Thursday 19th September
Changes to Right to Light Insurance
Right to light is an important planning consideration for developers because it exposes them to the risk of legal action and costly claims. The latest (third edition) RICS Rights of Light Professional Standards took effect on 1 June 2024, providing greater clarity for developers when planning for this issue. Kerry London looks at the changes to further regulate and improve standards in this space and summarises the benefits of insurance protection in this area.
Right to light can be a contentious issue for new developments that overshadow neighbouring properties. New developments may impact the light of those around them, running the risk of expensive claims from adjacent properties. The new RICS standards gives developers a pre-action protocol and dispute resolution process, providing a more transparent process for developers and affected properties.
What is Right to Light?
A right to light is an easement, usually acquired by long use. A premises enjoying uninterrupted light for more than 20 years acquires a right to light, sometimes called the ‘right to light 20-year rule’, but that can be challenged if, before the expiry of 20 years, the light is continuously obstructed for one year.
Right to Light Insurance
Right to Light Insurance protects developers, landowners, and their funders when a neighbour claims loss of light caused by a development. Right to light matters can significantly impact development proposals and timeframes. A right to light claim can lead to injunctions that delay or even prevent a development, compensation to adjoining landowners, or, on rare occasions, demolition.
Compensation settlements and remedial and legal costs can be significant, so taking advice from an experienced construction broker to select the correct insurance policy can provide developers with peace of mind that they’re covered.
What’s covered in Kerry London’s Right to Light Insurance?
- Legal costs involved in addressing claims
- Compensation costs to the injured party
- Identifiable loss from adjoining owners as identified by the right to light surveyor
- Cost of any financial settlements, including damages awards
- Abortive costs incurred from a third-party claim
- Loss in land value if a project is permanently paused or is curtailed by a court
Each policy is tailored to the individual development and is a one-off purchase. Regardless of whether parties intend to proactively manage this issue in advance or not, Right to Light Insurance offers vital financial protection against these risks.
The impact of the new RICS changes
The new professional standards aim to reduce the incidence and impact of right to light disputes by introducing mandatory requirements for RICS members to follow alongside “best practice” recommendations.
The 3rd edition of the Rights of Light professional standard builds upon the established framework of the 2nd edition. Its primary objectives are to:
- Provide clients with accurate and easily understandable information.
- Ensure that facts are presented clearly in case of disputes, aiding all parties and their legal advisors.
- Safeguard the interests of owners, investors, insurance providers, and other stakeholders who rely on a chartered surveyor’s report or evaluation of rights to light. This includes assessing development viability or evaluating the potential negative impacts of proposed developments by others.
Right to Light Insurance policies are increasingly becoming a requirement for lenders and incoming purchasers. In addition to the other benefits of a Right to Light policy, it can save time in the latter part of the transaction process as potential lenders and purchasers have comfort that cover is in place for this risk.
If you would like to discuss Right to Light Insurance for your next development, call our construction insurance experts on 020 8225 1165 or email sales@kerrylondon.co.uk
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Kerry London is authorised and regulated by the Financial Conduct Authority. The company is a leading UK independent and Lloyd’s accredited broker, which means that we work with a wide range of niche and major insurers.
This note is not intended to give legal or financial advice, and, accordingly, it should not be relied upon for such or regarded as a comprehensive statement of the law and/or market practice in this area. In preparing this note, we have relied on information sourced from third parties, and we make no claims as to the completeness or accuracy of the information contained herein. You should not act upon information in this bulletin nor determine not to act without first seeking specific legal and/or specialist advice. We and our officers, employees or agents shall not be responsible for any loss whatsoever arising from the recipient’s reliance upon any information we provide herein and exclude liability for the content to the fullest extent permitted by law.
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