Freeholder turns a £4k developer offer into a £75k settlement

Our client owns the freehold of a mixed-use block in the south-east, with commercial space at ground level and residential accommodation above, let on long leases. A neighbouring industrial site was consented for redevelopment as a larger commercial scheme. The developer commissioned a rights of light assessment from its own professional adviser, which concluded that only one room in the block would suffer a meaningful loss of light. On that basis the developer set aside a small budget for the whole building, split between the freeholder and the long leaseholder of that room. Our client's share was £4k.

The developer's assessment treated the building as less than 20 years old and therefore without long-established rights of light, which limited the claim to a single room. But the windows in the block had not appeared from nowhere. The apertures existed in the earlier building, and the rights that attached to them were carried across when the building was changed. That meant the entitlement was considerably wider than the developer's report suggested. Rights of light are a private legal easement assessed using the Waldram methodology, which is a different exercise from the daylight and sunlight reports prepared for planning.

We took the claim on a fully funded basis, covering the specialist surveyor, the legal team, court costs and counsel, with legal insurance protecting our client against adverse costs. A letter of claim went first, to protect our client's position, and we only then opened discussions with the developer.

A report from a developer's professional adviser carries natural authority, and owners often take its conclusions at face value. But it is a commissioned assessment and a negotiating position, not a settled view of the law. We tested its starting assumptions, established the rights that had been carried across from the earlier windows, and put the claim on the correct footing.

We then priced the claim differently. The developer's figure was built around the owner's narrow loss. We built ours around the developer's gain, using benchmarks from decided cases in which compensation has been measured by reference to a share of the developer's profit rather than the loss alone. That is the real driver of value in a rights of light settlement, and it is what brings a developer to the table.

The developer moved from £4k to £75k, more than eighteen times its opening offer. Our client accepted in principle and the matter is proceeding to formal settlement. It took on no upfront cost and no exposure to costs at any stage.

A developer's first offer, however professionally presented, is a starting position and not a valuation. The gap between £4k and £75k came from correcting the assessment's assumptions and pricing the claim by reference to the developer's gain. If you have received an offer from a developer, or a neighbouring scheme is about to reduce your light, speak to us before you respond.