Injunction against development of car parking spaces

The High Court in, Kettel and others v Bloomfold Ltd [2012] EWHC 1422 (Ch) granted an injunction to a group of tenants in a block of flats preventing the landlord from developing land where the tenants’ car parking spaces were located.  The Court ruled that the car parking spaces granted to the tenants as part of their long leases were easements and the tenants were entitled to an injunction preventing the landlord from carrying on the proposed development because the landlord was not entitled to unilaterally terminate the easements.

An easement is a right to use or pass over land, and not a right to possession or joint use of the land with the party that has granted the easement.  In addition, an easement cannot be claimed if its effect would be to deprive the party that has granted the easement the benefits of owning the land.  In other words, the right will not be an easement if it prevents the owner of the land in question having any reasonable use of the land.

The Tenants had been granted long leases of flats in the landlord’s existing development, which included a right to use a specific parking space.  In the leases, the landlord had reserved the right to develop its neighbouring property, even if this affected certain rights enjoyed by the tenants.  The landlord wanted to commence a new development on land which included the car parking spaces allotted to the tenants and required the tenants to accept different parking spaces elsewhere.

The Tenants sought an injunction to prevent the development, arguing that they had been granted rights to use the car parking spaces which amounted to exclusive possession, and which in turn deprived the landlord of all reasonable use of the land on which the car parking spaces were situated.  The landlord argued in return that the tenants did not have exclusive possession of the car parking spaces, and so the rights to use the car parking spaces were easements.  Therefore, the landlord further argued, if the proposed development deprived the tenants of their right to use the car parking spaces, the tenants should be awarded damages.

The High Court granted the injunction to the tenants.  The Court held that the tenants had not been granted exclusive possession of the car parking spaces and that the rights granted merely prevented the landlord from parking a car in the car parking spaces.  It did not prevent the landlord from doing anything else with the land, such as passing over it or laying pipes or service media beneath it for the existing block of flats.  Therefore, the landlord was left with reasonable use of the land.  However, there was no right set out in the tenants’ leases for the landlord to unilaterally vary the position of the car parking spaces.  In other words, the landlord could not on its own extinguish the easements that had been granted by granting equivalent easements to the tenants on a separate piece of land.  The landlord was entitled to temporarily obstruct the car parking spaces to carry out its maintenance obligations at the existing block of flats, but it could not extinguish the easement by requiring the tenants to park their cars elsewhere.  The Court therefore granted the injunction as an appropriate means of preventing the landlord from unilaterally terminating the easements, and the landlord was prevented from carrying out its proposed development.

This case confirms that where tenants are granted specific parking spaces within their lease, do have a legal entitlement to use the parking space.  Therefore, developers in granting new leases will need to consider and include a right to alter and indeed terminate the tenants parking rights, where there is a potential for development of that land further in the future.

To find out more, please contact Caroline Vernon. 

Breaking Up Is Never Easy

Break clause can greatly assist with a tenant’s portfolio management. It is a potential opportunity for the tenant to relocate to cheaper premises or renegotiate new terms and can be a valuable provision, particularly in this volatile market.

However, it is not an entirely straightforward process and there can be various conditions attached to break clauses which can be difficult to satisfy.

Ideally, you will only want one condition, that is, a condition of service of notice to break – this is often 6 months’ notice but sometimes it can be 12.

A condition with any uncertainty such as vacant possession should be avoided at all costs – every property lawyer knows the sack of coal story (more on this in a future article!)

Notice

Most break provisions do not specify a certain form of notice but some do and the tenant must comply with the terms. If no specific form of notice is mentioned, notice must be clear regarding who it is directed to, which provision it relates to and what it is intended to do.

It must be served by the date specified in the break clause and served on the right party at the correct address. The party is usually the landlord but for the avoidance of any doubt, it is usually advisable to serve a copy of the notice on the landlord’s agents and solicitors to cover all bases.

All other terms of the break must be fully complied with (e.g. paying outstanding rent by the break date) in order to have a realistic chance of breaking. The break clause should specify whether the conditions must be satisfied at the date of service of the break notice or at the break date, or both.

If there is a condition, for example, that all rents are paid, it is important to determine how the lease defines rent. If the lease provides for default interest on late rent payments, and the tenant had sometimes paid rent late, although the landlord had never demanded this interest during the tenancy, the landlord can resist the break clause by highlighting the interest “technically” due.

Seeking advice from us early on is essential to manage the process successfully, making sure the notice is properly drafted and served and that the tenant fully understands their obligations. Where there is an obligation to deal with dilapidations, an independent surveyor should also sign off works as being compliant before the break date.

When advising tenants, we always push hard to get written confirmation from the landlord that the break has been waived.

Contact Mike for more information.