Parking and development rights

On Friday, the Court of Appeal handed down judgment in Duchess of Bedford House RTM Company Ltd & Ors v Campden Hill Gate Limited.

Firstly, a right to park outside a block of flats can arise where there has been a prior, settled practice of parking by occupiers and visitors - even if not all (or even the vast majority) of them did so.

Secondly, a clause excluding the passing or creation of rights that “might” impact development – the right to park in this case - must be construed narrowly.? Any development that “might” engage the provision must be “grounded in reality”.? I assume that will import something akin to the “settled intention” test where landlords cannot oppose a commercial lease renewal if they only possibly will develop a property.?

One may think the second aspect has limited application as it relates to the interpretation of one specific clause. ?However, this is a “boiler plate” provision widely used; and it is common for both commercial and residential leases to contain like clauses to preserve the development value of neighbouring land. ?

This case is important as it may now be more difficult to exclude the accidental passing and/or creation of the right to park or other rights that might impact future development.? There will need to be greater caution when purchasing property with development in mind.? And those drafting such provisions in future leases will need to exercise greater care if they wish to protect the development value of neighbouring property.

One last point. The losers must pay around ￡650,000 in interim costs by next month.? That is unlikely to come close to the total outlay by the residents.?? While the noble denizens of the Phillimore Estate may view their respective contributions as relatively small beer, this does give a cautionary indication of the cost of litigating.

Luke Weldon is a Partner at Carbon Law Partners specialising in real estate and commercial disputes. You can contact him on [email protected] or 07816 755 372.