you be sure that the freeholder is able to grant the lease of the air space in the form that you may need to carry out the development?
Service charge adjustments – if the service charge proportions are set out in fixed percentages in the lease, which tends to be more of a feature in older style leases, will the grant of your lease affect the service charge proportions in the building?
Will you have the rights to construct additional floors? Have the existing residential leases reserved the right to develop the landlord’s building as the landlord thinks fit? How will you reach the upper parts? Are there rights to construct scaffolding outside the windows of the existing tenants? Read our related blog on A Tenant’s Quiet Enjoyment vs a Landlord’s Right to Develop. A comment upon Timothy Taylor Ltd v Mayfair House Corporation and Another  EWHC 1075 (CH) HERE: https://www.meaby.co.uk/quiet-enjoyment-vs-noisy-development-tenants-rights
These are just some of the few considerations.
Contact Nicky Cleightonhills on firstname.lastname@example.org for development matters.
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