Right to Light Insurance - Don't Let a Shadow Fall on Your Development

“Oh it’s nice and light in here”… The quintessential phrase uttered by nearly every property buyer. Whether you are purchasing a residential home or a commercial office suite, ‘light’ is an important factor that can massively influence a property sale. However with the available land for future developments shrinking ever further, what happens when that ‘light’ is suddenly in the shadow of a new development?

We explore the ‘Right to Light’ law that helps protect a property owner’s right to maintain the level of natural daylight they receive, and what to do if you are a property developer who has been affected by the ‘Right to Light’ law being imposed.


What is ‘Right to Light’?

The term ‘A Right to Light’ applies where the owner of a building with windows currently benefits from the receipt of daylight, and wishes to maintain an adequate level of illumination from that light. In some circumstances, a building’s Right to Light will already be documented but it is otherwise generally assumed that a building constructed more than 20 years ago will benefit from a Right to Light. If you are a property developer and a neighbouring property owner has a Right to Light, they could potentially prevent any development you undertake that will reduce the level of light they receive by a certain amount.

There are two remedies available to claimants in the event of a loss of light. Firstly, the claimant may seek for the development to be ‘cut back’ in height or size which can result in a significant impact on the development timescale and profits. Secondly, if a claimant does not seek for a development to be ‘cut back’ then compensation payments for the loss of light may be negotiated. The Rights to Light are independent of the planning approval and a claimant may enforce a claim against a developer once planning permission has been approved.


What to do if your property development has been affected

Right of Light Insurance provides property owners with protection against financial losses arising from the loss of light in a neighbouring property. This insurance forms part of the legal indemnity product group and is only offered by specialist providers such as Mulberry Insurance Services. Losses from a claim will include legal and compensation costs, development cut back and additional costs of restructuring, delay costs, and diminution in value. As such a successful claim can be extensive, time consuming and extremely costly. The insurer of a Right to Light policy will require a survey which identifies actionable claims and the release costs for these claims will be at the owner’s/developer’s cost.

The insurance cover provided by a Right of Light policy allows developers to proceed with development in the knowledge that any subsequent claim made against them can be dealt with by the insurance. The policy should therefore be considered by property developers and lenders to mitigate the financial losses from Right of Light claims. Right of Light cover is provided in perpetuity and for the benefit of successive owners and mortgagees of the property concerned.