Rooftop development: Issues for property developers and investors to think about

How does planning law affect rooftop developments?

Don’t assume that a roof top development has permitted development rights, despite planning law reforms in England in 2020 granting permitted development rights for new dwellings on roofs in certain circumstances.  You need to get this checked by a planning specialist. 

Even if there are permitted development rights, there may still bey hurdles to jump where a planner’s assistance is likely to be invaluable.  Roof-top residential developments in Wales always require planning permission. 

The government’s planning law reforms to be enacted this year are intended to speed up the planning process and may lead to other relevant changes.

Can ownership of airspace impact a rooftop development?

If you’re the building owner, you should check with your lawyers that you own all the relevant airspace for your planned development. For example, if the roof has been leased to a tenant, then the airspace will also belong to the tenant, unless the lease says otherwise. Also, it is not necessarily the case that the owner’s airspace extends higher than is necessary for the ordinary use and enjoyment of the land.

How can restrictive covenants impact rooftop developments?

Do neighbours and any leaseholders benefit from any covenants restricting how the airspace (and any amenities that will serve it) can be used? If they do, can a release be negotiated or can the risk of legal action be insured against? Or perhaps an application can be made to the Upper Tribunal for release or modification of the covenants? Again, consulting your lawyers early can save costly challenges later. 

How can neighbours’ rights impact planned rooftop developments?

It may be that the terms of leases and any other grants of rights to third parties allow a development to proceed despite interference with their rights, or it may be possible to relocate those rights – but, again, this needs careful checking by your lawyers.  

Utility companies’ statutory rights should also be checked, and you should also consider whether neighbours might have developed rights other than by way of deeds – such as rights of light by long user (see below).  Do any neighbours benefit from other easements or from restrictive covenants that could be actionably interfered with by the proposed development? 

Will licences to overhang (for example, for a new balcony or to oversail a construction crane or scaffolding) be needed from the Highways Authority or neighbours?  

Do easements extend to proposed rooftop developments?

Will the rights benefiting the existing building also benefit a roof top extension? They might not if, for example, the extension will substantially increase or alter the burden on the land affected by the right – for example, a right of way over adjoining land. Such rights may benefit only the building as it is, not how it would be after the proposed development. 

How can rights to light issues impact a rooftop development?

Your neighbours might have rights to light that will be actionably interfered with by the proposed development. The courts have many times strictly upheld rights to light, even ordering the partial or complete demolition of a scheme and/or the payment of substantial damages to the affected neighbours.

You should instruct a specialist rights of light surveyor at an early stage to advise on whether neighbours may have rights of light, and your options if they do.

It may be that the scheme can be redesigned to eliminate actionable interference with light. Insurance against neighbours’ claims might be possible, as could negotiating deeds of release of rights of light from neighbours – though if insurance is proposed, the insurer’s consent to any such negotiations will be needed.

How can existing leases impact proposed rooftop developments?

These all need careful checking by your lawyers for anything that could prevent or impact the proposed scheme.

Do the leaseholders have any rights over the roof – perhaps of recreation or services?

It may be that the development will result in a breach of the quiet enjoyment covenant given by the landlord in a lease (or the one implied by law where one has not been written in). The development could also unlawfully derogate from the grant to the leaseholder(s): a landlord should not do anything that substantially takes away from a tenant the benefits conferred to them by their lease.

If you propose to grant a development lease of the airspace to a developer, that might breach any covenants by the landlord in the existing leases not to grant a lease of any other part of the building except in the same terms, in all essential respects, as the other existing leases.

Do the leases need varying in any way, perhaps in relation to service charge apportionments or insurance contributions, following completion of the roof top development?

What rights can leaseholders have that can impact rooftop developments?

Bear in mind that if there are two or more qualifying residential leaseholders in the block, they will, except in some cases, have the right of first refusal under the Landlord and Tenant Act 1987 to the grant of a development lease by the block owner to a developer. Breach of this right is a criminal offence. The block owner could instead develop the airspace itself and then let the new flats – that could come within one of the exceptions to the 1987 Act.

The current leaseholders might also be able to exercise their right to buy the freehold by collective enfranchisement. That freehold will normally include the airspace. The right to collective enfranchisement depends on a number of conditions being satisfied, which relate to the premises, the number of "qualifying” tenants and the proportion of those that join in the claim.

The qualifying leaseholders might instead want to exercise their right to take over the management of their building via a right to manage company, which could make it more difficult for the landlord to develop the roof space.

All the above need careful consideration, as does the need to keep the leaseholders on side – for example, by early consultation with them about the proposed development and how it might benefit them. Perhaps the creation of new leasehold units on the roof will mean the service charge costs will be reduced per tenant. Perhaps the proposed scheme will include enhancements to the block to the benefit of all. (It is also possible that the scheme will reduce the value of existing flats below.)

Commercial tenants might be concerned about many issues, including disruption to their business while works are underway.

Disgruntled leaseholders can, of course, object to planning applications as well as rely on their rights under the leases and the law generally.

How can party walls impact a rooftop development?

It is very possible that a roof top development will invoke the Party Wall etc Act 1996 to the benefit of the neighbours, which could include leaseholders in the block. Obtaining advice at an early stage from a specialist party wall surveyor is crucial.

Is the Building Safety Act 2022 relevant to rooftop developments?

Will the airspace development result in the building becoming a “higher risk building” (currently seven storeys or more or over 18 metres in height up to the floor of the top storey with at least two dwellings in the block (just one in Wales))? If so, then the development will need to go through the Gateway application regime with the Building Safety Regulator and then comply with the regulations imposed by the Act on the management of higher risk buildings.

What other issues need to be considered with rooftop developments?

There could be plenty more of these, including obvious ones such as getting comprehensive surveying and design advice from all appropriate professionals, for example as to the structure of the building and whether enhancement of it will be required. Such works may well need consents from tenants and others.  

If modular/off-site construction of the airspace works is proposed, this can reduce inconvenience to the existing leaseholders but needs careful thought and professional advice in a number of respects. You also need to check if  the building’s insurers have any requirements in relation to the carrying out of the development. 

In summary

Air space development is complex and requires careful, holistic planning and advice from the right experts at the right time – which is usually at a very early stage.

At Thackray Williams, we have extensive experience of and expertise in property development, easements including rights of light, restrictive covenants, Building Safety Act issues and the law relating to residential leaseholds.

Contact Yildiz Betez, Amit Bangham, Mustafa Sidki, David Gibson, Nicki Rundle, Andrew Harbourne or any member of our Real Estate team for legal advice on roof top or any other property development issues.